Pierre-Louis Lacoste, co-founder of Ankorstore: “We want to reinvent the way wholesale is done”
At a mere two years old, Ankorstore is taking Europe by storm. Established by four French industry veterans, Ankorstore is an online B2B-platform that connects brands to retailers across the continent. The premises? A wide offer of brands, greater flexibility for retailers, and carefree processes for brands and retailers alike. Recently, Ankorstore secured a 102 million dollar investment in a round led by Tiger Global and Bain Capital Ventures, and opened a new office in the Netherlands. Apparently, Ankorstore has something the industry has been waiting for. What is it?
FashionUnited speaks to Pierre-Louis Lacoste, co-founder of Ankorstore. Before starting the company, Lacoste had already seen many sides of the industry: he owned a multi-brand retail store for several years, worked as Vice President at activewear brand Lolë and occupied the role of Country Manager at marketplace Etsy. At Etsy, he also worked on a project called Etsy Wholesale, which was finally cancelled because of a refocus on business-to-consumer. “I always thought it was a missed opportunity, but also that I would do a few things differently,” Lacoste said.
Taking things into his own hands, Lacoste connected with Nicolas D’Audiffret and Nicolas Cohen, founders of online marketplace A Little Market, and Mathieu Alengrin, Head of Engineering at Vestiaire Collective. Together, they started Ankorstore.
Could you tell us more about the idea behind Ankorstore?
“I used to have my own multi-brand retail store. I know from experience how difficult it is for retailers to get the right brands into your store. When you finally manage to connect with a brand, it’s difficult to reach an agreement that works for both brand and retailer. It takes time, and there is a lot of burden on the shoulders of retailers. On top of that, there is the competition of the online mass market. The idea behind Ankorstore was to level the playing field, and to invent the way wholesale has been done on the retail side, and on the brand side.”
“In August 2019 we got the first brands on board. From that moment on, things went fairly quickly. Nowadays, there are about one hundred thousand retailers and nine thousand brands from 23 different countries subscribed to the platform. We operate across Europe, our core markets being France, the UK, Germany, The Netherlands, and the Nordic countries, Sweden in particular.”
How exactly does Ankorstore work?
“If you’re a retailer today, you have a hard time reaching the right brands. You don’t always know exactly where to find them, and when you manage to find a brand you like, then you have to agree on a high minimum order of around one thousand euros, pay up front, and ship six months in advance. On the brand side, the same problems exist. It is difficult to develop a brand, locally or internationally, and to find new clients. You usually take care of your main account because that's where you get the majority of your income from, but sometimes the smaller accounts and retailers are neglected a little.”
“What we do at Ankorstore, first of all, is connect retailers to brands. To the brands, we say: ‘Okay brand, you’re joining Ankorstore, here is a new way to deal with retailers. The minimum order is now one hundred euros - not one thousand, or two thousand. But you won’t have to pay for shipping, because we are going to reimburse the shipping costs to you. On top of that, do not worry about when you will get paid by the retailer, because we will pay you up front.’”
“To the retailers, we say: ‘Here are some great brands. We only work with top makers that have the potential to do wholesale, choose whichever ones you want. The minimum order is only one hundred euros. Shipping is free up to three hundred euros. Delivery is usually in forty-eight hours, and never over ten days, so you can be flexible and re-order more often. On top of that, you have thirty to sixty days to pay for your order. In the end, all of this means you can focus on what really matters: your bestsellers, for example, or whatever requires your time.’”
Reimbursing shipping, paying brands up front - that sounds like quite an investment. How does your business model work?
“Brands pay us a commission of twenty percent on every first order with a new retailer through Ankorstore. If there are re-orders from the same retailer, the commission is ten percent. The payments up front are always a certain percentage of the total order, and these are not paid with our working capital, but arranged through a third party. Shipping is also calculated as a percentage of the total order. For shipping, we collaborate with UPS, which works very well.”
“Ultimately, what happens is that one retailer that comes to the platform will see one brand, then another, and then another. This is incremental on the business model, obviously.”
How does Ankorstore work for fashion in particular?
“I’ve worked in the fashion business, and I’ve witnessed the pain and the efforts required from both sides to get things going. On the brand side, you have to get started on a new collection a long time in advance, almost two years. You have to sell it twelve months in advance, when you are not even sure if everything will work out as you hoped, so you always plan for twenty to thirty percent more inventory than is actually sold. Repeat orders, leftover stock… Everything is so complicated. It’s the same for retailers. Ordering in January for next January when you don’t know if your summer is gonna go well... It’s a complete headache.”
“At Ankorstore, we have had successes in fashion, but it is also where we have had the most trouble to expand. It’s not so easy to lower minimum orders, because brands need those to be able to continue working on their next collection. It’s different in that respect from the home and living sector, for example.”
“Since the pandemic hit, people have been managing their cash flows and inventory. I have a strong feeling that in the near future, reducing the production time, to three months or so, will be key. Either that, or brands have to increase the share of carry-over items (less trendy, staple items whose appeal carries over from one season to another, ed.) in their collections, and work on a relation with retailers where they will start with your carry-over because they know that these items will work, and perhaps pick a few new things as well. That’s when you arrive at a healthy relationship, not only in terms of conversations but also in terms of cash flow.”
“This will also help to reduce the space needed for inventory. The amount of square meters dedicated to stockrooms for retailers today… What a waste. So much money is lost because twenty percent of the space that retailers own is dedicated to stock, which is in turn a consequence of having to order six months in advance. The maths just don’t work. Instead, we advise our retailers to decrease the size of their stockrooms and order more often. We will deliver the products in 48 to 72 hours. Retailers need less stockroom and more shelves. A store is a place to sell, not to keep.”
What differentiates Ankorstore from other B2B marketplaces?
“There are a few things. The first is our DNA. We have been going so fast because we know our retailers, thanks to our backgrounds in the business. When we come to a store and explain Ankorstore to a retailer, and they look at us and say, ‘you don’t really know my store, and my daily life is more complicated than you’d think’, we say ‘in fact, we do know - because we did exactly what you're doing’. And that’s how we manage to arrive at the right feature for the right people pretty quickly. The same counts for distributors. I worked with distributors all over Europe, I know their business model, I know their struggles. I know how to talk to them today. We speak their language.”
With so much experience in your pocket, what are things you are surprised about or are still learning?
“At the beginning we assumed we were going to be a tech and product-driven company. But more and more we realise it's not just that. As digitized as we would like this world to be, it will never be fully digitized. People need interaction. Especially retailers, they love interaction. If you go to a trade show today, you don’t go and make big orders right away. Most importantly, you go to meet people. It’s necessary and it’s fun, of course. So we’ve increasingly noticed that these interactions are extremely important. However, we also see that these interactions could be improved. Retailers and brands should not have to fight over prices or quantities. Instead, they should be discussing how to position a brand in the best way possible, for example. That’s a healthier form of interaction.”
“We learn a lot from agents or digital trade shows about questions like, how can we manage those conversations? But also, how can Ankorstore itself be more personal? How can we show that it is not a machine, but that there are people behind it? We want to make sure that every single retailer we work with knows that there is a person behind every aspect of Ankorstore. Support, for example, is extremely important. People need to know that there is someone out there who can help them solve their problems.”
Recently, you received 102 million dollars of funding, said to be invested in IT and marketing. Could you tell us more about your plans?
“In fact, there is more to it than IT and marketing. This fundraising is really allowing us to go deep into the different markets. As for IT, or tech in general, this is mostly centralized, and obviously we need a lot of people to keep this running - but we also need a lot of people ‘on the ground’. So this fundraising will allow us to go from ten to fifty people at our new office in The Netherlands before the end of the year. It's really in order to continue our development geographically, and then strengthen our tech and product teams.”
Are you eyeing any other markets?
“We are in 23 markets in total right now. Our goal is to be the best in the core markets I mentioned, and at the same time, not to forget the other markets, like Spain and Italy. We are getting strong signs that the platform could work really well there, so we launch in those countries and we learn from them. But it is very important for us to focus on what really matters, and what really matters right now are the core countries. So ninety percent of our efforts go into those - we want to make sure that we get them right. Meanwhile, everything we are learning from the other countries will allow us to prioritize correctly in the future.”
Any expansion plans beyond Europe?
“No. Obviously we are always talking about expansion, but it would be a mistake to say we have any plans, because we have so much to do in Europe. We have to make sure that we first get Europe right. Once that’s done, we’ll probably talk about the next step.”
What are your ultimate goals for the future?
“When we launched Ankorstore, we never wanted to be just a solution, or to simply reinvent existing tools. We wanted to be a catalyst of the environment and find new things for this industry to work better. In the near future, want people to say: if you want to build your wholesale business, go to Ankorstore. Because they get it, they understand it, from the beginning to the end. I want people like my mother, who also has a shop, to use Ankorstore. I want her to spend more time doing the things she likes, instead of the things she doesn't need to do.”
“Retailers are passionate people. They start their business because they want to change something, because they want to create an experience. Covid has brought the world many things, one of them being the realisation that we need to support independent retailers. It’s so much fun to shop there, mainly because you get a better experience. You want to order whatever? Go to Amazon and you’ll get your things taken care of. You want something special, from a retailer that knows you since forever and knows exactly what you want? Go to an independent store, because Amazon is not going to give you that. Only a retailer can create that emotion. And we want to facilitate that.”
“Our dream is for retailers to be able to thrive and not have to struggle versus the mass market. The name Ankorstore comes from ‘anchor store’, normally a dominant retail store in a busy shopping area, that is a bit like an empty box, with no philosophy or DNA. But if the next anchor stores are those smaller retailers, we are winning.”