The new models of fashion e-commerce

Shopping online for fashion – this has been a big debate since a very long time. Retailers realized the potential of distributing their merchandise online and also the necessity to stay competitive in the market. Basically any bigger player in the fashion industry has an online shop nowadays.

If you compare shopping online and offline, the online experience does not really reflect the experience that most shoppers are looking for. You need to go from one website to another and sometimes you would find a department store, like de Bijenkorf. Still, these stores have physical locations, a sophisticated distribution system and warehouses. Now let’s think about this quote that has appeared quite frequently in the last months:

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.”

Something similar is happening in fashion retail but it comes at a much wider diversity. The incumbents are Yoox and Net-a-porter, which have announced their merger a few months ago to become the largest fashion e-tailer with €1.3 billion in sales. They are, however, still very similar to the traditional model since they own inventory. Opposed to this, platforms have risen such as Lyst and Farfetch, and they are providing a one-stop shop with products from a number of different brands. And the best part is that they don’t own any stores or inventory. These are platforms that mediate between the traditional retailers and the online shoppers through a universal shopping cart and earn a commission from the retailers. As the founder of Lyst, Chris Morton said:

“With Lyst, we looked at the real world and said, look, shopping malls exist. Shopping streets exist. These are very desirable places for consumers to go and for brands to sell. But online, this didn’t exist. People were building beautiful boutiques in the middle of a desert.” 

The platforms are similar to most social platforms by creating a community of online shoppers: You can follow brands, you can create a wish list and share it with other users etc.
Drawbacks: They need to know what is new in stock, what is out of stock, what is on sale, and what is available again.

And there is a another model: Rent the Runway, a subscription-based fashion e-tailer. This is actually a very smart business model since they are more focused on the garments that cost a lot but are only worn occasionally. Let’s say if you were about to go to a wedding, a very fancy event or if you just want to try an item for a few days before deciding whether or not to buy it. Why would you pay €300 for a dress that you are only going to wear once?
Drawbacks: Next to shippings and returns that belong to the day-to-day business, they also need to take care of insurance, dry cleaning and assessing wear-and-tear to be reflected in the rental prices.

So these models came into being from a necessity of consumers. Shoppers wanted a better customer experience, shoppers wanted better product recommendations, shoppers wanted more flexible pricing plans, shoppers want to shop on their mobile phone but without having to use a browser or to download 20 apps from 20 different retailers.

But what about online communities? This is where Seezona comes in. The Swedish start up has introduced a new platform that is very similar to Lyst or Farfetch but it is taking it all a step further. First of all, it enables visual recommendations. Say you really like this dress that you have seen on Instagram. You can upload the picture and the visual search engine finds items that are visually similar to your item. Moreover, the platform is really strong in building an online community for shoppers. Some of you might have seen some of these before: Moodboards.

Screen Shot 2016-03-03 at 6.04.31 PM

And these are a great tool for bloggers to promote certain items of their partners or just to create some inspirational boards for a theme. Seezona makes it possible for all users to create their own moodboards and to share, comment and like. Further, they have partnered with some of the biggest fashion bloggers to promote their website and their influence pays off: the platform launched three weeks ago and the queen of fashion blogs, Chiara Ferragni, already has more than 400 followers (sign-ups) on Seezona.



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