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EXCLUSIVE INTERVIEW with GFG : The future of fashion retail in the emerging markets

Global Fashion Group “GFG”, the leading online fashion destination for growth markets,  announced that its Board of Directors has appointed Patrick Schmidt and Christoph Barchewitz as Co-Chief Executive Officers effective 1 February 2018.

The Co-CEOs will be responsible for the overall strategic and operational development of GFG and work closely with the management teams of GFG’s fully-owned regional businesses Dafiti (Latin America), Lamoda (Russia & CIS), Zalora (South East Asia) and THE ICONIC (Australia and New Zealand), as well as minority-owned Namshi (Middle East).

SEE ALSO : Ayala enters e-commerce through Zalora Philippines

Under the new leadership, GFG will continue to expand its position as the leading online fashion destination in its markets, strengthen partnerships with international and local brands and further improve customer experience.

Romain Voog stepped down as CEO of GFG after making significant contributions to the company since his appointment in 2015. “We are grateful to Romain for his contribution to GFG since 2015 resulting in significantly improved financial performance. We look forward to working with him during the transition period and wish him well for his future endeavors,” says GFG’s Chairman Cynthia Gordon.

Romain Voog remained CEO until Patrick Schmidt and Christoph Barchewitz assumed their position on 1 February 2018, and will continue with GFG for a transition period thereafter.

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Source : GFG

Retail in Asia met Romain Voog, Former CEO, Global Fashion Group, just before the announcement, and we asked him to share with our readers what are the success factors for fashion brands in the emerging markets and its view on the future of retail.

RiA : How can fashion brands navigate and achieve success in the complex environments of emerging countries, especially following the latest IMF outlook on expected strong growth in these markets?

Romain : Emerging countries are complex for brand to navigate both offline and online, with limited distribution infrastructure, limited credible online partners to work with and hard to reach customer due to last mile infrastructure complexity and high level of cash on delivery payment.

By working with Global Fashion Group, our brand partners are accessing in one go 24 high growth markets and tapping into the high growth high scale e-commerce distribution channel. That enable them to either kick off or reinforce their own online presence and further reach above and beyond their current offline store reach.

By working with GFG they are guarantied that their brand will get immediate online presence and their brand image will be reinforce, as we have a recognized high service quality and fashion credibility

GFG companies are partners of choice for fashion brands to expand in high potential markets because of our ability to combine insights from both our local and global teams to uncover trends and co-develop strategies which enable our partner brands to connect with consumers and drive sales more effectively.

For example, brands such as Ivy Park of Beyoncé managed to quickly enter all of GFG’s markets, even third and fourth tier cities in the Philippines and Indonesia through Zalora. Fashion favourites such as Topman, Topshop and Abercrombie & Fitch which have physical stores only in larger cities, are now accessing customers in the most remote islands and towns through their partnerships with GFG.

Seeing that the fashion market in emerging economies is worth more than EUR 300 billion today and continues to increase as consumers’ spending power rises, we recognise the growing demand for premium products, which is why our list of partner brands expanding to include even more premium brands such as Calvin Klein, Hugo Boss.

RiA  : How can technology and digitalisation help fashion brands cope with and thrive on the year-end shopping season?

Romain :  Year-end shopping season has always been a busy period for retailers as consumers are on a spending spree around this period buoyed by the festivities and year-end sales. Customer experience is key for repeat purchase, and this is truer with online retailers, hence we need to prepare way ahead to make sure that customer experience is not compromised during the peak periods of the sales.

Preparing for it is part art and part science. It is important to have a structured approach in forecasting. There are a few components to it. One is looking at historical numbers. Extensive review of the data can help us in projecting peaks in the day. It’s also important for us to have a clear understanding of the quality of the deal offered and depth of the inventory. The better the deal the higher the demand. And finally, proper budgeting and marketing effort is key to a successful forecasting.

Accurate forecasting also demands us to coordinate with our IT and Operations team during this peak season. They need to make sure that our website and app will not lag and every step in the fulfilment process is ready for the increase in volume of orders.

We continually invest in the future to develop innovations to constantly provide the best fashion e-commerce experience across our five regional businesses.

For example, our three tech hubs in Berlin, Singapore and Vietnam are responsible for developing technologies that leverage AI for instance in the field of pricing, promotion and mark down, or in the field of product recommendation, to further improve the relevance of cross selling.

RiA : Is there still a role for retail businesses as the world moves towards an increased focus on digital? How can brands use the strengths of online commerce and offline retail to remain relevant and survive in 2018 and beyond?

Romain : At the heart of any retail business is the customer. The shifts we’re seeing now in retail were driven by the changing consumer habits. Though consumers nowadays are more mobile, they wanted options anytime, anywhere. They want to have options, and they still explore multiple platforms. The key to keeping them engage is to offer a new retail model in which we combine different touchpoints and ensure seamless good experience.

In some of our markets, we roll out click and mortar stores where we combine providing consumers the option to have a close look at our products but still purchase their items online, conveniently delivered to their doorstep.

Our partnership with Ayala Group in the Philippines, provides a great model where we see offline and online retailer working together to bring the store of the future to consumers. Constantly pushing the boundaries of retailing, the ZALORA Pop-Up Store is a one-stop digital, fashion, and lifestyle concept store as ZALORA aims to create a social and collaborative space, bringing omni-channel retail to life with these features:

  • CLICK + CONNECT – Beyond one-CLICK quick retail, the Pop-Up store will allow customers to CONNECT with ZALORA and the people behind it. Customers who order online may now collect their purchases at the ZALORA Pop-Up Store, which also serves as a central location for hassle-free order returns and exchanges. To give a more personalized service, ZALORA’s Fashion Consultants also engage with customers as they share expert style advice and walk them through the ZALORA shopping experience;
  • Digital retail showcase for brands – Customers can see, touch and fit a curated selection of apparel and shoes, while still being able to browse the entire online collection using tablets, phones and laptops that will be displayed throughout the space. Orders made at the Pop-Up Store will be delivered straight to the customer’s doorstep, eliminating the hassle of having to carry loads of bags that come with every shopping trip;
  • Like It, Scan It, Buy It – Allows customers to directly add items to their cart or wishlist when they scan the product barcode on the hang tag using their mobile device. Every time a customer saves an item on their ZALORA account, they can get similar style recommendations for a more personalized customer journey
  • Beacon technology – Prompts customers on their mobile devices with exclusive deals as they walk into the store, as well as provides in-store analytics to further enhance personalized services to customers;

In the long term, retail will become all about ‘me’ – it will be all about the personalised experience, from personalised fashion designs and virtual fitting rooms to styling tips and chatbot concierges, all tailored to suit everyone’s style preferences. Ecommerce will become increasingly competitive as players seek to understand and cater to everyone intimately, while still being able to achieve cost efficiencies through scale and cross-border learnings.

SEE ALSO : Retail sector to grow in the Philippines: Zalora catches momentum

RiA : How do you see the relationships between fashion brands and Ecommerce platforms – are they competitors or partners?

Romain : We see fashion brands as partners. GFG collaborates with more than 3,000 international, regional and local brands around the world, in addition to our own private labels.

As mentioned, we work with fashion brands to expand in high potential markets because of our ability to combine insights from both our local and global teams to uncover trends and co-develop strategies which enable our partner brands to connect with consumers and drive sales more effectively, further accelerating their growth in these regions.

For example, brands such as Ivy Park of Beyonce managed to quickly enter all GFG’s markets, even third and fourth tier cities in the Philippines and Indonesia through Zalora. Fashion favourites such as Topman, Topshop and Abercrombie & Fitch which have physical stores only in larger cities, are now accessing customers in the most remote islands and towns through their partnerships with GFG.

GFG’s regional companies – pioneers in their respective markets – also collaborate with regional and local brands to develop a curated range of region and country specific portfolios of brands and product ranges which cater to local fashion trends, preferences, nuances, and seasonality. This includes recognised home-grown brands such as, Colcci on Dafiti (our platform in South America), Lover on THE ICONIC (our platform in Australia and New Zealand), as well as Edge Street on Lamoda (our platform in the Commonwealth of Independent States eg. Russia, Ukraine).

RiA : For GFG, what are some outstanding brands you see that cater to the demands of the consumers in the emerging markets? What is GFG’s / the right approach to determining your brand mix?

Romain :  We offer our customers a mix of local, private label and international brands, international brands is a key driver for us and I would estimate that across the different businesses they account for approximately over 60% of the brand mix.

We collaborate with international brand ranging from the likes of Tommy Hilfiger and Calvin Klein (PVH), Miss Selfridge and Topman (Arcadia Group), Aldo, and Nike, just to name a few. These partnerships allow GFG’s partner brands to immediate entry and access into high-potential emerging markets we have strong presence in, further accelerating their growth in these regions. We also recognize the rising number of middle class in the regions who would like to have access to premium fashion brands, so we started bringing in brands such as Calvin Klein and Hugo Boss.

GFG’s regional companies – pioneers in their respective markets – also collaborate with regional and local brands to develop a curated range of region and country specific portfolios of brands and product ranges which cater to local fashion trends, preferences, nuances, and seasonality. This includes recognised home-grown brands such as Colcci on Dafiti (our platform in South Africa), Lover on THE ICONIC (our platform in Australia and New Zealand), as well as Edge Street on Lamoda (our platform in the Commonwealth of Independent States eg. Russia, Ukraine).

Our regional companies also started creating private labels such as Zalia and Something Borrowed for Zalora (our platform in Asia) from 2013 with in-house design teams and collaborations with local designers, to keep our assortment locally, culturally and aesthetically relevant.

One of our key strategy to maintain our industry leadership, is to harness our ability to constantly forge new brand partnerships which provide customers access to a wider variety of brands and products from around the world, and at the same time, enable our partner brands to easily reach out to more than one billion consumers in 24 markets across five fast-growing regions. GFG’s regional companies engage with more than 10 million active customers worldwide, with high awareness levels of 80% on average – both figures continuing to move upwards over the years since inception in 2011.

SEE ALSO : EXCLUSIVE INTERVIEW with Zalora : partnering with brands to boost brand awareness

Retail in Asia is looking forward to see GFG development, but also where Romain Voog will bring his expertise and knowledge.