Is internet the saviour of the high street?

Saturday, 23 March 2013 - 10:16am IST | Agency: Daily Telegraph

Word reaches this desk that Robert Peston is about to embark on a three-part documentary about the history of shopping.

Word reaches this desk that Robert Peston is about to embark on a three-part documentary about the history of shopping. Yes, shopping, until recently derided as the opiate of fluffy airheads, is now commanding the attention of serious (ie, male) reporters. Radio 4 in the UK seems to carry reports on the desolate state of our high streets every other day.

Almost everyone agrees that e-tailing is slaughtering retailing. But what if the internet could help preserve the high street? That's the vision of Jose Neves, a 38-year-old Portuguese geek-meets-chic entrepreneur who set up, a virtual market-place for upmarket boutiques across the world. The idea - that a customer can type in key generic words such as grey trousers, or, more specifically "Stella McCartney white waistcoat" - and instantly access their heart's desire from a small independent retailer in Antwerp, or a large established emporium in Sao Paulo - is an idea of dazzling, why-didn't-anyone-do-this-before simplicity.

The logistics however, are more complex. To service the 240 stores that currently sell on farfetch, the company employs more than 100 people just to work in the 25 photographic studios in Lisbon, Sao Paulo and LA where 80,000 pieces are shot each season. Then there are the eight full-timers who monitor card fraud, the 4 million euros it currently spends annually on shipping and the search engine optimisers that ensure that when you type in "Vanessa Bruno black jackets" the first name that pops up isn't always net-a-porter. There's also a team that monitors stores to check they're sufficiently chichi and that the Alaia and Balenciaga they say they stock isn't four years old.

Although farfetch's swat squad visits boutiques incognito, there's nothing sinister afoot, according to Susanne Tide-Frater, brand and strategy director for farfetch. "We're there to support these shops. Some have a dark, moody and battered aesthetic, others are super-culty - and that's great. We're there to help them understand what's unique about their offer, because there's a lot of sameyness on other e-tailer sites". A competition farfetch ran last year to find the youngest, coolest boutique, awarded the winner, Voo in Berlin, six months free "rent" on the site.

The single uniformity is service. Purchases are dispatched directly from each shop to customers in a farfetch box, inside which is the store's personalised wrapping, with, perhaps, a postcard from the city or a free gift. "What's amazing," says Tide-Frater, "is how much customers care about where their purchase comes from. They really like finding that hard-to-get piece from a small shop in Finland."

"An amazing number of retailers don't have any kind of internet presence," says Neves. "You can set up a site for less than pounds 2,000 but there are a billion of them. How do you get noticed? How do you organise a reliable delivery service if you're a small player? How do you sell to a country like Brazil where consumers are used to paying in instalments and in local currency? Some shops we represent have tried e?tailing and didn't have the resources to make it work. Or they're old family businesses who felt alienated by the whole concept. Or they're just looking for an international client base".

The idea came to Neves during Paris Fashion Week in 2007 when he was wholesaling a brand he'd developed to other retailers. "Dozens of boutique owners had been through our doors and what they were saying was really sobering. Business was bad, they couldn't rely on local custom any more but they didn't have the experience to do e-tailing either. They had amazing taste levels but they were having to play it increasingly safe."

Farfetch's revenues - 130 million euros so far this year - are commission-based from the boutiques. In turn, shops accepted on to farfetch's site increase their annual turnover, on average, says Neves, by 30 per cent.

It seems to be win-win-win, for consumer, retailer and e-tailer. Conde Nast liked the business model so much that it invested more money in farfetch than it has in any other e-commerce venture outside the US. "It's not that publishing isn't viable," says James Bilefield, president of Conde Nast Digital, "but it's clear the future lies in making the experience of reading content and shopping more seamless. We're coming at this from the opposite side of Net-a-porter [the e-tailer now publishes a weekly magazine]".

Unlike other market places such as Amazon, the emphasis at farfetch isn't on driving down prices or competing with bricks-and-mortar stores. On the contrary, retailers have to have a shop to be part of it. Listening to Neves, who was once a boutique owner himself (he launched B Store, a niche shop selling up-and-coming designers on Savile Row in 2001), it's clear that the store is really a love letter to the old?fashioned virtues of independent retailers. If retailers have any sense, they'll write back.

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