Fashion Business Platform Has Huge Market Potential

"2018" jointly released by McKinsey and fashion business review.

In the The State of Fashion 2018, "platform first" is listed as one of the ten major market trends.

Indeed, no matter what the capital is.

The financing and takeovers are still news and fashion of new technology and new cooperation.

The fierce competition in the platform can be seen.

The platform is optimizing services, collecting data, creating personalized experience, trying to cater to customers' new consumption concept.

In fact, optimizing the consumer experience is the difficulty that must be overcome in the development of the fashion business platform. Behind the "platform ahead" is still the idea of "consumers first".

In the information age, consumers are no longer familiar with the way of electronic retailing.

According to McKinsey, the online sales volume of clothing and footwear will reach a compound annual growth rate of 10% from 2017 to 2020.

The display and integration of commodity information by electronic business platform greatly reduce the cost of consumer selection.

People are willing to devote their time and energy to three brands of goods between brands, and are willing to try different electronic business platforms. Improving customer loyalty is not just a problem facing the brand.

The change of consumer behavior is shaping the business ecosystem of e-commerce sales. The platform is not only a medium for information pmission between brands and consumers.

In addition to price and product quality, people put forward higher requirements for the experience of the whole online shopping process.

The beauty and easy operation of the website interface design, the marketing mode of the platform, the after sale service and the speed of logistics have become the consumers' consideration criteria for the electronic business platform.

Farfetch, a London fashion business, has been working with luxury brand Gucci to launch door-to-door services within 90 minutes in a limited city, pushing logistics to a new level.

(photo: Farfetch Chinese official website)

Farfetch was founded by Portuguese entrepreneur Jos e Neves in 2008. Through the "zero inventory" business mode, focusing on the content and service experience of the platform, it quickly established its competitive advantage and completed the 110 million US F round of financing in 2016.

Now, this platform is focusing on Technology in the direction of development.

According to the world clothing and shoe net, in April 2017, Farfetch launched the "future store" test version.

This offline store combines the data functions of mobile devices, smart clothing mirror, racks with RFID technology and other cutting-edge technologies, trying to personalize service customization through data, and seamlessly link online and offline sales to optimize the consumer experience.

(photo: Farfetch's "future store")

In March of this year, Farfetch again came to the news of preparing for listing, and was in contact with investment banks such as Goldman Sachs Group and J.P. Morgan chase.

Although the 2016 earnings report shows that Farfetch still faces a net loss of 35 million pounds, the positive response of market investors still reflects the huge market potential of the fashion business platform.

Resource restructuring is the trend

Consumers choose the online platform because the breadth and convenience of the information provided by the provider are sufficiently attractive compared with the traditional retail.

The fashion business platform is also actively acquiring mergers, consolidating this advantage by restructuring resources.

In cooperation with retail groups, the e-commerce platform has expanded its business scope and provided technical support for physical retailers.

Japan's main footwear and fashion business platform Locondo announced recently that it will acquire all the shares of Shaddy, a chain gift retailer in Japan.

Locondo's e-commerce channel and logistics service will help Shaddy to save costs and improve customers' shopping experience through digital business.

Farfetch's main competitor, YNAP, which was merged by two shopping platforms of Yook and Net-a-Porter, was bought by the Swiss luxury brand company in March this year.

There are famous luxury brands such as Cartire, Earl, MontBlanc and so on, which can be predicted that these brands will launch more in-depth and exclusive exchanges and cooperation with YNAP.

This is not only a widening of sales channels for luxury brands, but also an important way for YNAP to attract loyal users as an e-commerce platform.

In addition to cooperation with the group, the fashion business operators also took note of the opportunities behind the website user data.

Canadian fashion electronics Ssense recently announced that it will purchase the fashion website Polyvore, led by Jess Lee, and shut down the website after collecting user data.

(photo: now enter Polyvore's page)

The choice of consumers, especially the young generation of the millennial generation, is being influenced by the social media constantly permeating life.

According to McKinsey's survey, social platforms and online reviews have 74% and 55% impact on consumer choice respectively.

Through the KOL on the social platform, promoting brand, creating star products and setting up a more lively and youthful image has become a common marketing tool for Chanel, Louis Weedon and other luxury brands.

Polyvore is to conform to this kind of community and personalized consumption concept, and set up a community that users can create, share and collect fashionable matches, and organize creative match matches to form their own user groups.

After purchasing Polyvore, Ssense will make use of its user data to better predict consumer demand, customize personalized services and optimize its online sales.

Ssense said that it will maximize the economic value of Polyvore data. However, the arbitrary decision to close the website has caused many Polyvore users' dissatisfaction. The disappearance of the online community has caused users to lose a platform to share fashion information and cut off the virtual social connections.

It seems that even if the data integration of virtual space is integrated, the electronic business platform still needs to think about how to take care of the mood of consumers and do a good job in the smooth restructuring of resources.

How platforms communicate with consumers

Big data can predict the future sales trend and scale, facilitate the timely replenishment, price setting, reduce the pressure of warehousing and logistics, and launch personalized product recommendation according to personal information to meet the diverse needs of consumers.

However, data analysis inevitably leads to a grey area of privacy leakage.

Facebook Facebook broke out the data leakage scandal, resulting in huge user churn and image degradation. Privacy protection and data utilization on the network platform have become a hot topic of social concern.

In the fashion industry, the US sports brand Under Armour also said that its own sports app MyFitnessPal was stolen by hackers, and 150 million user information was leaked.

On the one hand, the electronic commerce platform needs to do well the protection measures, enhance the level of data management technology; on the other hand, the platform should also establish a trust connection with consumers so that they are willing to hand over the data to the platform, which depends on the platform's image building and good communication with consumers. After all, this is a consumer led process.

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In 2017, Farfetch bought the Style.com website of Kangtai Nash group and its pformation provider. Its content services, user data and media resources will be combined with Farfetch's technology resources to attract more consumers who want quality and lifestyle.

YNAP's Net-A-Porter electric business website, following the launch of the paper magazine Porter in 2014, has launched a digital news platform Porter Digital this year. Consumers can read directly and click on links to buy goods, which further strengthens the ability to cash in the content.

(photo: Porter's latest magazine cover)

The e-commerce platform not only provides products and purchase channels, but also assumes the role of fashion media.

The way of content operation strengthens the emotional communication between the platform and consumers, and the users who are attracted by the platform values will also have higher loyalty.

How to cooperate with luxury brands

Facing the increasingly fierce competition in the fashion business, the luxury brands that rely on traditional retailers can only survive in the new wave of digital sales by accepting and embracing the platform.

Opening online channels can help brands reach a wider consumer group and become a springboard for their entry into overseas markets.

Keeping up with the trend of digital sales in a timely manner also lets brands see new possibilities for future growth.

However, joining the electronic business platform means sharing control of brand control. Brand image display and user data are affected by platform processing.

In the face of the competition for brand sales rights, the choice of the platform is not only the planning of the brand's own development, but also the game with other competitive brands.

LVMH group chose to launch its own e-commerce platform, 24 S vres, and the group's luxury brand C e line has entered the platform across the board.

More importantly, whether online sales can maintain the consistency of brand experience is still a problem for luxury industries, which flaunt high quality and excellent experience.

Chanel completed its intention investment in the fashion business platform Farfetch in February this year, but did not choose to sell products on the platform.

Despite the need to use digital services to enhance communication with consumers, Chanel still believes that the customer experience of physical stores can not be pmitted through the Internet.

Comprehensive electricity providers join in the melee

Large integrated electricity providers also aim at the broad market of fashion industry.

Take China as an example, Jingdong and Tmall have launched TOPLIFE and Luxury Pavilion luxury electronic business platforms in an attempt to seize the opportunity when the domestic luxury market is not yet ripe.

In 2017, Jingdong invested nearly $400 million in the Farfetch platform to provide technical support for logistics, marketing and finance.

Farfetch's fashion resources are paving the way for Jingdong to enter Luxury Retailing.

Tmall's Luxury Pavilion cooperates with LVMH, Estee Lauder group and Swatch group by virtue of large data and a deep business basis.

(photo: Jingdong's TOPLIFE official website)

The entry of these business giants is bound to raise the entire industry standard. They are exposed to a large number of young consumers. Their data, logistics, technological level and popularity are difficult to match with ordinary fashion providers.

However, too large business scope is also a drag on the development of these platforms. Fashion providers can still create their own competitive edge by means of market segmentation, exclusive cooperation with brands, community building and content operation.

What fashion providers want to think about is how to grasp the idea of "consumer first" and attract larger and more loyal customers.

More interesting reports, please pay attention to the world clothing shoes and hats net.