Farfetch’s acquisition of Brown’s London boutique will see it gain a significant advantage over multichannel and pure-play rivals.
In the luxury space, most retailers are either brands, or department stores so they generally don’t have many physical shops, which gives them a relatively small, local footprint.
Stores are useful for a continuation of a luxury experience that can’t be replicated with a courier, and Farfetch’s boutique coverage is greater than pretty much anyone else out there.
That is the kicker and the reason that other luxury pure-plays will have to look again to see if they want to compete with that.
“The acquisition will force pure-plays to again look at bricks-and-mortar stores”
Darryl Adie, Ampersand
For luxury retailers, where experience is of the utmost importance, it’s not only important to sell a product, it’s vital to make an impression. Pure-play stores in the past have been limited by the online and delivery experience.
The acquisition of Browns is a coup for Farfetch and a sign that luxury is changing. Farfetch’s aspiration to change multichannel luxury has been evident for some time. It already brings the unique experience and product range of each of its boutique partners to an international, digital audience.
Browns is a much-loved boutique, with a reputation for innovation and that is something Farfetch will continue. As with its peers on the site, Browns will remain independent, but the Browns customer expects something different and they are likely to embrace the digital change this Farfetch deal brings.
The acquisition will force pure-plays to again look at bricks-and-mortar stores. Farfetch’s boutique network will now be the envy of etailers and department stores alike. Farfetch’s biggest challenge will be maintaining a consistent experience, while still innovating.
How the sector will respond
It will be interesting to see the approach taken by the pure-plays in competing – whether they will want to establish their own estates, with a smaller footprint than Farfetch or look to directly compete with Farfetch by working with boutiques (because they offer click-and-collect in boutiques other than Browns).
It is no longer acceptable for the luxury sector to dismiss the online experience, nor provide a sub-standard service to online shoppers. At present that is what the gap is between pure-play and other luxury brands. If Net-a-Porter follows suit, luxury brands could be in serious danger of losing transactions.
Stores would need significant investment and Farfetch has a big head start in signing up boutiques. It would seem implausible for them now to do nothing.
“Farfetch has overcome many of the logistical and technological challenges that other luxury retailers face”
Darryl Adie, Ampersand
Excellent multichannel experiences in luxury have been in short supply and pure-plays have dominated online. Farfetch has recognised the role of the physical experience and will use Browns as the basis for defining its vision for retail over the next five to 10 years.
Farfetch has overcome many of the logistical and technological challenges that other luxury retailers face.
Click-and-collect across Farfetch boutiques is just the beginning. It has also already overcome significant operational challenges, such as inter-store shipping and returns. You can be sure that interactive, digital experiences within boutiques are not far behind.
What will be interesting to watch is how it maintains focus on customer experience and avoids alienating customers with whimsical fads. The success of pure-play luxury retailers so far is just down to good execution of the basics, with some nice packaging.
Farfetch has a significant opportunity to pull away from rivals. I would expect to see a more engaged shopping experience, with the opportunity for Browns to up-sell customers in-store having started a transaction online.
It would be interesting if Farfetch launches a click-and-try service that allows customers to purchase online and try on items in-store. Through digital technologies it will be able to extend this to the whole network of boutiques.
Success will be completely dependent on the product range and the integration of the customer experience in boutiques and online.
- Darryl Adie, managing director at ecommerce firm Ampersand