Farfetch, an online retailer, is keen to keep individuality
By C.S.-W.
THE GHOST of Miss Boo, a slow loading but sharply dressed online avatar who greeted guests to Boo.com, a major dotcom casualty of the early 2000s, still haunts the online fashion sector. Boo.com failed for many reasons: it managed to squander £125m ($188m at 2000 value) in six months on a bloated staff of 100; it launched before its website was complete; and it arrived before internet speeds made image-heavy browsing anything other than infuriating.
Miss Boo was a slummy mummy in dowdy rags compared to the catwalk fashionista that is Farfetch, an online marketplace for independent fashion boutiques. With offices in Lisbon and London, Farfetch acts as an online Lear jet for those looking for luxury clothing. Even the mega-rich can be affected by a recession; saving on chartered flights from Hong Kong (one of Farfetch’s best-performing markets) to Capri to buy that little black dress for the latest season can keep a girl in couture.
With an average transaction value of £412 ($650), and a higher-than-average percentage of users earning more than $100,000 a year, Farfetch is far away from the low-cost high street retailers that dominate the market. The website has a different ethos to big fashion chains, believes José Neves, Farfetch’s founder. The firms’ scouts visit major fashion houses and open up a dialogue with management to explain the benefits of using the site, one of which is avoiding the fate of Miss Boo. Setting up an online retail website costs a lot of money—an investment decision that “doesn’t make sense for most independent fashion retailers,” says Mr Neves.
The site boasts 3.8m visits a month, and plans this year to spend more than $5m shipping items to its 130,000 active customers. Farfetch takes a percentage fee of each sale for its part in the process.
Other sites offer a similar service to boutiques and buyers. Net-a-Porter, a 12-year old fashion retailer owned by Swiss luxury goods holding Richemont, is Farfetch’s nearest competitor—albeit not a direct one, posits Mr Neves. Only 5% of products available on one site are sold on the other.
Currently Net-a-Porter is the more established name; it has 6m monthly visitors, and is expanding into the publishing sector with its own magazine to complement a selection of brand-enhancing apps—but four-year old Farfetch is growing. Online retail is expanding in all areas, including the luxury fashion sector, with plenty of room to grow further. Richemont announced in its 2012 interim results that online and boutique sales (including those of Net-a-Porter) accounted for more than half the total group’s sales.
Farfetch emphasises its bricks and mortar boutique roots. Each item of clothing is sourced from one of 250 individual retailers, whose buyers liaise with designers to best answer customers’ needs. “We don’t meddle with that relationship,” Mr Neves explains. It will, however, start to network its boutiques, allowing a Parisian to try on a garment ordered via the site from a boutique in Latvia in their local independent store.
This hands-off approach helps independent retailers keep their identity, while boosting their position in the market. In so many retail sectors the internet has been the death knell for small shops, undercutting prices and compounding difficulties caused by recession. The curious contrast is that as big brands dominate the online shopping sector, those keen to keep individuality in retail are fighting back, with Farfetch and Net-a-Porter, dressed in their glad rags, leading the charge.
