In this exclusive interview with Savoir Flair, both José Neves and Natalie Massenet share their thoughts on the future of retail.
Is there such a thing as a “future-proof” retail model? According to Farfetch’s founder, José Neves, there absolutely is. The fashion world is currently struggling to navigate the treacherous waters of retail at a time when a new form of tech-savvy, highly informed, in-the-know consumer is creating demands that are turning the industry on its head. Some brands thought that a new “see now, buy now” model – which provided shoppers the opportunity to purchase items as soon as they hit the runway – was a panacea, but it is already proving to be a failure. Early adopters like Thakoon and Tom Ford, for instance, have already abandoned it.
While everyone tries to solve the problem of satisfying a changing customer who behaves radically differently than she did a few short years ago, Farfetch has got things figured out. As an e-commerce platform, it doesn’t have to bother with supply-chain headaches like a retail brand does, but it does have to figure out how to give shoppers around the entire globe the items they want now in a timely fashion. Patrons of Farfetch are obsessed with its beautifully curated collections from some of the world’s most obscure but sought-after designers, which arrive at their door from the brand itself – Farfetch is simply the intermediary.
The elegant solution that is Farfetch’s retail model has become a stunning success story and attracted the likes of entrepreneurial powerhouse Natalie Massenet, getting her on board with Neves’ unique vision. The company is part of a very small number of rare “unicorn” start-ups, valued at over 1.6 billion dollars. With the legendary Massenet now on board at Farfetch as a non-executive Co-Chairman, one can’t help but think that if it hadn’t been for her starting Net-a-Porter in 2000, Farfetch might never have existed.
In this exclusive interview with Savoir Flair, both Neves and Massenet share their thoughts on the future of retail, Farfetch’s extraordinary vision, and the ins and outs of running a billion-dollar empire.
We are a tech platform for the best curators and creators of fashion and we are obsessed with providing our customers with a completely unique experience.
Farfetch.com’s unique retail model means being the intermediary between luxury boutiques around the world and the consumer. In translation: you stock no actual inventory and enjoy significantly reduced operational overhead since the consumer orders through Farfetch and the boutique itself fulfills the order. Where did this singular idea come from and, once you had the idea, what were your first steps toward executing it?
Neves: It was in 2007 at buying appointments during Paris Fashion Week, for my previous brand Swear, that I came up with the idea for Farfetch. It was clear that digital was going to be huge – retailers who had a strong online presence were growing and those who didn’t were really feeling the pain. I was thinking about all these amazing boutiques and wondering what might happen to them. They had everything: the best brands and great buyers with a completely unique point of view on fashion. The only thing they were missing was that online presence. This is the premise that Farfetch is built on; by giving these great boutiques an online platform, we extended their reach to a global audience they were not previously able to access.
We’ve been a global business from the beginning; we launched Farfetch in 2008 with 25 boutiques from five countries via our very own proprietary API-first omni-channel platform. Our strength lies in our business model – we’re completely omni-channel on a global scale. Typical e-commerce businesses buy and sell inventory, while we hold no stock; we are a tech platform for the best curators and creators of fashion and we are obsessed with providing our customers with a completely unique experience.
Bloomberg recently reported that Farfetch was exploring the possibility of going public. Will the looming economic and political turmoil in both the US and the UK (following the presidential election and Brexit vote, respectively), are you rethinking that srategy?
Neves: IPO is the natural next step for the company. The immediate focus for us is continuing to build on the amazing technology platform that is Farfetch, so when the time comes we are stronger than ever.
Big data has been instrumental in tracking and understanding a rapidly evolving consumer base, but some e-tail sites gather the data without knowing what to do with it. How is big data informing the Farfetch model? How do you turn metrics into engagement? What are you hoping to put into practice in the near future?
Neves: At our London HQ we have a dedicated team of data scientists whose focus is to analyze the customer data we have access to and translate it into something that will enhance customer experience and engagement. An example is the level of tailoring we’re managing in campaigns and newsletters, based not only on explicit preferences but implicit data like what consumers are browsing online and clicking on, to offer different personalized stories and recommendations that are tailored to the customer. Our team is also looking at developing models to measure propensity to go to second order, lasting likelihood, and scoring customers based on levels of engagement in various scenarios.
Consumers want e-tailers to know what they want even before they know that they want it themselves, and they want to be able to shop their favorite pieces and receive them the same day.
According to the leading trend-forecasting group WGSN, the consumer is becoming more concerned with experiencing authentic engagement with the brands they buy. However, digital experiences seem flat and one-dimensional and don’t portray the tangible, tactile side of the merchandise. How does Farfetch personalize the retail experience? What are you doing to engage a consumer who is more discerning and more informed than ever before?
Neves: Customers are very different now compared to when we started – their expectations when shopping online are higher than ever. They want a personalized e-commerce experience that’s inspiring, convenient, and provides a level of instant gratification; they want e-tailers to know what they want even before they know that they want it themselves, and they want to be able to shop their favorite pieces and receive them the same day.
With the level of information that we are now able to access and the level of personalization we are able to provide online, we are able to ensure customers receive the best shopping experience. Through customer profiling work, social media, direct interaction with our customers, and data, we have the opportunity to understand things about them and their shopping habits as they move through their customer lifecycle – from even before they’ve made their first purchase with us to becoming a customer or joining our VIP client service. The important thing for luxury e-commerce sites to keep in mind about their customers is to listen to their needs and respond quickly and efficiently with solutions.
To provide an authentic experience for our customers that really reflects the uniqueness of Farfetch, we also partner with like-minded brands to offer exclusive pieces our customers can’t find anywhere else. Most recently, we partnered with Manolo Blahnik. In March 2016, we launched the brand’s first e-commerce site, powered by Farfetch Black & White. A year later (March 2017), we worked together to create an amazing exclusive capsule collection to mark the launch of the brand on the Farfetch site.
It is clear to me that you and Natalie Massenet both share a strong, entrepreneurial drive and preternatural instincts when it comes to discovering the next big thing, be it in fashion, technology, or e-commerce. What other similarities do you share? What is the common cause between you that made you choose her as Farfetch’s new non-executive Co-Chairman?
Neves: It is a dream come true to have Natalie partner with me, with a shared vision and tremendous will to – yet again – shape the future of luxury. Our respect and admiration is mutual, and Natalie is a huge fan of Farfetch and our unique business model, which we both believe is the model of the future. Natalie has an unrivaled entrepreneurial instinct and understanding of the luxury consumer, and she knows how to build global brands like no one else.
I thought it was really interesting that brands like Céline – which is associated with discreet, exclusive luxury – are deciding to join the mainstream by marketing via social media and e-commerce. What are your thoughts on luxury going mass? Does that mean luxury loses some of its luster?
Neves: The luxury fashion industry is still adapting to the digital age we live in; increasingly, luxury brands are seeing that having an online presence can be a force for good for them. Having their own online presence means that they are able to have more control over and ownership of the messaging that is being projected to the online world about their brand. What makes something luxury is the craftsmanship behind the piece and the whole experience that is provided when buying it. If this is still all high quality, then nothing is lost.
Natalie has an unrivaled entrepreneurial instinct and understanding of the luxury consumer, and she knows how to build global brands like no one else.
There is a global misunderstanding of fashion in the Middle East, where the majority of the world thinks that women here are only concerned with modest, traditional dress. However, there are many Middle Eastern designers uprooting that notion with modernized creations. Names like Sandra Mansour, Jean Louis Sabaji, Noor Fares, and Nathalie Trad come to mind. What is Farfetch’s approach to dealing with the diverse needs of the Arab shopper?
Neves: We understand that customers’ shopping habits and tastes vary completely from region to region and from person to person. We are a destination for the world’s greatest selection of luxury; thanks to our vast network of partners, each with their own buying style, we have an unparalleled offering, everything from smaller emerging brands to high-end big names and even the most interesting vintage and couture pieces that you can’t find anywhere else. This allows us to cater to the ever-varying and evolving tastes and habits of our global customers.
For our customers in the Middle East and globally who do favor modest fashion, we recently worked with the IFDC (Islamic Fashion Design Council) to highlight fashion-forward luxury pieces on Farfetch that cater to customers who are looking for fashion-conscious modest items. However, I agree that the Middle East is a great hub for luxury fashion, with a selection of fresh and innovative design talent that is definitely leading the way.
Nathalie, how has your fashion editorial experience benefited and/or prepared you for a career in retail and e-commerce?
Massenet: It gave me an understanding of the importance of content when building a global brand.
It’s a simple idea that is staggeringly difficult to execute, and Farfetch has cracked it!
What sets José Neves and Farfetch apart from the competition?
Massenet: I have admired what José has achieved since he founded Farfetch in 2008. He is amongst the best of today’s e-commerce entrepreneurs, a true innovator, and a visionary leader when it comes to the future of fashion. José and his team have forged their own path, reimagining the future of fashion and technology with a unique business model. Farfetch aggregates the most beautiful fashion curated by the world’s best boutiques and brands, with the widest selection of designer styles from the best designer flagship stores into one easy-to-shop and brilliantly conceived API-enabled platform where customers can find the biggest selection of luxury fashion anywhere in the world. A simple idea that is staggeringly difficult to execute, and Farfetch has cracked it!
Your Instagram announcement stated, “If I were starting an e-commerce company today, I would do it very differently.” Does that mean that, if you got a do-over knowing what you know now, you would have enacted something more along the lines of the Farfetch model?
Massenet: I believe that Farfetch has the most exciting and innovative business model in the fashion industry today, which is why it is the only fashion e-commerce platform that I will be involved with. As I said on Instagram, when I first thought about selling fashion online, the world was only just waking up to the possibility. Today it’s very different; we expect everything, anytime, anywhere, and the tech and logistics platforms that power the best e-commerce sites today have new de-centralized business models. In joining Farfetch, I am joining a world-class tech company. It’s not a coincidence that all the most successful companies, like Facebook, Amazon, and Apple, are also API-enabled platforms.
Do you ever think about how Farfetch and other luxury e-tailers would not exist today had it not been for the pioneering example set by Net-a-Porter?
Massenet: I am really proud of what we built at Net-a-Porter, but my focus now is on working with José and the Farfetch team as they continue to realize their ambitions and build Farfetch into the definitive global tech platform in our industry. Farfetch is where I believe the future lies for fashion retailing.
Would you consider Farfetch’s unique business model “future-proof” given the recent struggles of the luxury industry and Farfetch’s success despite that?
Massenet: Yes. Farfetch is a great example of what I call the “collaborative economy” – when businesses that might normally be seen as competitors are working together towards the same goal of giving the customer the best possible product and service. Farfetch enables independent boutiques around the world to reach and sell to a global audience. They get the economy of scale of a multinational retailer whilst still retaining their brick-and-mortar heritage. This unique nurturing approach drew me to Farfetch. Together we are stronger!
I believe that Farfetch has the most exciting and innovative business model in the fashion industry today.
What are the other qualities that attracted you to Farfetch?
Massenet: The intersection where fashion, technology, and the consumer meet has always fascinated me. What Farfetch has done to revolutionize the offline/online approach in the fashion sector meant that, when José asked me to come onboard, it was an opportunity I couldn’t turn down. The timing was just right.
Can you help us understand what the role of a non-executive Co-Chairman is exactly?
Massenet: I will join the board of Directors at Farfetch in an advisory role. As non-executive Co-Chairman, alongside José, I will bring my energy and passion for the consumer experience to the Farfetch business and build on everything they have achieved so far, with a particular focus on growing the global brand and strengthening its partnerships with the fashion industry.
Do you think online retail will completely replace physical retail eventually?
Massenet: I am obviously passionate about the online consumer experience, but I also believe that consumers will always be drawn to the theater of luxury retailing and the sensory experience of “trying before you buy”. There is something irreplaceable and social about the shopping experience, so no – I don’t see the physical store ever going away. It’s part of the reason José’s vision for Farfetch is so smart; it gives businesses who wouldn’t otherwise have had a chance the reach offered by the internet while still protecting their brick-and-mortar stores.