Marketplaces let brands control distribution

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samuel-adjei Condé Nast recently launched a marketplace for luxury brands, revamping its Style.com site for an eCommerce initiative that it is reportedly backing with $100million. Though a seemingly natural fit for Condé Nast (which owns numerous luxury magazine titles, including Vogue and GQ) the venture is reportedly proving a tough nut to crack, with entrenched competitors including Yoox, Net-A-Porter and Farfetch dominating the market. Though its success remains to be seen, it is one of the most interesting eCommerce stories of the year.

That’s why we’ll be featuring them at this year’s Seamless conference. In the lead-up to the event, Samuel Adjei , Project Manager at Style.com (pictured here), spoke to me about the difficulties brands face in dealing with 3rd-party marketplaces.

(Adjei will be speaking at the Seamless 2017 conference, happening 19 – 20 April in Singapore. For more information, click here.)

Is the luxury eCommerce marketplace market overcrowded? Just how stiff is the competition for Style.com?

If we look at pure ‘marketplaces’, then no, it’s not crowded. If we’re talking about traditional luxury e-tailers (that carry inventory), then yes there is a lot of competition. Consumers care about a good service, and it’s building brand loyalty in the luxury market that is the biggest challenge. Our content-focused platform is completely different to the likes of Farfetch, and it’s what gets customers excited when they visit the site.

Do you think LVMH could ever set up its own competitor to Net-A-Porter or Farfetch?

It’s a tricky one, because LVMH is a beast! Bernard Arnault has his fingers in a number of pies across the luxury and wider eCommerce landscape, so there may be conflict of interest. I recall last year Richemont beckoning LVMH and Kering to join forces and create their own luxury digital platform, we’re still yet to see any action on this.

Given the brand recognition that they have, what would the motivation be for a Dior or Chanel to sell their product through a 3rd-party platform as opposed to setting up their own sites?

Different sites have different customers – you may not purchase a Gucci bag online with the brand directly, but you may purchase the same bag on Style.com. The market reach, the customer interaction and customer journey is different; all of these dependencies allow you to gain (or lose) a customer. A brand like Dior would first need to understand which markets they will service and, from there, which eCommerce platform will serve them best. Once you have put together a strong technology team (and leader), the look and feel needs to reflect the brand identity. Visual design is huge for Style.com because it’s the design, the experience, the functionality that gives a customer the luxury feel they desire and have come to expect.

How does a Chanel or a Dior maintain its brand integrity on platforms such as yours?

We work closely with our brands to gain constant feedback so that their tone of voice and identity is in line with their own website. When we launch campaigns with brands, it’s a two-way project. It’s key for both parties to understand what is and what isn’t realistic, and ensure that both brand identities are present. As we’re part of Condé Nast, brands understand that the group has a long history in maintaining brand integrity, and the same applies to Style.com

That kerfuffle over Wal-Mart selling an unauthorized Cartier ring – how difficult is it for a luxury brand to police where its products get sold?

That’s a difficult one. Legally, it shouldn’t happen at all, but if a re-seller positions itself well, brands are left vulnerable for things like this to happen. It’s a lot harder for this to occur on a specialist marketplace that works with the end-client, but you just don’t know. Alibaba have had a bad time being kicked off the International Anti-Counterfeiting Coalition, and though not the same as what happened with Walmart, the brand’s credibility is decreased in both scenarios.

What’s the long-term implication for luxury brands on 3rd-party platforms: Are they going to have to resign themselves to having less control over distribution?

Not at all. The beauty of a marketplace is that the brand controls the distribution. There are many benefits to brands being present on 3rd party platforms other than the financial aspect – increased brand awareness, new customers etc. Increased awareness for a brand allows them to acquire new customers through a number of channels – social media, direct via their website – so there is a great benefit here. My advice for brands looking to partner with 3rd parties is to look for those that reflect your brand message.

Adjei is set to join more than 200 other e-commerce, retail and payments professionals speaking at Seamless Asia. For more information, download our brochure here, or go right ahead and register here. Our early-bird pricing, giving you 50% off, applies till the 23rd of December.

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