Live Lowdown with Kelly Kowal, Chief Platform Officer at Farfetch
"I would say the biggest learning .... what's helped our business continue to trade and to succeed, would be communication. And I would say ruthless prioritisation... we did immediate scenario planning of base case, worst case, worst case off of that and so we had real action plans that we could put into place. "
We had a chat with Kelly Kowal, Chief Platform Officer at Farfetch about:
- Three trends she is seeing come from business adapting to a world living through a pandemic
- How Farfetch's business model allowed them stay successful during the pandemic, and how they are looking beyond into expansion
- What they have done to keep staff connected and motivated
- The beauty of hindsight and what she would have done differently
- The biggest learning to come from this weird and unique time
Hannah Tovey 0:01
Hi, I am Hannah Tovey, Programme Director of Retail Week Live. And today I'm joined by Kelly Kowal, who is Chief Platform Officer at Farfetch. Hi, Kelly.
Kelly Kowal 0:11
Hello, how are you?
Hannah Tovey 0:13
Good. How you doing?
Kelly Kowal 0:14
Good. Very good. Thank you for having me.
Hannah Tovey 0:17
No, thank you for joining us. I'm gonna jump right in and ask you a COVID related question because obviously, it is the climate we're in. So I wanted to ask you, as COVID becomes the medium term norm, what do you believe will be the long term implications of the virus both on the retail sector as well as Farfetch?
Kelly Kowal 0:46
Yeah, I mean, I think high level I would say with any crisis that you hope some good can come from, the outcome of it. So I really hope this is the catalyst that actually will shift luxury fashion market and retail. I really hope that it disrupts the fashion calendar and the way that we're actually producing and the way that we're taking things to market because I think it really does have some of its challenges. And I really think this will give us a good way to really think about how we're doing things. I think a lot of things have been you know, up for debate, but this is now giving us the time to actually take a step back and think are we doing things in the right way. And maybe putting the customer back at the heart of everything we're doing. So, that's that's sort of macro level.
But I would say three trends that we're really seeing that are emerging and that we are really keeping our eyes on are: online will obviously become increasingly more important. I also think, you know, this new term of "phygital" so physical and digital and omni-channel are much more important. I think the role of the physical store will still be important, but it will change drastically. I mean, I think until, you know, social distancing either relaxes or goes away completely, we really have to think about what we're using these physical physical spaces for. Because they still are incredibly valuable. But at the same time, it's just not the way that we are able to do things anymore.
And I would say the third real trend is the new business models that are popping up. So I think, you know, circular economy is still going to be really important, but probably even more important. And the one thing that we're really seeing too, within these new business models are the way that some of the brands and retailers are working. And, you know, the brands have been talking about going into more of a concession based model online anyways. And I think now this has given them sort of a catalyst to really think about how do we do that. So I do think that brand shifting into e-concessions will be sort of more important as they want to really build their own direct to consumer and have more control over their own brand image, their pricing, things that they're really concerned about today.
So I would say those are probably the trends, I would say that have the long term implications. I think for our business, I would say, we are incredibly fortunate because unlike most other businesses in the luxury fashion industry, our revenues are primarily generated from digital channels. So that really enables us to reach a global customer base across 190 countries where we serve. So that gives us the flexibility when, maybe certain countries or certain regions are maybe not thinking about shopping as much because they have much more important things on their mind. We can really shift that demand to other countries. So I think that puts us in a pretty strong position. I would say the second advantage really is the way that we have our stock positioned. So we have a geo diversified supply, that really means that we've got a network of over 1200 partners representing stock points in 50 plus countries. So what we were experiencing is, you know, when Italy was hit hardest, you know, we were trying to move stock out the Italian boutique partners, to allow them to sell online, but also to really shift around where we could be shipping to meet that global demand. And I think, you know, finally for us too, is we're able to leverage our long standing relationships with our major global logistics providers. So and the reason that these three things, you know, are important to us is it the three trends that we're seeing are all things that we're already working on. So you know, online is obviously really important to us. It's the the crux of our core. We have a whole Store of the Future part of our arm where we go in and we really try and disrupt the way physical retail is happening. And I think that's going to be more important for us. And then again, we already operate mostly on an e-concession model anyways, because we don't handle any stock. So, for us, it's about how do we actually take that product and maybe offer it to department stores or other people who, who can't maybe move to this trend as quickly. So for us, I think we are, we're well positioned. And we're already thinking about those trends because they fit so well into our business model. But now it's just about how do we expand those?
Hannah Tovey 5:28
Yeah, absolutely. Thanks for that, Kelly. And I wanted to move on to talking about your staff and your colleagues. And obviously work from home has lots of challenges. And keeping your workforce connected in a crisis is really important. So I want you to ask what you're doing to engage and to motivate your staff during this time. Are there any tips that you can share with us?
Kelly Kowal 5:57
Yeah, it's I mean, it is difficult. I would say we are a company that has lots of different offices and locations and travel. So being on a series, we use BlueJeans, which is our equivalent of zoom. So being on a series of BlueJeans calls is not abnormal, I would say the thing that people are really missing and craving is just being together. And for us what was really important was really transparent communication. And I would say that the thing that we did that probably has helped the most, is we set up a global Q&A Slack channel. So people were posting questions in, the executive team were answering, you know, throughout the day, just to make sure people felt very connected. And then we implemented a weekly live Q&A with the executive team. So you know, it wasn't every single exec on the call, but it was, you know, we would look to see what types of questions were coming up and be on the call to answer and address some of those. And it gave, I think, a direct connection where they could, they could see us every day or every week. They knew they had a direct line into us, they knew their questions were being answered. That it wasn't that they were at home sort of, in this abyss somewhere not being heard and listened to. So I think it brought back that human connection. And I think that was probably the best thing that we did. And, you know, we learned a lot from it. And I think what we're doing is we are going to keep that as a long standing, you know, form of communication. So we're still doing them every two weeks and plan to do them every every two weeks. Because it's a great way to really connect with the team just about various issues. So I would say that's probably the biggest thing we've done and, and recognise that well-being is incredibly important. So we rolled out a series of programmes to make sure people felt supported. And then also, we do video posts from various senior leaders, you know, once or twice a week as well, just talking about either how the business is going, how they're doing with lockdown. You know, it's some of them are really personal. Some of them are, you know, more business oriented, but just because keeps reminding that there are people on the other side of video conferences.
Hannah Tovey 8:05
And a personal aspect to it as well. I think that makes people feel more connected to their colleagues too. So that's really fab that you're doing that.
Kelly Kowal 8:12
Yeah, it's been really great initiative. And I think the response has been really great. And I think just a fun one that we've done, my team in particular has had a lot of new joiners, which is really hard. Even the new joiners that maybe started in February or March. So, on Fridays, we basically have a big team meeting. You know, it's instead of going to the pub, you know, we have a glass of wine at home or whatever it is, and we do two truths and a lie. So basically just a fun way to get to know people in a very, you know, non committal way. And, you know, I think what we were saying earlier is that, you know, we're sort of over the pub quizzes. So this is a great way to sort of bond in a fun way and get to know someone in a fun way that you would normally if you're just sitting next to them in the office, so I think that was just a fun thing to kind of do.
Hannah Tovey 9:02
That's a great one. Can I steal that one for our team?
Kelly Kowal 9:04
Yes, you can. It's very, it's very fun,
Hannah Tovey 9:07
Because we're definitely sick of quizzes. There's been some amazing examples of companies who have gone above and beyond to support colleagues and customers in this crisis. Who are the companies that are inspiring you the most now and what have you learned from them?
Kelly Kowal 9:28
Oh, it's such a it's such a good question. Such a tough question, I think to single out any one company. But I would say the companies that are really inspiring are the ones who quickly took action to shift either maybe their production to make PPE or masks. Some of the the way that the schools were shifting to online learning and how the communities were responding.
The one that does stick out to me which I thought was just such a, it was a great move when sadly, Net-a-porta's warehouses shut down. And they immediately took their vans. And started to use them for transport for good for other things. And I just thought that was such a great way to say, yes, we're not trading right now really. But we have ample sort of logistics and vans that we can be using to help transport supplies around and I just thought it was a really sort of great way to look at what we could be doing for the world. And, I think those are the stories that I will remember because it is in times like this you do want to see that sort of humanity on the other side of a company.
Hannah Tovey 10:42
Yeah. And that collaboration piece as well. I think it's really important, companies rallying together to serve customers in this weird time.
Kelly Kowal 10:55
Yeah, exactly. Absolutely.
Hannah Tovey 10:58
And so we are four months in now, which sounds absolutely bizarre, but we are locked down. there's been a lot of learnings. With the beauty of hindsight, what would you have done differently?
Kelly Kowal 11:15
It's a really tough one because I think, while four months does sound like a long time. I think we're still just at the beginning of it. I think our hindsight will probably come in a few more months time. I think the one thing that we did that I was particularly proud of is we jumped into action very quickly. We were watching our Chinese colleagues go through this and I think maybe naively, we didn't understand the breadth of what it was going to actually mean. And maybe I was naive because I was more concerned about their well being it was Chinese New Year and I was thinking this is heart wrenching. And I was thinking of the human aspect of it, maybe not necessarily the business aspect of it, but what we started to realise is if this did come in, I mean, we already had plans to how we were going to change our production facility. So, meaning if we couldn't shoot the garments, how could we get these online. So we basically moved to a shift model very early on, before it really even hit Europe. So we were already planning for things. But I think maybe in hindsight, the thing that I would change the most is, we do have amazing products for you know, with my division, which is Farfetch Platform Solutions. But is there a way that we could have helped smaller brands and retailers may be a bit more. So we have a shop floor app - could we have rolled that out quicker to help brands and retailers connect with their consumers while their physical stores were locked? The product necessarily wasn't ready to roll out but in hindsight, it would have been fantastic if we would have been able to, to put that in the hands of all of our boutiques to really help them give just that extra boost of keeping their stores open. Maybe not physically, but digitally.
Hannah Tovey 13:06
Yeah, absolutely. That's a great one. And lastly, Kelly, what would be your biggest learning, your kind of key takeaway from this four months? Even though you have just said, obviously, four months isn't a great deal of time in the grand scheme of things, but what would be the one good thing?
Kelly Kowal 13:22
Yeah, it's funny because it is, when you see for months, it's shocking, like you think, Wow, have we really been doing this for four months? Yeah. But then when you think what's in store ahead of us? I yeah, it's it's a difficult one. I wrestle with that, but the time component.
So I would say the biggest learning, and I'm going to bring it back to what's helped our business continue to trade and to succeed, would be communication. And I would say ruthless prioritisation. So, communication is absolutely key. That transparency, even sometimes the transparency of saying, "this is what our stance is now, but this is government guidance. We will let you know when the stance changes because we're following the guidance". Or sometimes even being as honest as saying, look, we don't have the answer to that right now. But as soon as we do, we will let you know. I think that helps really get confidence at that, you know, we're not turning away from it. We're not, you know, we understand the gravitas, and then the importance, but really just showing that we are we're watching everything, we're planning everything. And I think the prioritisation is really key as well. So we did immediate scenario planning of base case, worst case, worst case off of that. And so we had real action plans that we could put into place. And I think also sharing that with the business as well showed that, you know, we are in this together and we will work through this together, but, again, we're not sitting back and waiting to see what happens. We're prepared for any sort of scenario that we can be faced with as much as you can. Yeah. So I think those would be the two learnings.
Hannah Tovey 15:08
They're great. And that's a fantastic way to end. So thank you so much, Kelly, for joining us. I really appreciate this. Thank you.