Harvey Nichols team up with Farfetch to boost web sales - will it work?Tuesday 20 March 2018
The Harvey Nichols and FarFetch team up is the latest example of retailers partnering up to share a capability set and fits the trend of luxury brands finally doing more than dipping their toes into the ecommerce ocean. However, caution is right because the tide is unforgiving to those not ready for the current.
Partnerships like these offer great promise for the two companies to become greater than the sum of their parts, and while there are other ways to do this (such as grow organically), partnerships can be a fast track.
For this to be a success, the customer proposition needs to become more compelling. In the luxury world that means more experiential and more personalised as well as more convenient.
In this case Harvey Nichols offers Farfetch experience-driven locations with expertise at creating retail theatre, while Farfetch offers Harvey Nichols the expertise of hyper-convenient luxury experience and fast fulfilment to tap into customers' desire for instant gratification. Both expand the other's accessible consumer base; into tourists and pass-by trade for Farfetch and around the UK for Harvey Nichols.
It is easy to imagine how this is a potent combination - those who aren't woo'd instore can have their online shopping basket pre-populated if temptation lingers the next day, and those who want to touch and feel can be upsold into the rest of the outfit.
But dangers lurk - so-called 'legacy' retailers have struggled to transition to a model that treats customers as the channel-agnostic users of their ecosystem that they really are. We have seen that customers are treated well online OR in-store, but can fall through the cracks when they shift channels.
It is easy to create the semblance of omni-channel (iPads in store do not make a 'digital hub' make) but much harder to change the culture of an organisation to support entire customer journeys rather than customer journeys that are entirely within your team's scope.
There are also tantalising distractions from digital, and the desire to be at the cutting edge of innovation - whether that is augmented reality or geo-targeted marketing campaigns - these take board time and energy away from getting the basics right.
In this case, that is setting in motion a culture change that incentivises in-store staff to care about online customer journeys and incentivises online teams to make in-store staff more effective.
If you can do those two things then customers will travel more seamlessly between channels, having the experience they want to have - and the research is unanimous that multichannel customers spend more than single channel customers - see HBR - Omnichannel Retailing Works.
This will be a challenge for both sides; making a cultural change in a large population of workers who are either seasonal or have designed their role to maximise commission will not be easy. Likewise, supporting ecommerce teams to think about in-store needs is another big mindset shift.
It will take drive, focus and creativity, do it well and the prize will be big.