So, let’s take a look at when it makes sense to do business with luxury fashion’s most illustrious marketplace…
The first thing to know about FarFetch is that it is a tech, not a fashion, business. Unlike its retailer counterparts – such as Net-a-Porter, MatchesFashion.com, etc… – FarFetch does not buy or hold any stock. Instead, it operates a marketplace approach to eCommerce, connecting a curated selection of over 3,000+ luxury fashion brands with an audience of global customers.
For the customer, the benefits are clear – FarFetch offers access to an extensive variety of products and brands (in terms of both depth and width of range), delivered through a strong, secure user-experience, with a high service level in one, online destination.
However, if you are a luxury brand or retailer, you may be pondering whether to join the FarFetch network or build your own direct-to-consumer eCommerce proposition. The answer is often a complex one…
Here’s the facts:
FarFetch offers luxury brands and retailers:
Luxury brands and retailers may find the following limitations with FarFetch:
FarFetch is an excellent platform for young or growing brands, enabling them to connect with a large, engaged audience of luxury customers without the need for significant CAPEX investment or dedicated in-house eCommerce resources.
The suitability of FarFetch as a platform for your brand has a strong correlation to the size, scale and maturity of your business. Once your brand hits a critical level of maturity, a business case for direct-to-consumer eCommerce should be investigated. Such an approach, if executed correctly, allows brands to create and nurture a direct relationship with their customers, access rich consumer data, increase product margin and create space for a branded experience.
However, taking such a critically strategic decision, requires diving into deeper details…
Before making a decision, your brand should think very carefully and perform a serious opportunity/cost analysis. This should be based on your current market presence, team maturity and strength, and, most importantly, your growth ambitions.
Setting up direct-to-consumer eCommerce, brand building and CRM operations gets easier and more cost-effective by the day. So, if you are on a trajectory to scale fast, starting an ambitious growth journey without owning the eCommerce experience (with the limitations listed above) may put your business on the back-foot – deep-diving in the definition of a solid strategy and a sustainable roadmap is your next logical step.