Farfetch beats YNAP. Next, it will have to compete with Amazon – Vophs.

When Richemont announced that it would. is selling its majority stake. The move by luxury fashion business Yoox Netaporter Group to Farfetch, a rival platform for designer goods, was seismic news for the fashion industry.

After the deal, Farfetch will sit comfortably as the leader in luxury e-commerce. MyTheresa, another publicly listed luxury platform, and to a lesser extent Ssense and Matchesfashion have been touted as other competitors, but with this sale, it is now clear that luxury fashion will dominate online. The two main players in the race are Farfetch and Amazon Luxury. .

While YNAP and Farfetch went head-to-head a decade ago, YNAP under Richemont has failed and with the sale of Farfetch, Richemont Write down $2.7 billion.. YNAP has grown from a trendsetting online fashion pioneer to the odd child in a family of companies specializing in hard luxury such as jewelry and watches. The deal also represents a major win for the asset-light model of online luxury. YNAP’s flagship brand Netaporter essentially functions as a digital department store. It buys inventory from brands, warehouses and ships, unlike Farfetch’s model, which aggregates boutiques around the world but does not hold inventory.

Luxury’s uneasy relationship with e-commerce

Although the luxury fashion market is huge, the value of some $110 billion worldwide, it is one of the last remaining categories not fully penetrated by e-commerce. Clothing is hard to find online and fashion shopping has a high return rate.

Video and live streaming can help some, but replicating the in-person shopping experience is difficult. It’s no coincidence that e-commerce started with low-variation items like books and electronics before spreading to other categories. When online styling first came, it was for things like shoes, which are less complicated to fit. For example, shoe seller Zappos, now owned by Amazon, was an early adopter of e-commerce.

Cosmetics can also be difficult to sell through e-commerce but given that luxury beauty is still much more affordable than luxury apparel, buyers don’t mind taking the gamble. If the product doesn’t turn out exactly as they expected, they’re out $70, not $7,000.

It’s not just that consumers are hesitant either. Brands are also reluctant to relinquish control over the customer experience. Clicking a few buttons and having the cardboard box arrive at the doorstep a few days later is ultimately what that special something lacks. Luxury houses take great pains to ensure that there is a high level of customer service, and offline some have even created invite-only luxury boutiques to distinguish themselves from VIPs.

Enter Amazon.

Amazon Luxury, now two years old in the US, is the world’s largest retailer’s foray into designer fashion. Although the number of brands on the platform is still small, it expanded into the European market in June, and Amazon’s huge customer base and technological capabilities make it a force to be reckoned with.

While Farfetch may be able to infer from customer data whether someone prefers YSL over Dior or has a penchant for A-line skirts, Amazon, with its sprawling empire in groceries, books and furniture. Able to see consumer taste, and analyze data about the shows they watch and the music they listen to, creating an in-depth customer profile and AI-powered predictions unmatched by others. can.

Amazon Luxury’s brands capitalize on their desire to control the shopping experience, allowing them to manage inventory, selection and pricing, as well as offer a huge customer base. If YNAP built a department store online, Amazon is trying to build a luxury one. Mall, which has many digital shopfronts managed by the brands themselves.

Finally, luxury fashion e-commerce has room for more than one player. Farfetch brings deep fashion credibility to a sector that is considered to be the best. The challenge for Amazon is to overcome its image as an insecure retailer and create a better portal on which big-spending shoppers will want to buy the latest designer goods.

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