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Jose Neves, founder and chief executive officer of Farfetch UK Ltd. Photographer: Chris Ratcliffe/Bloomberg
In luxury circles Farfetch, the digital fashion marketplace founded by José Neves that offers selections from nearly 900 fashion boutiques worldwide, is often compared to Yoox Net-a-Porter, the multi-brand online platform recently acquired by Richemont in a reported €2.7 billion deal. Now Farfetch is said to be headed toward a US IPO pegging its $6b valuation on that of Yoox Net-a-Porter.
While both Farfetch and Yoox Net-A-Porter offer multi-branded luxe fashion selections, NAP’s captivity to Richemont’s heritage brands is evident. By contrast, Farfetch operates independently, forging partnerships primarily with independent retailers that pick from the luxury fashion industry’s best and brightest to post selections on the Farfetch marketplace. Farfetch is not conscripted to one luxury conglomerate and its own stable of brands.
Farfetch’s strategy is to form mutually-rewarding partnerships with retailers and brands as a technology leader, both on its global marketplace and through its White Label service supporting Manolo Blahnik, Christopher Kane, DKNY and Thom Browne, among other brands.
The difference with Net-A-Porter is marked. “It is important to think of Farfetch as more of a technology company than as a retailer,” says Katie Smith of EDITED, the retail data analytics firm. “They don’t hold any stock, but are an aggregator. It’s a great point of difference in the market which enables them to have a huge assortment without the risks involved.”
Farfetch supports brick-and-morter fashion retail
In this age of Amazon with the demand to create an omni-channel shopping experience, Farfetch doesn’t cobble on internet strategies into an established retail operation. Rather it started in the tech world and uses its digital heft to support the day-to-day operations and sales challenges of brick-and-mortar retailers by bringing some 2 million of the world’s luxury shoppers virtually to their door.
“We actually see the future of fashion as centered in the physical store, which I know is ironic for a tech business,” said Farfetch CEO and founder José Neves in an interview with Fast Company. “We are not a retailer. We are here to help brands and retailers find what the luxury experience is of 2020 and beyond. We want to be the platform for the global fashion industry.”
Farfetch’s hook is that experience of discovery that customers find when browsing in a store, but doing it online. London-based Harvey Nichols is the first department store to open its doors on Farfetch, greatly expanding its exposure to luxury shoppers beyond its 15 store locations and its dedicated online shop. Harvey Nichols joins Burberry as major retailers partnering with Farfetch.
Farfetch is on a roll
As with any retailer, foot traffic is a measure of success and Farfetch has plenty of that coming through its “doors.” In 2017 it averaged 2.6 million US visitors per month, a 23% increase over traffic in 2016, according to data compiled by SimilarWeb, a Tel Aviv-based market intelligence company.
Net-a-Porter, on the other hand, lagged in US visitors with 2.1 million guests monthly in 2017, and on par with 2016. “Farfetch’s online growth is impressive,” says Liron Hakim-Bobrov, SimilarWeb’s marketing insights manager. “Farfetch is growing while Net-a-Porter is remaining flat.”
How visitors end up on on each site reveals a striking difference in the two companies’ online marketing strategies. While both receive about 30% of traffic from organic search where the company’s name is entered into the browser url, NAP relies more heavily on branded search than does Farfetch, which gets more traffic for search terms that don’t include its name.
This is key advantage for Farfetch and offers significant opportunity for continued growth against NAP which primarily relies on customers searching out its name. “If you are only getting traffic based on your own name, you get no business from people who haven’t discovered you yet. This represents a lot of potential for growth,” says Hakim-Bobrov.
She further adds that Farfetch is investing in fashion-branded keywords with more youthful appeal and related to menswear and niche brands, like Off White, Raf Simons and Yeezy (Kanye West’s sneaker collaboration with adidas), as compared with NAP which is more focused on its own name and that of heritage luxury brands. Further NAP invests very little in its menswear site mrporter.com.
Farfetch turns those many site visitors into customers as well, according to data from EDITED. With an average price of $595, US-based product sellouts have increased 66.8% year-over-year. New product arrivals have also shown a 33% increase from 2016 to 2017.
Its rapid product-range growth comes thanks to its rewarding partnerships with such a wide range of fashion retailers, large and small. “The speed with which Farfetch is growing is impressive,” Smith says. “It is accessing a broad range of unique and covetable products. Retail stores are its bread and butter, like the Harvey Nichols partnership which gives them tremendous access to product and content.” To date the five biggest brands sold on Farfetch in the US are DSquared2, Dolce & Gabbana, Marni, Prada and Saint Laurent (Kering owned).
Farfetch IPO in the works
With its powerful tech platform and its enviable relationships with independent retailers and brands around the globe, Farfetch is poised for a $6b (£4b) IPO, reports The Guardian. It has hired J.P. Morgan and Goldman Sachs to guide a public offering here later this year. Its valuation will be on par with Yoox Net-A-Porter, which was acquired by Richemont earlier this year with a stated market value of €5 billion ($6.16b).
While direct comparison of Farfetch to NAP are rife, Smith believes that Net-a-Porter is doing better is developing a dialogue with luxury consumers. “One thing that Farfetch will need to concentrate on in the coming year is enhancing its customer engagement,” she says. “In Farfetch’s content perspective and online conversation, it comes across as more of a tech-company than Net-a-Porter, which has a more touchy-feely online narrative. Farfetch needs to be authoritative to their shopper and to guide them toward product more, rather than waiting for them to stumble upon this incredible assortment they offer at the shopper’s fingertips.”
To fix that, Farfetch just brought on board Dame Natalie Massenet who founded Net-a-Porter in 2000 and created its high-touch, authoritative fashion voice modeled after a fashion magazine. Since 2013 she has chaired the British Fashion Council.
With Massenet in Farfetch’s corner, it will likely realize it ultimate goal, which Massenet described in an interview with The Guardian, “Farfetch is proving it is truly the technology platform for the whole luxury fashion industry.”
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Jose Neves, founder and chief executive officer of Farfetch UK Ltd. Photographer: Chris Ratcliffe/Bloomberg
In luxury circles Farfetch, the digital fashion marketplace founded by José Neves that offers selections from nearly 900 fashion boutiques worldwide, is often compared to Yoox Net-a-Porter, the multi-brand online platform recently acquired by Richemont in a reported €2.7 billion deal. Now Farfetch is said to be headed toward a US IPO pegging its $6b valuation on that of Yoox Net-a-Porter.
While both Farfetch and Yoox Net-A-Porter offer multi-branded luxe fashion selections, NAP’s captivity to Richemont’s heritage brands is evident. By contrast, Farfetch operates independently, forging partnerships primarily with independent retailers that pick from the luxury fashion industry’s best and brightest to post selections on the Farfetch marketplace. Farfetch is not conscripted to one luxury conglomerate and its own stable of brands.
Farfetch’s strategy is to form mutually-rewarding partnerships with retailers and brands as a technology leader, both on its global marketplace and through its White Label service supporting Manolo Blahnik, Christopher Kane, DKNY and Thom Browne, among other brands.
The difference with Net-A-Porter is marked. “It is important to think of Farfetch as more of a technology company than as a retailer,” says Katie Smith of EDITED, the retail data analytics firm. “They don’t hold any stock, but are an aggregator. It’s a great point of difference in the market which enables them to have a huge assortment without the risks involved.”
Farfetch supports brick-and-morter fashion retail
In this age of Amazon with the demand to create an omni-channel shopping experience, Farfetch doesn’t cobble on internet strategies into an established retail operation. Rather it started in the tech world and uses its digital heft to support the day-to-day operations and sales challenges of brick-and-mortar retailers by bringing some 2 million of the world’s luxury shoppers virtually to their door.
“We actually see the future of fashion as centered in the physical store, which I know is ironic for a tech business,” said Farfetch CEO and founder José Neves in an interview with Fast Company. “We are not a retailer. We are here to help brands and retailers find what the luxury experience is of 2020 and beyond. We want to be the platform for the global fashion industry.”
Farfetch’s hook is that experience of discovery that customers find when browsing in a store, but doing it online. London-based Harvey Nichols is the first department store to open its doors on Farfetch, greatly expanding its exposure to luxury shoppers beyond its 15 store locations and its dedicated online shop. Harvey Nichols joins Burberry as major retailers partnering with Farfetch.
Farfetch is on a roll
As with any retailer, foot traffic is a measure of success and Farfetch has plenty of that coming through its “doors.” In 2017 it averaged 2.6 million US visitors per month, a 23% increase over traffic in 2016, according to data compiled by SimilarWeb, a Tel Aviv-based market intelligence company.
Net-a-Porter, on the other hand, lagged in US visitors with 2.1 million guests monthly in 2017, and on par with 2016. “Farfetch’s online growth is impressive,” says Liron Hakim-Bobrov, SimilarWeb’s marketing insights manager. “Farfetch is growing while Net-a-Porter is remaining flat.”
How visitors end up on on each site reveals a striking difference in the two companies’ online marketing strategies. While both receive about 30% of traffic from organic search where the company’s name is entered into the browser url, NAP relies more heavily on branded search than does Farfetch, which gets more traffic for search terms that don’t include its name.
This is key advantage for Farfetch and offers significant opportunity for continued growth against NAP which primarily relies on customers searching out its name. “If you are only getting traffic based on your own name, you get no business from people who haven’t discovered you yet. This represents a lot of potential for growth,” says Hakim-Bobrov.
She further adds that Farfetch is investing in fashion-branded keywords with more youthful appeal and related to menswear and niche brands, like Off White, Raf Simons and Yeezy (Kanye West’s sneaker collaboration with adidas), as compared with NAP which is more focused on its own name and that of heritage luxury brands. Further NAP invests very little in its menswear site mrporter.com.
Farfetch turns those many site visitors into customers as well, according to data from EDITED. With an average price of $595, US-based product sellouts have increased 66.8% year-over-year. New product arrivals have also shown a 33% increase from 2016 to 2017.
Its rapid product-range growth comes thanks to its rewarding partnerships with such a wide range of fashion retailers, large and small. “The speed with which Farfetch is growing is impressive,” Smith says. “It is accessing a broad range of unique and covetable products. Retail stores are its bread and butter, like the Harvey Nichols partnership which gives them tremendous access to product and content.” To date the five biggest brands sold on Farfetch in the US are DSquared2, Dolce & Gabbana, Marni, Prada and Saint Laurent (Kering owned).
Farfetch IPO in the works
With its powerful tech platform and its enviable relationships with independent retailers and brands around the globe, Farfetch is poised for a $6b (£4b) IPO, reports The Guardian. It has hired J.P. Morgan and Goldman Sachs to guide a public offering here later this year. Its valuation will be on par with Yoox Net-A-Porter, which was acquired by Richemont earlier this year with a stated market value of €5 billion ($6.16b).
While direct comparison of Farfetch to NAP are rife, Smith believes that Net-a-Porter is doing better is developing a dialogue with luxury consumers. “One thing that Farfetch will need to concentrate on in the coming year is enhancing its customer engagement,” she says. “In Farfetch’s content perspective and online conversation, it comes across as more of a tech-company than Net-a-Porter, which has a more touchy-feely online narrative. Farfetch needs to be authoritative to their shopper and to guide them toward product more, rather than waiting for them to stumble upon this incredible assortment they offer at the shopper’s fingertips.”
To fix that, Farfetch just brought on board Dame Natalie Massenet who founded Net-a-Porter in 2000 and created its high-touch, authoritative fashion voice modeled after a fashion magazine. Since 2013 she has chaired the British Fashion Council.
With Massenet in Farfetch’s corner, it will likely realize it ultimate goal, which Massenet described in an interview with The Guardian, “Farfetch is proving it is truly the technology platform for the whole luxury fashion industry.”
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