- Isabella Griffiths |
London - British boutique e-commerce platform Atterley is one of the world’s fastest growing fashion sites, currently hosting 100 independent stores selling to over 80 countries and counting. Having recently opened a Singapore office, headed by former president of DKNY Jeans International Debra Langley, and a network of offices in Edinburgh, London and Milan, Atterley certainly looks serious about establishing itself as a number one fashion destination on a global scale. What’s more, earlier this month the company secured a multi-million-pound investment from PDS Multinational Group, a global design house and clothing manufacturer dual-headquartered in Hong Kong and London, which is set to accelerate the brand’s growth plans. FashionUnited spoke to Atterley founder and chairman Mike Welch about what the funding will mean for the company and how the site is looking to evolve.
You have just received a multi-million-pound investment from clothing manufacturer PDS. What are the synergies between PDS and Atterley, and why was it a good match?
When I started out and invested in the proposition of Atterley, I was always mindful that at the right time I would want to raise some money besides my own, but it needed to be strategic. What I mean by that is I needed to bring in investors who could add value to our strategy and to our business plan. Because frankly, money is just money. I am going to continue to invest in Atterley personally, but the main driver is to have a partner on board who can really help us step things on. Maybe not necessarily today or tomorrow, but in the mid to long term. And PDS were really the perfect fit for us, mainly because of their huge reach in terms of manufacturing and distribution globally. For me, any retail business needs to have its own brand. Not least for profit margin, but even more so to be able to respond to customer demand and trends as data and insights into our business grow. We now know that at the right time we will be able to respond with our own high-quality fast fashion range that reflects the tastes and trends of our customers.
So your long-term plan is to launch your own Atterley label?
For sure. In my experience, manufacturers don’t do retail very well, and retailers don’t do manufacturing very well, so if you can meet in the middle, you can usually make great marriages. We’re really excited about what we can do and create with PDS. Developing our own label is a mid to long term plan, we’re probably talking the next 24 months or so. What shape or form, or even brand name, that will take, I don’t know yet, but it will be carefully thought out and executed. Whatever we do in that area needs to encompass the boutiques, who are really central to our business model. We’re not about to try and cut the boutiques out, we want to incorporate them into that plan. We want to see the boutiques stock our brand. We want to work with them to develop something that they can get excited about for their customers. We want to support them and use this as a mechanism to build our and their business at the same time.
In the short term, what will the investment also enable you to do?
In terms of the money that has been brought in, a small proportion of this I would imagine will be allocated to own label, but the majority of the investment will be in people. We’ve been running this business on a – I think the trendy expression for it is MVP, a minimal viable product - in terms of the number of people we have in the business and investments we’ve made in marketing and exposure and so on, mainly to prove that we can invest and grow, and that’s been resounding. But for the next phase it’s about making sure we’ve got the right people and expertise in place, so we can scale this. We’ve already made some really exciting appointments in the last couple of weeks, which we will be announcing soon, and that’s the differentiator for me, that’s what makes a business special. So this is going to take up the majority of the investment, and a smaller percentage of it will go towards scaling the recruitment of the boutiques much quicker. I’m going to be moving to Miami for six months next year, and the goal is to develop the Atterley proposition in the US.
Let’s talk about the US, which is your fastest growing market. Is the growth coming from the boutiques that you’re signing up or from the consumer side?
It’s consumers. We’ve got a formula in terms of customer acquisition out there which is working well for us and we’re able to scale that without haemorrhaging cash. But a real focus is on customer acquisition, retention and repeat business to make sure that we have an affordable, economical scaling model. But we need to be there to be able to really push that. So that’s what we’re going to be doing. What US consumers love about the Atterley business is the fact that they can buy from European boutiques. So a real draw for Atterley in the States as well as Asia is the fact that we can effectively give our customers from those parts of the world a virtual walk down that little cobbled street in Milan, Paris or London and they can shop boutiques and ranges that they have just never seen before and a totally different mix of products than they are used to. So we’re going to push on with that and make sure that we are doubling our inventory over the course of the next six months and at the same time also push much harder on the exposure in those markets and up the conversion rates and general sales.
You currently have 100 boutiques signed up. Do you have aggressive growth targets, or are you growing organically?
Yes, we currently have 100 boutiques and another 30 or so in the pipeline. We’ve held back slightly on the recruitment of boutiques until now as we didn’t want to create a log jam. Our technology enables us to onboard our boutiques relatively quickly, but just not quick enough. As of the end of this month, however, we will be able to onboard boutiques four times faster just because we’re going to have more people to do that, and in turn, we’ll be able to recruit customers faster, too. If we push one button, I want to make sure that all the other intersections of the model are also flowing, otherwise you’re just wasting time. In terms of boutiques, it’s my view that we can probably take it to about five or six times the number of boutiques we have now, so to around 500 to 700 boutiques, and be really comfortable on inventory.
What is Atterley’s USP? How do you differentiate yourselves from the likes of Farfetch or Trouva?
We are a boutique fashion destination. Our boutiques are absolutely central to everything we do. Farfetch were initially about boutiques, but they effectively used the boutiques to get to the brands, and now they are doing the majority of their business directly with brands. We are all about the boutiques and our approach is much more affordable for them. In terms of Trouva, they are in a slightly different market to us, they do some fashion, but also a lot of homeware and other product categories, whereas we are going to double down on our fashion. So from a customer’s point of view, Atterley is a discovery, about enjoying an inventory that is just slightly different from the high street and the big retailers. The reality is, we have some of the best buyers from some of the most experienced boutiques across Europe. We want to leverage that. Unlike some of our peers, we don’t want to change and twist it to suit our ends and dictate what they do. We just let them buy freely, and we get the benefit of it.
Farfetch made headlines with its IPO in New York earlier this month. Do you also have plans to float in the future?
Farfetch have set a precedent. I’d be crazy to sit here and say that this wouldn’t be a route for us. But realistically, we probably have another year at least of developing and executing the plan that we’ve got in place. But I think we’ve got the momentum to do something in terms of an event, whether that’s raising a bit more money or an AIM listing. Like I’ve said, Farfetch have set a precedent, and it’s a smart way to raise money and bring in the right sort of investor, and I wouldn’t rule that out at all. I think the next 24 months are going to be really interesting in the space we’re operating in, and we will be in the mix somehow.
What is the feedback from your boutiques? Have they seen business growth trading through your site?
Yes, for sure. We’re finding that it works extremely well for the boutiques. E-commerce is very difficult if you just have one single store and you’re buying one or two pieces in a particular brand or style. By the time you’ve paid for your pay per click campaign to promote your website and three or four or five customers have clicked through to the item, the margins are starting to erode, quite significantly. You’re not going to get the conversion. Managing the online conversion relative to the cost of being online is a really important factor when it comes to having success on the internet. So joining up with us and knowing that we’ll do the heavy lifting for them in terms of the customer acquisition means that they can participate in online without having the cost and running the risk.
In your view, what's the most important upcoming trend in multichannel/ecommerce that is set to change the way we shop - and sell?
I think personalisation is really important. We’ve got a really responsive group of customers - 30 per cent of the business that we’re getting is repeat business, so it’s quite a fast cycle. Our customers are coming back quickly, and that’s given us a lot of data to really start to build a picture of who they are and what they want, so we can be a lot more proactive about the inventory that we have and that they are interested in, and start marketing that to them very very personally. In any online business – or in any business full stop – if you have the data and the tools to do that, it’s a lot more affordable to grow your sales and your conversions. We’re going to be investing a lot of time into making sure that personalisation at Atterley is leading edge.
How would you like to see the business evolving? Do you have an ultimate vision?
Actually no, there isn’t one. In terms of an outcome, if you like, we are very early on in what we see as an opportunity to really consolidate the boutique proposition into an online offer for our customers. And in doing that, there’s tons of different formulas and tools that will allow us to get ourselves to that end. There’s so much momentum that we can build. The options for us down the line are going to be massive. We’re just really excited to – pardon the overused phrase – to be on the journey and trying to enjoy the progress that we’re making and the team that we’re building.
On a closing note, where do you see the future of retail – online or bricks and mortar?
I don’t think you can do online without the physical infrastructure. I see a much more balanced situation between the online and the bricks and mortar. The very best e-commerce businesses bring out some form of physical customer service proposition, and I think that’s really important. We all like to have that experiential element to everything we do. When it comes down to it, the best businesses touch us not just in a digital way, but in a much more experiential way. Look at Amazon and what they are trying to do, reversing into physical infrastructure. That’s a great bellwether for the way things are moving. For us it’s about how we’re going to win and understanding the niche that we are operating in, not just a niche in what type of clothes we sell and what type of customer we serve, but a niche in terms of the quite specific aspects of what makes Atterley different and making sure that we stick to it and don’t dilute that. We can’t be everything to everyone, so let’s be everything to the people who we know will appreciate us.
Photo courtesy of the brand