Tracking Farfetch [Part 2]: Kering's Exit
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Tracking Farfetch [Part 2]: Kering's Exit
Last week, we wrote about how to use data to monitor Farfetch. This is a follow-up post to see data in action and look closely at the rumors of Kering’s brands exiting Farfetch (new rumors on Farfetch offloading NGG brands also just came out).
Last week’s post:
This is what the situation looked like on the 26th of February, compared to 100 days before:
How to read data:
SKU count: The number of shoppable items on Farfetch aggregated by brand. A negative change means there are fewer products today of that brand than there were 100 days ago
Inventory: Farfetch does not hold inventory, but it displays the inventory that the merchants (boutiques, brands, and retailers) decide to share on Farfetch. When inventory goes down, merchants share less on Farfetch today than 100 days ago. When inventory increases, brands (or merchants) fill their warehouses and make deeper inventory available on the channel.
Countries: Farfetch allows consumers to “fetch” items from boutiques far away (hence “far-fetch”), so countries do not mean that the inventory is in that country. It means the merchant makes the inventory shoppable in that country. A brand might want to restrict the availability of its products in certain regions while still leaving them available in others.
Business interpretation of the chart:
Kering’s brand Gucci is reducing its presence on Farfetch, in line with rumors. It will need to replace sales generated by Farfetch with the direct-to-consumer website.
Other Kering brands are also decreasing, but not (yet) as much. This might be impacted by the share of retail vs wholesale of other brands.
Michael Kors is also lowering exposure, but other brands are more or less stable, if not increasing. Burberry has grown its product availability in China.
With the decrease of Gucci's presence, Farfetch is losing a major anchor brand, which, on the one hand, leaves room for others and, on the other hand, decreases the attractivity of the platform.
How to build this report at home
This is a simple yet effective use of data. If you want to build your own, monitor other brands, or track closely the situation as it evolves, here’s what you can do: Ask the right questions.
Should you do it? If you or one of your clients work for - or have money invested in - Farfetch/competitors of Farfetch/brands selling on Farfetch, you probably should. If not, then reading the news will just suffice.
What to look for? My suggestion is to K.I.S.S. (Keep It Simple, Stupid). We want to see who is jumping ship and who’s staying in. A clear purpose is the best way to extract real value from it.
How much should you invest in this (ROI)? Depends on how much skin in the game you have, but spending as little as possible is always good advice: If Farfetch goes belly up, you won’t need this tool long after. I would recommend spending a maximum of 200/300 EUR per month in data and max 2 hours per week for a member of your team to run this, and you can have your reports in your inbox every Monday by noon (you could automate it way more, according to your needs, but we stick to super basics here).
What to monitor? Stick to the bare minimum: USA, UK, China on a weekly or monthly basis, SKU count, and inventory. That should do the job.
What tools to use? I wish to tell you Excel would be enough, but it’s quite a bit of data and might become bulky to handle. If you have someone on your team who can handle Excel like a pro, give it a try. MS Access, PowerBI, Tableau, or any of those will do the trick even better.
How to do it? It’s easier than it looks:
Download the files every week/month (manually or via API)
Open the files with Excel / MS Access / PowerBI / Tableau or whatever you have (automate with API if you know how)
Create a pivot table with summary statistics: Summarize the inventory by brand and country (sum of units) and count the rows (SKU count).
Save it on a summary Excel, which has only summary data, and make it pretty so you can send it via email.
Delete the files you downloaded: It saves space. Don’t worry, you can always download them again, once purchased they won’t disappear.
I hope this hands-on post was helpful.
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