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Chanel Buys Stake in Farfetch for Digital Push
As part of Chanel’s major push for e-commerce, the French luxury label has taken a minority stake in online retailer Farfetch that will help it evolve its digital capabilities.
Only last year Chanel rebelled against the idea of e-commerce, saying it had no plans to make its ready-to-wear collections available online universally anytime soon. It wanted its digital channels to provide editorial and content instead of being used as a major sales channel.
The company has since then, however, realised that to stay ahead in the retail game and to remain relevant amongst tech-savvy younger consumers, it needs a digital presence and a good one at that, to claim a bigger consumer base.
Chanel’s minority stake in Farfetch will help it do just that, by integrating more digital services into its customer experience, like chats to connect the brand’s clients with store assistants, for example.
Rather than sell directly on the Farfetch, the new agreement will see Chanel work with the company to develop digital innovations linked to customer services, according to Chanel’s president Bruno Palovsky.
Some of these innovations could include a smartphone app that can enable shoppers to flag their preferences and sizes online before entering a Chanel store, which would allow assistants to better cater and service their needs.
While Chanel currently does offer digital support to select clients, Palovsky says the plan is to make this more widely available.
Luxury labels around the world are upping up the ante and forging ahead to rise to today’s tech-savvy consumer expectations and e-commerce standards, that many admit has been a slow uptake that is costing them.
Last year, Prada admitted its plunging top line was attributed to being slow to pay attention to its digital channels. The company missed analysts’ net profit forecasts falling well-below, with net income plunging 18% to €$171.6 million in the first half of 2017.
In contrast, its rival Gucci saw sales growth of 43.4% while Louis Vuitton saw a 12% increase in comparable sales for the same period – both these brands are well ahead of Prada in its online presence and expansion.
Farfetch’s online shopping platform links buyers to luxury fashion items from more 700 boutiques worldwide. Farfetch’s other investor includes Chinese online retail giant JD.com, with Burberry recently announcing it was also interested in teaming up with Farfetch.