Speedy deliveries, growth inside and outside the U.K., and an uptick in the average order value bolstered revenue at Matchesfashion.com 61 percent to 204 million pounds, or $280 million, in fiscal 2016.
The privately owned company — which last year offered the industry’s first, on-demand 90-minute delivery service in London, launched a customized French language site, and delivered 165 tech products aimed at improving the online shopping experience — said EBITDA, or earnings before interest, taxes, depreciation and amortization, increased nearly sixfold to 19 million pounds, or $26 million in the year.
Average order value increased by 14 percent to 511 pounds, or $700, while international sales grew 80 percent and domestic ones were up 45 percent. Online sales at the retailer, which operates five brick-and-mortar stores in London, grew 73 percent. All figures have been converted at average exchange rates for the 12-month period.
Tom Chapman, who cofounded the business 30 years ago with his wife Ruth, said Matchesfashion.com has begun to reap the rewards of recent investments.
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“We have focused on building the foundations — of people, operations and technology — to enable future growth, with a focus on driving an agile business at scale. We are now starting to deliver the return on the investment. In our 30th year, we continue to look to the future of luxury commerce,” said Chapman, whose title is executive co-chairman.
The results come as Matchesfashion.com pushes ahead with innovation in the fields of artificial intelligence and 360-degree technology in a bid to ramp up levels of service and keep shoppers engaged. “This is the one industry that has the lowest Internet penetration, so the opportunity is massive. This is why I think it’s an amazing time for our business and for the industry in general,” said chief executive officer Ulric Jerome.
He pointed out that the personal luxury consumer market had 8 percent Internet penetration in 2016, up from 3 percent in 2012. “I think it will go to 15 percent in 2010-21,” said Jerome, whose philosophy — along with that of the Chapmans — has been to embrace all sales channels and to get them sparking off each other.
Jerome bristles at the word “omnichannel.” He said he and the Chapmans like to describe the business as commerce, plain and simple. “For us, the store is as important as the web. It’s as important as mobile. That’s what we call commerce. Commerce is the opportunity to interact in multiple ways with your customer — and stores are completely part of the mix.”
The company has recently connected its Customer Relationship Management (CRM) systems across web, mobile and the brand’s five brick-and-mortar stores, allowing the retailer to have a full picture of its customers. “The minute someone walks into our store, we have their full history, we know exactly what they want. We created internal apps within the store that enable the sales consultants to see [the data], customers’ preferences for a brand, to trigger push notifications to specific customers for the brands that they like.”
He said some of the Matchesfashion stores are doing nearly 50 percent of their sales on the iPad “because in the store, you’re limited by your physical preference. In a store on average, we present 10 to 15 percent of our inventory, so the store becomes a conceptual space where you can understand the DNA of the brand. On the iPad, we can then expand that DNA and show the entire product offering that we have in our warehouse.”
He added that the brick-and-mortar merchandising also changes frequently — in tune with online merchandising. “Stores then become a lifestyle and experiential environment. That’s the beauty of working with 420 brands. You have the opportunity to be a lot more flexible — and a lot more inspiring — than if you were just one brand.”
Looking ahead, Jerome said the plan — at least for the next two to three years — is to open two customized international sites each year, using the same model as the recently launched one in France. He declined to reveal which market would be next, although Germany is the obvious option, given the size of the market and the country’s appetite for high-end fashion.
He said Matchesfashion already ships to 190 countries. The customized sites — which will all have dedicated customer service teams speaking the local language; fully translated print magazines and content, and a sensitivity to local culture and behavior — should boost sales further.
The company plans to ramp up its digital trunk shows, where customers watch the designer being interviewed, and shop as models show off pieces from capsule collections made exclusively for Matchesfashion. The company hosted 35 such shows last year with brands including J.W. Anderson, Simone Rocha, Roksanda and Zandra Rhodes.
With regard to future innovation, Jerome said Matchesfashion is exploring the vibrant possibilities of 360-degree technology. “We’re working toward operating [a system] that will enable the customer to have a completely fluid experience, multiple 360-degree views of one environment. It could be a store interior, or any customer interaction that happens when we go to meet our customers internationally,” he said.
The Matchesfashion team is also researching artificial intelligence through its sponsorship of New York Fashion Tech Lab’s Accelerator Program. He said AI will have a big impact on the digital fashion business, although it’s still in its early stages. Jerome said AI will eventually be able to sense what’s out of stock and automatically readapt head-to-toe looks on the site to reflect what’s still in the warehouse — and what’s already sold out.
“We need to have the technology that changes the look with products that are in stock. That’s what we’re working on with the women entrepreneurs at NYFTL. It’s an initiative that we’re very keen about and that we’re very happy to participate in. The message that we always give is that more qualitative visibility you give to brands and products, the more everybody benefits,” he said.