Farfetch: Brick and Mortar Luxury Fashion in the Age of Technology
Founded in June 2007 by fashion veteran José Neves, Farfetch is a luxury online platform that connects high-end fashion seeking shoppers to hundreds of luxury (brick and mortar) fashion boutiques across the globe.
This European unicorn has raised $300+ million to date, with over 400 boutiques worldwide, showcasing 1500+ designers, and over 10 million site visits per month. Total sales this year are expected to reach $800 So how does Farfetch maintain its edge in this world of fierce competition?
Farfetch’s Secret Sauce:
Early to the omni-channel: Neves early on acknowledged that shoppers do not necessarily live in an either or world. There was a strong case to be made for both physical and online shopping in the luxury market. He dreamed up Farfetch to do just that, enable brick and mortar stores to bring their high end fashion to consumers worldwide through the internet.
Software: the technology behind the platform which took a year to build keeps track of retail inventory worldwide. Farfetch has seamlessly intergrated itself with its partner boutiques. “Let’s say I need to know that a certain pair of shoes exists in five shops around the world and is available in certain specific sizes in real time,” says Neves. “We’ve built a solution, and that’s really the secret sauce behind Farfetch.”
Curated curation: many question whether Farfetch will continue to withstand competition with giants like net-a-porter and threat of the likes of Amazon entering into luxury fashion. Farfetch has developed a double layer of immunity by not only sourcing highly curated boutiques, but also hiring an internal team to curate the curators. Farfetch customers only experience a 4% overlap with Net-a-porter, this unique product offering creates a major competitive advantage for the platform.
Streamlining a consistent user experience: when a user goes on to Farfetch it’s easy to forget that you are shopping from over 400 boutiques across the globe. The photography and styling is seamless and consistent. Farfetch boutiques ship items they wish to list to one of 4 photography studios around the world for photography and styling. On site Farfetch employees shoot the product and take down measurements and fit recommendations such as (fits true to size, or take next size up) in a high-speed high-processing fashion. Each model wears the look for no longer than 4 minutes. If lucky, the boutique might find that the item is already listed and photographed for another boutique so sending the product would not be necessary. This makes the experience seamless for shoppers and eliminates product misrepresentation by boutiques.
A luxury platform fitting to its boutiques and clientele: the company has a strong focus on its aesthetic and places a strong emphasis on creating a platform experience that is fitting for the $5,000 Saint Laurent leather jacket shopper. Maintaining the luxury feel keeps both customer and boutiques coming to the platform. “The luxury industry requires a luxurious experience,” says Neve.
New listings every week: approximately 1,000 new listings are posted every week which keeps product inventory always fresh and ensures new discoveries for regular shoppers. “We’re basically a journey around the most beautiful stores in 35 countries.”
The Farfetch platform success is no fluke. The company is both customer and vendor focus with a deep respect for the luxury fashion industry. High awareness of the high-end shoppers’ needs has created an attractive value proposition for vendors. With the challenges facing brick and mortar stores today Farfetch has creating an opportunity for boutique owners and curators to do what they do best while creating a more sustainable stream of income from e-commerce (without the hassle).
While Farfetch has created a unique competitive advantage in tapping into a highly curated market and differentiating itself with a unique product offering, it still charges boutiques a hefty commission. The Farfetch experience is difficult to replicate due to its distinctive operational infrastructure (both tech and physical operations), so while the risk of copycats may be low Farfetch is now working on cementing its brand and name recognition to create another layer of immunity going forward.