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FARFETCH HAS INCREASINGLY LONG REACH


The recent IPO of UK-headquartered online luxury fashion retail platform Farfetch marks a digital retailing milestone and also


gives an exciting view forward of how digital and physical retailing can work hand-in-hand. Matthew Thompson looks at their offer.


Fashionistas across the globe are already well familiar with the Farfetch experience. Its front-end comprises a slick website (localised in 12 languages) and on-the-move app, offering express shipping to over 190 countries. For those less well-acquainted with the store front: think Amazon-style operation, focused exclusively on luxury fashion.


The crucial difference with the Amazon model is that although Farfetch sells major brands directly (it currently offers 3,200 in total), a significant part of the operation is based on a network of nearly 1,000 traditional (ie bricks and mortar) independent boutiques. The latter provide the stock and Farfetch provides the technology that connects them to a fashion-hungry global online audience.


This means that a chic customer in upmarket Sydney suburb Vaucluse can shop in a Chelsea boutique without even having to step out onto their veranda. This win-win formula of both connecting brands and physical retailers with an audience they might not easily reach by themselves probably explains why Farfetch achieved a much better- than-expected result when it launched on the New York Stock Exchange in September 2018. The IPO raised $885m, stamping a valuation of $6.2bn on the business.


This success didn’t happen overnight. Farfetch was originally founded over a decade ago by Portuguese entrepreneur José Neves (see timeline). As a global business it could have based its headquarters anywhere, but chose


London to be geographically close to the world’s 20 largest luxury fashion brands by revenue, all but one of which are headquartered in Europe.


Farfetch’s gradual evolution is simultaneously reassuring and exciting. Reassuring, because it suggests that this model is here to stay and is not a dotcom bubble, one- minute-wonder. And exciting, because it provides a compelling operation that challenges the notion that online retail must be to the detriment of its physical counterparts.


To underline how seriously Farfetch believes in bricks and mortar retailing, in 2015 it acquired long-standing UK luxury fashion boutique Browns which had been a fashion fixture in South Molton Street. This move enabled the tech company to gain first-hand experience of the luxury fashion ecosystem, something that could only enhance its credibility in the marketplace.


Ownership of Browns turned out to be a precursor for the launch of its ‘Store of the Future’ concept, which it revealed in a new and separate Browns outlet – Browns East – in Shoreditch, E2, last year. This 4,000 sq ft former print factory is now the testing ground for innovations developed as part of its augmented retail strategy.


Recognising that for many customers the in-store experience is an integral part of the overall shopping transaction, Browns East is kitted out with ‘smart mirrors’ (computer enhanced screens) offering bespoke clothing choices based on real-time product availability, plus recommendations based on previous purchasing history – all operated by sales associates via an app. There’s also


Browse | Q3 2018


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