This week, a look at the strategies of shopping platforms including Farfetch and Cake, with a focus on how they’re using exclusivity and perks to drive engagement.
After nearly collapsing in 2022, the online luxury marketplace Farfetch is slowly working its way back to relevance under new management.
When it was acquired by the South Korean e-commerce giant Coupang in late 2023, many commenters noted that the primarily mass-market Coupang was an odd fit with Farfetch’s luxury pedigree. But two years later, Farfetch has shed some of the subsidiary companies like Wannaby and Violet Grey that had been weighing down its finances. While its sales last year were down compared to its 2021 peak before the acquisition, Farfetch has been narrowing its profitability gap, with losses of only $34 million last year, compared to $1.7 billion in revenue.
And despite the tumult, Farfetch has continued to wrangle big names in luxury. At the end of September, Farfetch rolled out an exclusive product collaboration with Dolce & Gabbana, with over 200 pieces ranging from dresses to boots not available anywhere else.
Farfetch’s head of merchandising, Doralice Belli, told Glossy that exclusives like this are a key part of the new vision of Farfetch as it reestablishes its place in the fashion industry. It has recently launched other exclusives, like a collaboration between the Japanese streetwear brand Bape and Farfetch subsidiary Stadium Goods.
“Customers value Farfetch for one clear reason: They can discover those truly unique pieces that speak directly to their individual style, which they simply won’t find anywhere else,” Belli said in an email. “Our exclusive offerings are a powerful statement of trust from our longstanding brand partners and a strong endorsement of our ability to provide them with the most relevant global showcase.”
Exclusivity is quickly emerging as a go-to strategy for online fashion retailers and shopping platforms as they seek to lure in both brands and customers. As U.S. customers’ purchasing power is under pressure from tariffs, both brands and retailers are looking for any competitive edge they can take. That goes for both established players like Farfetch, as well as new platforms like Cake.
Cake, which launched about a year ago, is the brainchild of co-founders Estelle Palandjian, Ben Fischman and Dave McLaughlin. It’s a members-only shopping platform where customers pay an annual $100 fee in exchange for gaining early access to new collections by big fashion brands, along with a variety of other perks. Cake has already onboarded over 100 brands, many in the advanced contemporary space, including Alice + Olivia, Larroudé, Staud, Veronica Beard, Patbo and La Ligne. It has raised $5 million in funding.
“Every business, no matter the size, has the same problem right now,” McLaughlin said. “The customer has infinite choice with no switching costs.“
In other words, when the same product is available from multiple channels, customers can easily switch to shop elsewhere without any incentive to stay.
Cake has been able to bring in a large number of brands because the brands don’t actually have to pay to participate; they must only offer perks like early-access sales, product exclusives and members-only events — the jewelry brand Rosie Assoulin hosted an exclusive event for Cake members in May, for example. McLaughlin said around 87% of brands using Cake are seeing higher average order values from members, and there have been $3 million in sales through Cake so far this year.
McLaughlin compared the model to a Costco membership. Once customers have paid the $100 price to access the perks, they’re more likely to shop the brands offered through the club. Others in the fashion retail space may follow suit. Frasers Group is reportedly planning to relaunch MatchesFashion with a similar members-only exclusive model. Mytheresa, meanwhile, has continued to release exclusive collections with the likes of Pucci.
For brands, selling exclusives through retailers can be a helpful way to differentiate between different channels or to help strengthen a new part of the business. Earlier this year, Agolde released several exclusives with the menswear-focused online retailer Mr Porter as it sought to expand its men’s business, for example. But there is a potential downside with exclusives. It can put a strain on younger businesses, for example.
“We do a lot of exclusives,” said Devin Grief, the CEO of the swimwear brand Montce. “We’ve done some with Revolve, some with Free People and hopefully starting to do more with Nordstrom soon. They can be a great tool, as long as you also have some exclusive stuff on your own website and store, too.”
Stat of the week
33%: That’s the year-over-year percentage that footwear imports from China have declined in the U.S. in September, primarily due to tariffs. The data comes from the logistics company Descartes, which found that overall imports from China fell by 22% in the same period.
Beyond China, import volumes to the top 10 U.S. ports fell by 8% overall as the Trump administration’s tariffs take hold.
News to know
- Kering CEO Luca de Meo is reportedly holding a meeting to give top managers at the French luxury company a look at its slowing revenues. The meeting is intended to come up with new ideas to bring Kering back to growth as its biggest brand, Gucci, has flagged and its main competitor, LVMH, fared a bit better.
- Vestiaire Collective CEO Max Bittner, who has been at the luxury resale company since 2019, is leaving the company. He will be replaced by CFO Bernard Osta.
- Tod’s is the latest European luxury brand being investigated for labor law violation by Italian authorities. Loro Piana, Valentino, Dior and Giorgio Armani have all been placed under judicial administration while being investigated in the last two years.
Glossy’s fashion coverage
During Fashion Month, luxury doubled down on the 1 percent
Inside Pandora’s growth plans, backed by a new CEO and US momentum
How H&M used a fashion week event to power a 360-degree content strategy
