DTC’s Daily Digest brings you the latest news on the world’s fastest growing direct-to-consumer brands. In today’s edition: Farfetch acquires New Guards Group; Blue Apron and Jet.com cut ties; and Nike boosts DTC with Celect.
Farfetch acquires New Guards Group
E-commerce retailer Farfetch has confirmed the purchase of Milan-based New Guards Group, acquiring a host of brands such as Off-White, Heron Preston and Palm Angels. The deal, which will give Farfetch 100% of New Guard Group’s shares, is reported to be worth USD$675m (£559m).
This purchase is London-based Farfetch’s first major step into direct fashion engagement, as it currently serves as a web store for third-party brands, as opposed to in-house product. Indeed, Farfetch affirms that this acquisition will add a “’Brand Platform’ layer to the Farfetch platform – extending the company’s proposition upstream by expanding its capabilities to now include design, production and brand development.”
New Guards won’t be entirely swallowed by Farfetch, it seems. Farfetch mentions New Guards’ strong revenue (USD$345m / £286m over the past year) as evidence that the Milanese company needs a partner that will strengthen, not interfere with, its inherent capabilities, presumably allowing the two entities to co-exist going forward.
Blue Apron and Jet.com cut ties
Blue Apron announced that it is terminating its partnership with Walmart-backed Jet.com. The partnership, which began in October of last year, allowed the meal kit company to offer its full slate of items on the e-tailer’s online and mobile platform.
Linda Findley Kozlowski, president & CEO, Blue Apron declared on the company’s Q2 earnings call that she hoped instead to focus on the company’s “core business” of direct-to-consumer sales.
She says “the unit economics are strong in a direct-to-consumer model, avoiding many of the challenges as inventory management and shrinkage. We’ll be wrapping up with our pilot with Jet.com in the coming few weeks. Right now, we need to focus our efforts on our core business, engaging with our customers week-in and week-out on our platforms through our direct-to-consumer service.”
She detailed the ways in which Blue Apron is seeking new customers, noting that the trend of eating fresh food at home continues to spike. This, along with the convenience of meal kits, are advantages for the company.
Nike boosts DTC with Celect
Nike have purchased predictive analytics company Celect to bolster its direct-to-consumer strategy, and help them serve customers personally at a global scale. Celect’s cloud-based platform provides data to help retailers optimise their inventories with hyper-local demand predictions.
By integrating Celect’s technology into Nike’s mobile apps and website, the maker of athletic apparel aims to forecast how and when consumers will buy certain styles. According to CNBC, Nike chose to buy the startup instead of spending several years incubating similar technology in-house.
DTC sales also give Nike quicker insights on consumer demand than orders from retail chains like Foot Locker. Celect’s tech can help Nike boost this strategy by optimising its inventory across channels with hyper-localised demand predictions to ensure customers can find and purchase what they’re most interested in. The acquisition shows that Nike recognises the need to offer personalised experiences and is focused on tech and meeting localised demand to deliver on those experiences.
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