The digitization of luxury is unstoppable, said José Neves, founder, chairman and chief executive officer of Farfetch, and the future will be all about hyper-personalization, online and in-store.
It’s not going to happen overnight, though. While Neves — who was in conversation with WWD deputy managing editor Evan Clark at the Fairchild Media Group Tech Forum — has no doubt that fashion and tech will grow closer — it’s imperative that they do — they are still worlds apart in terms of priorities, and their fundamental outlook on business.
A former computer programmer — and footwear retailer — Neves knows both worlds intimately. He said tech companies “don’t get most things about luxury fashion,” in particular the magical intangibles that drive the business.
“This is an industry of emotions, aesthetics, desire and tech companies miss that. Fashion is the antithesis of tech’s value-driven mentality,” he said, pointing to Amazon, which he said prioritizes value, low prices and free delivery. There are myriad other examples, Neves added.
In the other corner, there’s fashion, which hasn’t yet grasped the importance of hyper-personalization in the marketing and shopping experience. Neves said that’s one reason why titles such as Vogue, Glamour, Vanity Fair and Cosmopolitan have been trumped by the likes of Instagram and TikTok.
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“You can’t personalize a magazine,” like you can an app, Neves said, adding that brands and retailers will also need to think about how they smooth the customer journey across geographies, and between online and offline.
“Every customer should be treated like a VIP, and that’s where we come in,” he said. “All of the tech we build is for the benefit of the brands — and the luxury customer.”
He said Farfetch is working with brands, fashion groups and Alibaba on joining the dots in the customer journey and optimizing the retail experience online and offline.
He said Farfetch spends “hundreds of millions of dollars” every year on tech and that its role is to do the heavy lifting and be the “companions and innovation partners” to brands and retailers as they digitize their businesses.
He argued that Farfetch was able to be the companion to these businesses because “we understand the values of the industry, and we know those values are sacrosanct.”
The company is working with Alibaba on delivering new brands to the Tmall marketplace; it is working with Chanel (which does not sell online) on the in-store experience, and with Browns (which Farfetch owns) on personalized customer journeys, and on bridging the online-offline gap at the new Brook Street store in London.
“We are working with [those companies] and others on technology that delivers value and the seamless integration of online and offline journeys across geographies,” he said.
Farfetch is also exploring and promoting new technologies, such as virtual try-on services, which Neves believes have “huge potential.” He pointed to a project that Farfetch enabled between Off-White and Snapchat where customers were able to trial the AI technology.
The online platform is already using AI tech to help customers try on sneakers, sunglasses and — in the future — beauty.
As reported, next year Farfetch plans to launch into the beauty category with an eye toward presenting consumers with a whole look.
The company could also seek to build, or buy, other bridges to beauty. WWD reported in April that Farfetch had held talks with Cassandra Grey’s luxury beauty firm Violet Grey for a potential acquisition, or partnership.
Neves also talked about Farfetch’s recent mega-deal with Compagnie Financière Richemont and Alibaba.
The new global strategic partnership is seeing Richemont and its Chinese ally Alibaba pour hundreds of millions of dollars into Farfetch Ltd., and into a new joint venture called Farfetch China.
The ultimate aim of the alliance is to provide luxury brands with “enhanced access” to the Chinese market, and to fuse physical and digital retail at a time when more people are shopping online, but still hungering for in-store experiences.
As part of the deal, Farfetch has launched on Alibaba’s luxury platforms in China.
Neves said business is going “spectacularly well” and Farfetch has taken more than 3,000 brands to Tmall, and to a potential audience of 800 million customers. He added that Alibaba was on a mission to “digitize the physical world globally, not just in China.”
Going forward, Neves believes that online will account for 40 percent of luxury fashion sales, while offline will generate 60 percent. Offline will also be “digitized” in the way that Browns is today.
As reported, Browns wants its customer journey to start anywhere — on a mobile phone in the back of a taxi; on a tablet in someone’s kitchen. or in-store. The retailer wants to be able to communicate with the customer at every stage of the journey.
There will always be a role for the physical store, Neves said, “and we have a very ambitious roadmap for the future.”
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