After a $100 million investment and just nine months after its much-hyped introduction, Condé Nast pulled the plug on its first full-fledged e-commerce experiment Style.com. Instead, Condé Nast inked a deal with one if its early investments Farfetch, an algorithmically-driven global marketplace of high-end boutiques experiencing meteoric rise. Effective immediately, the domain style.com will redirect to farfetch.com.
This development points to the inherent challenge that legacy brands face when attempting to build a viable e-commerce business in an increasingly sophisticated and saturated market. McKinsey & Company predicts that e-commerce sales of luxury goods are set to triple within the next 10 years and a fraught magazine industry is attempting to build a new revenue stream by tapping into this market.
For Condé Nast’s return to e-commerce, Farfetch is a partner that makes strategic sense. It was ranked as Gifted in L2’s upcoming 2017 Digital IQ Index: Department Stores and is the world’s top luxury e-commerce destination by traffic, surpassing Net-a-Porter. It has a unique and profitable business model, an extant user base, and a well-developed brand that utilizes rich content to drive to transaction. Condé Nast has cited the fusion of content and commerce a key driver in building a comprehensive digital luxury experience. By partnering with Farfetch, the magazine brand will be able to leverage an e-commerce leader’s technological innovation and fulfillment network and meld it with best-in-class content.
L2’s Fashion: E-Commerce Innovation report found that brands are increasingly incorporating editorialized content onto product pages, in addition to personalization (27%), omnichannel functionality (2%), and cross-selling (80%) to sophisticate the path to purchase. Farfetch hits all these touchpoints, keenly grasping the kind of experience the new luxury consumer craves.
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