The technological truth about FarfetchAndrew Smith
The ease of shopping on Farfetch has no doubt contributed to its mass appeal amongst millennials seeking convenient retail therapy. The same can be said for its vast network of brand partnerships with both established luxury names and up-and-coming designers. However, it’d be far too easy to package up Farfetch’s success and, its recent move to launch its IPO, as just another indication that accessibility and variety are driving the prevalence of e-commerce. There is another factor at play here, alluding to what it takes to be successful, not just in online retail, but modern retail in general.
Farfetch made sure to mention in its filing that 35% of its employees at the end of 2017 were in the technology and product department, made up of over 800 full-time data scientists, engineers, and production staff. What’s more, the company laid out its plan to increase its headcount of data scientists and engineers to around 1,500 by the end of 2018. To put it simply, and in the words of Farfetch itself, it’s a technology company at its core, operating “at the intersection of luxury fashion, online commerce, and technology.” (Forbes, 2018)
Understanding exactly which products work, forecasting trends, optimizing pricing and identifying key customers and how best to reach them are core requirements of any successful retailer. Farfetch is able to fulfill them much better than most with inventory, behavioral and transactional data for over 335,000 unique units from more than 3,200 brands. That’s not to mention the rich pool of global data held by its two primary investors, China’s e-commerce giant, JD.com and Condé Nast owner, Advanced Publications, which Farfetch has access to.
This particular case represents a big win for e-commerce. However, the key to the future of retail is that we refrain from thinking about data solely in terms of online, as it also has vast potential to enhance the experience of bricks-and-mortar. Cushman and Wakefield Spain, for example, has recently launched its ‘Infinity Platform’. Through visitors’ interaction with its shopping centers as well as geolocation and Smart Data, the platform collects, analyses and processes information about shoppers. Algorithms then allow centers to send hyper-segmented information to visitors in real time, anticipate behavior and provide a tailored experience. Cushman predicts that the platform will allow it to perfectly understand 60% of its Spanish customers in five year’s time.
Whether online, in a shopping centre, or on the high street, allowing customers to have their own personalized shopping experience is not only bound to surprise and delight but is crucial for retailers to thrive and survive. This will only come with investment in innovation and technology – the latter being the keyword for future-proofing retail. Funnily enough, it came up a total of 173 times in Farfetch’s filing.