Post-IPO, Farfetch looks to move from distribution network to transformation partner
Farfetch’s founder has plans to overhaul the fashion industry from the inside out, starting with Chanel and widening the scope of his ambitions to other brand partners.
Farfetch floated last month
The company, which recently floated on the New York Stock Market, is best known as an e-commerce platform that ships designer items both directly from brands and from boutiques around the world.
But back in February the business made headlines when it signed a multi-year global innovation partnership with Chanel. The deal will see it share its digital and logistical fashion know-how with a dedicated client, with a remit to develop a range of digital initiatives to improve customer experience at the French house both off and online.
In the same month, Farfetch rolled out its ‘Store of the Future’ data-led operating system at menswear designer Thom Browne’s London shop, a platform that was also integrated into the Browns East London boutique, which Farfetch owns.
Now, founder José Neves, has his sights on other brands that are ripe for digital reinvigoration – as well as businesses higher up the production chain.
“Physical retail as we know it today is stuck in the 90s,” he said, speaking on stage at Fast Company’s Innovation Festival. “You walk in, you ask for your size, you wait 10 minutes for [a sales associate] to check if it's there in the back... It's still a very clunky experience and it hasn't been touched by digital in the way that everything else around us has.
“It’s [digital] services and personalisation that are going to be transform physical retail in the luxury industry, and that is what we are doing – with Chanel first and then Browns, and then hopefully [we’ll] extend and offer it to the entire industry.”
A representative from the company said they could not reveal any details on forthcoming brand partnerships. However, Neves said the company vision is to become “a platform that enables an entire industry to adapt to how people are going to shop in the next five, 10 years”.
The brand has already been bolstering its position as a transformation partner in Apac, where it acquired Chinese digital marketing agency CuriosityChina in order to create WeChat stores and market its partners' products directly to Chinese consumers.
Outside of marketing, Farfetch looking to solve an array of the industry’s more existential problems, such as authentication, counterfeiting and sustainability.
“We’ve launched a made-to-order and customisation services with Fendi and other brands,” he said, explaining that overproduction is still one of the biggest environmental problems in fashion. Neves also believes data could be used to inform the design process – although he noted this should still be primarily led by a “gut feeling”.
To help solve these weighty issues, Farfetch has implemented an accelerator programme dubbed Dream Assembly. Launching last month, the current cohort comprises the likes of Ftsy, a footwear app that analyses the shape and size of shoppers’ feet for the perfect fit, and Wishi, which connects consumers to online personal stylists.
The companies have been given access to mentoring, networking opportunities and access to early-stage funding.
“We're supporting these startups not just with money but with our expertise, exposure to our brands, exposure to our boutiques and consumers to test their models,” said Neves.
When Farfetch IPO-d on 21 September its stock closed on $28.45 per share (it opened at $20), a surprise to some analysts who looked upon other e-commerce platforms more favourably.
These forecasters may likely have overlooked the company’s ambitions outside of pure-play e-commerce, which were spelled out in the IPO filing: “By providing a digital storefront, inventory management, a global logistics solution and other tools to help manage [luxury sellers’] businesses, we are embedding ourselves as both a commerce enabler and an innovation partner for the future."
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