Physical retail is about experiences, digital retail is about sales. So said Tom Chapman, co-ceo of U.K.-based Matchesfashion.com, which operates physical stores and e-commerce. The company four years ago changed its name from Matches to Matchesfashion.com “to unify the brand and show the team that this is the direction we’re driving,” he said. “The [goal] now is to make the physical more digital and the digital more physical.”
That can mean leveraging designer trunk shows and store appearances and live-streaming the events on Facebook. Meanwhile, point-of-sale systems in stores are designed to give consumers a view of the endless aisle of full Matchesfashion.com inventory. Chapman said that 40 percent of the company’s revenue is driven by products not available in stores.
Matchesfashion.com has a full dance card of events, which, according to Chapman, help the brand make a far bigger statement. A pop-up shop in a garage in Seoul last week featured Official Fake, remakes of Vetements items from spring 2015 through fall 2016. The nine-piece capsule, produced in partnership with Matchesfashion.com, included sweatshirts priced at $700 and jeans for $1,000. Chapman said the sweatshirts sold out in an hour.
“A thousand people showed up,” he added. “More importantly, we got 3,000 to 4,000 names” of potential customers.
Matchesfashion.com has a mission of discovering up-and-coming brands. When Vetements launched four seasons ago, the site was one of the first to carry Demna Gvasalia’s collection. “We sold more in a week than one of our top brands,” Chapman said. “We’re proud to have nine of the finalists of the LVMH Prize on the site. We launched their brands. We have a very engaged customer.”
Matchesfashion.com last week also launched a capsule collection of Virgil Abloh’s Off White with a digital trunk show. Chapman said the interplay between large established brands and emerging talent gives Matches an edge. “One of our strong messages is how we can be the best brand partner,” he said. “We make a larger noise in a market. We give brands a point of difference. Large brands are where a large part of the revenue comes from. But people who know luxury fashion talk about options and selection.”
Raey, Matches’ private-label brand for men and women, is all about giving consumers more options. Introduced in 2014, Raey is a re-branding of its previous women’s collection, Freda, now more youthful with minimal and clean designs. “It’s not [designed] around margin and profits,” Chapman said, “it’s around the customer and engagement and acquisition.”
Raey represents only 1.5 to 2 percent of the online assortment, but in stores, it’s 5 percent. “The store is a much smaller, an isolated version,” Chapman said. “We’re telling stories and trying to engage the customer online with products they don’t know through a journey of discovery.”
The luxury retailer has two million weekly visitors to the site, ships to 175 countries and stocks 450 brands. The majority of its business – 75 percent – is done outside the U.K. Average order size is 650 pounds, or $792, but there are customers who spend 50,000 pounds, or $61,000, on the site. About 45 percent of the site’s revenue comes from mobile devices.
Not a fan of the term omnichannel, Chapman believes that getting shoppers to use all touch points, including retail, mobile, desktop, personal shoppers and catalogues, is the holy grail. Those who do boast a retention rate above 90 percent.
“All of our customer care team works next to product, where it’s being photographed. They drive 10 to 12 percent of total revenue when they work with customers and give advice,” Chapman said. “Content is very important. We do videos and show as much detail as we possibly can.”
Men account for 20 percent of shoppers, but that should grow to 30 percent in the next year. Men shop more on desktops than mobile and do most of their shopping outside of working hours. “Men are more brand-loyal,” Chapman said. “The challenge is our return rate, which is 37 percent for women and 15 percent for men. We want customers to buy multiple pieces and feel comfortable enough to return.”
“By point of difference, we’re growing a full-price business and don’t engage in promotional activity,” Chapman said. “We’re very focused on margin and growing that margin. We don’t want to broaden our offer. We have 60,000 products online and don’t want to dumb things down.”
The U.S. by the end of the year will be Matchesfashion.com’s biggest market, posting growth of 90 percent year-over-year, compared with the U.K., where growth during the same period will be 50 percent. Chapman said Matches doesn’t need millions of customers, but rather, very high-value customers.