How to get online? What are the essential things to do? What are the challenges? And, how to do it right? These are some of the urgent questions that serial entrepreneur Andreas Skorski has been answering for brick-and-mortar retailers, especially since the current crisis started. The COVID-19 pandemic is severely affecting brick-and-mortar businesses, especially in the fashion, lifestyle and luxury segments.
“Putting your inventory online isn’t enough – that’s a huge realisation on part of brick-and-mortar businesses in the region,” Skorski points out. “Therein, we are seeing the benefit of being a tech-forward company, through our digital luxury marketplace, The List. And, in these tough times, we are keen to leverage our strength to support other retail businesses in the region – small and big.”
Being a luxury fashion concept, The List is facing the heat currently but is able to offset some of it by leveraging its technology backbone, low overhead costs and a lean business model.
“Looking back, 2019 was a good year for luxury e-commerce businesses like us,” Skorski states. “Globally, the online luxury space was worth $30 billion, while the offline taken together – comprising luxury personal goods – was a $300-billion market in 2019. On our part, we grew our markets to 20, globally. We have enhanced our technology on the supply side, including machine learning capability that can recognise minute details of products. We are making the demand side more exciting and sophisticated. In terms of performance, we grew a couple of 1000% year-over-year. Currently, 90% of the orders placed on The List come through mobile devices. Hence, our tech-forward thinking already brought us huge benefits. Even now, during the current crisis, we are clearly seeing the massive benefits of being digitally enhanced.”
In terms of product categories, interestingly, sneakers – rare and limited collections – are still seeing demand on The List. “That’s probably because these are created by individuals, who under current circumstances are trying to find new ways to make money,” Skorski observes.
On the other hand, luxury fashion and accessories categories are down by 20% on The List. “The regular runway collections have taken a hit, which started in the western markets. The eastern markets, however, have started to pick up with an approximate 30% rise in demand since the past three weeks – ever since China began to show signs of recovery,” he elaborates.
The List offers 1,500 brands from around the world; in the current situation when travel is embargoed in most countries, people are keen to buy unique products on its platform. “Overall, the 2010-20 decade was quite prosperous for luxury e-commerce segment; a trend that is expected to get better this decade,” Skorski opines.
On the demand side, Saudi Arabia is a big market for The List, where the brand seeks to strengthen presence through engaging Arabised content, while adding more last-mile options.
An interesting shift has been the rise of Middle Eastern countries on the supply side. “So far, Europe used to be account for 80% on the supply side. For example, our supply from Italy has been impacted, but we are able to quickly compensate, because we have seen a rise in supply from the Middle Eastern countries – like the UAE and Kuwait,” he adds. “That’s probably because even before the COVID-19 crisis, brick-and-mortar retailer in the Middle East began to feel the need for an attractive e-commerce channel. This need has been heightened even more now, as consumers are getting used to shopping online. Hence, the share of online business within retail will grow faster than predicted, prior to the crisis. But price war will be a challenge, compelling retailers going online to offer added value to consumers.”
“On our part, we are already in conversation with several big and small business in the region – in the electronics, high-end and mass market fashion space – that are either interested to get on to our platform or leverage our technology to develop their online presence. We can bring a full-fledged furniture store online within a week, which can be scaled up later,” Skorski shares.
Elaborating further, he adds, “Our supply chain machine learning technology works with any inventory system, literally in a plug-and-play manner. Think about it, in the luxury e-commerce space, retailers may have to pay up to $100 per product to get great images and product specifications; our technology solves this problem. In addition to preferential rates to develop a meaningful e-commerce presence, we charge a commission on every transaction made – like we do on The List.”
The List isn’t facing any fulfilment disruption as of now, as the global carriers are still working. “In some cases, there might be a slight delay in delivery,” Skorski points out. “On the supply side, we have had to make small changes by focusing on markets like the US and the Middle East as opposed to Italy for the time being.”
On the payment side, The List was already ahead of its time. Back in January 2019, it was the first e-commerce player in the Middle East to launch crypto currency payment. In view of the current situation, The List is offering card payment on delivery. “We will launch more interesting payment options in the near future – such as instalments,” Skorski adds.
Going forward, The List is looking to expand its beauty and health categories. “We will focus on categories that fit into luxury well-being, Skorski adds.
“We are also gearing up to launch something that will disrupt the retail landscape,” he mentions discreetly. “We are planning for a Series A funding round too.”