Every day, we receive numerous pitches touting the "next big thing" in e-commerce. Usually, these websites, apps and tools are way too complicated, useless, annoying, or all of the above to ever actually catch on. Occasionally, something special like Gilt Groupe, Moda Operandi, or Rent the Runway emerges.
Farfetch, the online hub for independent boutiques across the world (which might otherwise not be able to afford to run e-commerce), is one of those rare successes. And now, with another $20 million in funding—a round led by Conde Nast—Farfetch founder José Neves wants to revolutionize how e-commerce and traditional retail work together.
Last night Farfetch hosted a digital dress up event, where editors could style looks brought in from 10 Farfetch partner boutiques including Anna Della Russo's Dante 5 Donna in Bari, The Webster in Miami, New York's Fivestory, and Victoria 46 in Bucharest. (You can see Leah's look below.)
I spoke with Neves, who is spending some time in New York, earlier this week.
Fashionista: We all know what Farfetch is now, but can you give me a little background on how it came to be? José Neves: My first business was a technology business. I was 19 years old, living in Portugal where I'm from, working as a computer programmer, developing software and technology for the fashion business. And I fell in love with fashion. When I was 22 I moved to London, started a shoe brand, Swear, and opened a store. That business evolved into a multi-label showroom, and that's still my other business.
When did Farfetch launch? In 2007, big e-tailers were becoming more and more relevant. Small independent boutiques were at risk. Their survival was threatened. You know, they buy with their hearts rather than with their spreadsheets. I thought, we can do something to help. The internet could help them become relevant again. It's a great business from a b-to-b side of things: it's difficult for each one of them to individually have a proper e-commerce presence. And from a consumer side, suddenly you can shop the streets of Milan, Paris, Stockholm, and Los Angeles from anywhere in the world. We started in October 2008.
What does this latest round of funding, led by Conde Nast, mean for the company? The business is very well-funded already, so it’s not like a game-changer for us. But we’re doing $130 million in sales, growing 150% a year, and you do need funding to keep up with that kind of growth. It allows us to be more ambitious. One area for growth is international. we want to develop more international markets: Japan, potentially Russia, the US, Brazil. The other area of growth is technology, the user experience side of things. We want to focus on omnichannel—the physical and digital experience—as well as mobile and tablet.
When you hear mobile shopping numbers and mobile website traffic numbers for 2012, it's kind of crazy. Why did it take so long for fashion e-tailers to catch on to its importance? Mobile was 5% of our sales in 2011, and 25% in 2012. That’s even without an optimized mobile experience. But that includes smartphones plus tablets—most of it is tablet, not smartphone. When you look at the demographics, our customers are definitely in the higher income bracket. They all own tablets, which lend themselves to the fashion experience.
What do you mean by "omnichannel"? I think multichannel—omnichannel—will be the next big thing. Multichannel basically is sales made in one channel, completed in the other. Like finding out about a new gadget online and going into the store and buying it. Or someone at the car dealership test-driving the car and then buying it somewhere else. Cross-channel experience is really the future; in consumer electronics, most people research online and then buy offline. Fashion is the next category that will be revolutionized by that. It’s bound to happen, because people want to try on the clothes. The high street already understands that. But not luxury. The only one doing interesting things is Burberry. Their Regent Street Store is the store of the future. Other brands/retailers haven't done anything. I think that's where Farfetch can really be a revolutionary company.
How? We have thousands of locations worldwide. We're developing technology to enable…imagine you know you’re going to be in LA, and you buy something form A'maree's in Newport Beach. We'll have it delivered to H. Lorenzo on Robertson, and it'll be there waiting for you along with a couple of pieces from H. Lorenzo that you might like. And then maybe you want to buy something from H. Lorenzo that they don't have in your size. We can get it from the store in Paris that has it, so it'll be delivered to you and waiting for you when you're back in New York. There will also be an air miles-style loyalty card that will reward you. All the frustration of going to a store and it not having what you want will go away. But it needs to be done in a way that feels like second nature. I don't want to make it harder for people, I want to make it easier. I'm very happy that it's our next big step. The big websites, they don't have the stores. To do this on a global level, you need a network of independents, and at the present we're the only network.
If this is what shopping is like in the future, we can't wait to get there.