Why Olivia Palermo and Her 6 Million Followers Could Reshape Fashion Retail

Shannon Adducci

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Olivia Palermo loves watching “The Real Housewives.” She’s giggling along with her team — hair, makeup, stylist, publicist — as they recall a particularly campy performance by Countess Luann de Lesseps.

It’s a funny thing to hear the usually poised model and entrepreneur refer to a TV franchise known for its crassness — especially while she’s clad in haute couture. A velvet Elie Saab gown is wrapped around her, a Piaget diamond necklace in her hair and a pair of glittery Miu Miu flats double as the slippers she’ll wear before she straps on Giuseppe Zanotti high-heeled sandals festooned with giant crystal flowers. Both pairs of shoes lie in front of her on the carpeted floor of Café Carlyle, the famous cabaret room at the Carlyle Hotel on Manhattan’s Upper East Side, where FN’s cover shoot is taking place.

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It’s also funny because 10 years ago, she was a reality star, on MTV’s “The City.” Palermo could have easily continued on that path of stardom.

Instead, she chose fashion. And not reality-TV-fashion, but real, inside-baseball fashion. She’s been diligently working with a network of brands, designers and executives on a variety of collaborations and partnerships, all of which have helped her transition into a bona-fide star. Now, the 33-year-old is expanding her reach with the relaunch of her website and the debut of an accessories-focused e-commerce platform that could help lead online fashion retail to a new future.

“That’s why we started this,” explained Palermo a week after her shoot, downtown at the Crosby Street Hotel, over Arnold Palmers that she ordered with the gentility of another era. “You could see a shift in the market and this was the perfect time to re-strategize and reposition. It’s really about the next chapter, taking what I’ve been doing in a service business and making it product driven.”

About two years ago, Palermo and her brother, Grant, formed the Olivia Palermo Group in an effort to formalize her business goals. Grant, 31, had been working in finance and real estate, sectors that likely helped him to recognize the importance of grabbing a piece of the retail landscape in transition.

“I was cognizant of the name and business that Olivia had built for herself and saw potential to develop something larger,” said Grant. “Olivia was savvy to see opportunities where they existed and take advantage of others that presented themselves,” he added, referring to past and present capsule collections, partnerships and collaborations with the likes of Banana Republic, Nordstrom, Aquazzura, Piaget and Karl Lagerfeld. “But she could not directly offer to her audience the brands and products she was endorsing. We’ve set out to close that loop by offering the community a way to truly ‘buy’ into her lifestyle.”

To do that, the siblings pressed pause on the Olivia Palermo website (first launched in 2011), undertaking a year-long renovation in order to give the site a more editorial lens. Then they tapped some 25 accessories brands for the e-commerce launch, scouting potential partners through the intricate web of relationships that Palermo has built.

In recent years, she and her husband, German model Johannes Huebl, have established themselves not just as front row regulars but mainstays in the industry’s inner world, attending the grueling cycle of fashion weeks, press events and previews with a dedication, persistence and zeal that has been lacking as of late in an environment of quota-weary buyers and career-wary editors.

Insiders appreciate that, but her allure ultimately comes down to the self-as-brand, and her image is so tightly honed that it’s instantly recognizable: the uptown girl with a modern view, an eye for impeccable taste and a laser-focused intent on sharing it with an audience. Palermo’s influence touches on a more vintage definition of the term. At the same time, her vision, acting simultaneously as promoter, retailer, editor, model and ultimately, arbiter of the entire system, is entirely new.

Palermo has already played muse to a number of designers, a tradition that harkens back to the days of legendary women like Babe Paley, Nan Kempner or Gloria Vanderbilt, all socialites with strong fashion connections. Still, in a very-2019 twist, the Upper East Side-bred Palermo now lives in Brooklyn. “She represents to me the elegance of the American woman,” said Nicolò Beretta, designer of Giannico and creative director of L’Autre Chose, who counts her as a muse. “She is timeless. I could see her walking around New York with [the late] Lee Radziwill.” (Both Radziwill and Palermo were and are longtime muses to Giambattista Valli.)

Her mystique is something that designers and brands can further tap into with the new e-commerce venture. Confirmed footwear partners include Casadei, Alexandre Birman, Fratelli Rossetti, Santoni, Stubbs & Wootton, Les Petits Joueurs, Giannico, Alameda Turquesa and Paula Cademartori, plus a tentative deal with Nicholas Kirkwood for fall ’20. “The editing is very much to my style. That’s important from the feedback from our community. That’s really what they’re looking for,” said Palermo.

“People trust her in the same way they trust Vogue and Elle magazines. She is an authority,” said Carolina Santos, co-founder of Portuguese footwear label Alameda Turquesa. Santos and her co-founder and mother, Ana (who makes the shoes by hand), have eschewed the traditional route of trade shows or fashion weeks, preferring instead to sell directly on their site through social media marketing, which eventually landed them a seasonal trunk show account with Moda Operandi as its only U.S. outlet, and a digital one at that.

For the 30-year-old Santos, the partnership with Palermo is in line with her digital-forward model, one that also included a similar deal with Chiara Ferragni when she launched e-commerce a few years ago. “The market is changing. People like to discover brands. Moda [Operandi] has its niche. Olivia will also bring that to the brands working with her. She has a specific audience,” said Santos.

Palermo’s brand mix is also decidedly niche, heavy on emerging designers and labels that have not previously entered the U.S. It’s a list that is likely to make traditional retailers wring their hands. After all, there are no big-name luxury brands to count on as the sure sales bets. There are also a surprising number of hat and headwear labels (even more niche).

E-commerce competition is as fierce as it’s ever been. Multi-brand e-tailers like Farfetch and Revolve have had their every move scrutinized on the stock market since their respective IPOs, and individual brands are tightening up their own digital direct-to-consumer efforts. Many are also scrambling to make sense of Barneys New York’s bankruptcy filing in early August.

In addition, Net-a-Porter has already staked a claim for showcasing up- and-coming designers, making it difficult for new ventures to stand out. For example, when MyTheresa veterans Susanne and Christoph Botschen launched their emerging-talent-focused MarthaLuisa.com in 2018, the site was only live for eight months (it was also stocked with powerhouse brands like Gucci and Saint Laurent; something Palermo does not have).

“There is a lot of insecurity in the retail world, especially on the multi-brand side. It’s great to see people taking the chance and questioning what’s going to be the future. We all need to think about what people really want,” said Beretta. “Today, if you want the big label, you go to their flagship store or the website. The opportunity for most retailers is with young and specialty designers. I really hope Olivia is one of the answers.”

Palermo’s price points will run the gamut from $45 to $1,980, but it’s clear she is not interested in a “look-for-less” philosophy. “If something is great, then it’s a great price,” she said. “We really home in on craftsmanship, on heritage, on brand values.”

The shift away from fast fashion to slow and sustainable could work in her favor — and is also good news for heritage brands.

Luca Rossetti, managing director at Fratelli Rossetti, is betting on Palermo’s partnership to improve the footwear label’s ethos and visibility in the U.S. “Fratelli Rossetti was one of the first [modern] brands that made masculine shoes for women. [Olivia] can understand our type of product,” he said. “She is sophisticated and represents the right audience.” Rossetti noted that its own e-commerce, launched in 2013, has increased by 30% in the past year.

Perhaps Palermo’s biggest selling point is her loyal, global consumer following. The audience includes 6.1 million followers on Instagram — which is about 2 million more than Elle magazine (where she worked in the accessories department during her time on “The City.”). Nearly half of her audience is smack dab in the 25-to-34-year-old demographic (and 80% are women). In essence, they are the millennials who watched her on TV in 2008 and have stuck around for her fashion advice ever since.

Given those numbers, plus the partner- ships, the TV resume and the household name, it would be easy — and technically accurate — to call Palermo an influencer, that catchall, now-ubiquitous term that many insiders have started to dread.

“You know how I feel about that word,” she said pointedly to Derek Conrad, her VP of communications and partnerships, who joined her for the Crosby Street interview (and is one of eight full-time employees on her staff).

“Ten years ago, it was socialite,” he offered.

“And then blogger,” added Palermo.

“And then DJ!” said Conrad.

“This is kind of a trendy label for now,” said Palermo, when pressed on how she defines herself in 2019, in the era of the influencer. “Of course within the line of work that we are in there is influence. But that’s also part of the brand. We can, with our stories, inspire or be touched by the designers. That sort of influence is amazing. So I think we can take our own version to it.”

For now, the e-commerce platform will focus on accessories, but Palermo also hinted at expansion into other categories like men’s, along with a possible foray into brick-and-mortar.

It’s for that reason that Palermo and her brother are intent on keeping the entire operation in-house. Aside from third-party web development by Shopify+ and shipping by a luxury firm, the Olivia Palermo Group is responsible for every- thing from editorial content and fashion shoots to packaging design and e-commerce fulfillment. “We are building a corporation, so we really have to start from the ground up,” she said.

That attention to detail is sure to help Palermo compete against the growing retail efforts of other influencers. As fashion month ramps up, all eyes are certain to be back on Palermo — this time, both on the front row and backstage.

See more images of Olivia Palermo from our photo shoot.

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