If e-commerce and the luxury sector have long been considered incompatible, luxury brands are now making a strategic shift and accelerating their digital transformation.
Luxury marketplaces are popular with companies looking for platforms that allow them to reach new consumers while maintaining control of their brand. By opting for an omnichannel approach, companies benefit from the digital expertise of marketplaces and their portfolio of active consumers. Brands can strengthen their brand awareness by reaching a new customer base that was previously difficult to access.
Millennials are expected to represent half of the luxury market by 2025, according to Boston Consulting Group. The first digital natives, this new generation of consumers, is gradually reversing the trend and shaping a new way of consuming.
"They influence us and each other via new technologies," declares the analyst in charge of the Fashion and Luxury division at MCKinsey's Paris office.
Already in 2018, 36% of them preferred to buy a luxury item online, on a marketplace. Marketplaces, the first disruption in the global retail industry, play a key role in e-commerce enabling it to be combined with the luxury world.
Founded in 2007 by José Neves, Farfetch was born out of love for fashion. Launched in 2008, Farfetch began as an e-commerce marketplace for luxury boutiques around the globe. Today, it is the leading global platform for the luxury fashion industry – connecting to customers in over 190 countries, more than 30 million visitors each month, and an astonishing growth that lifted its revenues up to 1,7 billion euros in 2020.
Aside from the company’s remarkable development, Farfetch’s rise as a main player on the online fashion market embodies the flourishing of the luxury sector online. As José Neves indicates himself:
“This division between physical retail and online, it’s imaginary. It’s only separated because companies have not had the technology and the strategy to really unify it. That is the next frontier.”
Launched in June 2017, 24 Sèvres, rebranded 24S is the online luxury fashion retailer of the LVMH group. Its website, available in French, English, Chinese and more recently Korean and German, attracts a very large international customer base. In 2019, their international sales represented over 80% of total revenue.
With a selection of more than 300 fashion and beauty brands, from the biggest luxury houses to emerging designers, 24S offers its customers high-end services: express delivery in more than 100 countries, a team of advisors available 24 hours a day and Personal Stylists.
With its expert teams, 24S connects the world to Paris, the international capital of fashion, and its creative and cultural effervescence.
"24S injects Parisian chic into the world of e-commerce" Hypebeast
Neteven, a Lectra company, provides the SaaS solutions and human support needed to efficiently centralize distribution on marketplaces. Its platform has been developed for brands and in collaboration with marketplaces to give powerful functionalities for the entire sales cycle. With a unique interface and personalized advice, Neteven helps fashion and luxury brands build and implement their omnichannel strategy.
This division between physical retail and online, it’s imaginary. It’s only separated because companies have not had the technology and the strategy to really unify it. That is the next frontier.
Founder and CEO of Farfetch