eCommerce as entertainment: investor behind Goop predicts the wild future of retail

Investor Frederic Court’s bets on e-commerce—his London-based Felix Capital has backed Farfetch, Goop, jewelry site Mejuri, among others—are poised to pay off on Cyber Monday and throughout the holiday shopping season as consumers eschew traditional stores during the pandemic. Now Court is turning his attention to the next wave of online retail, which he describes as “e-commerce as entertainment.” He notes that in China and other parts of Asia, hundreds of millions of consumers already buy via streaming e-commerce, a service that’s reminiscent of a digital-only QVC. He shared his predictions with Fast Company.

The following interview has been edited for clarity and brevity.

Fast Company: What are the big trends you’re seeing in e-commerce, and are you seeing simply an acceleration of trends that you had already seen forecast? What’s new?

Frederic Court: This year we’ve seen acceleration on both sides of the marketplace—and acceleration of demand. On the supply side, from fashion brands to beauty brands to local restaurants, there’s a realization that if your customer cannot come to you anymore, you’ve got to go to them. If we had spoken last year, five years ago, or 10 years ago, we would have said the same thing: Every Christmas is going to be bigger [than the last Christmas]. This year is going to be significantly bigger. We don’t know what’s going to be the impact in terms of people being concerned about an [economic] crisis or unemployment. But at the micro-level of our portfolio companies, we saw, across the board, an extraordinary November.

FC: In e-commerce, there are sites like Amazon that are very transactional, brands like Goop that provide information and sell products, and retailers that are trying to recreate the in-store experience. Do you see e-commerce becoming more experiential?

Court: If you look at Amazon, there’s much more storytelling going on. I agree with you that it’s all about frequency and convenience. But there, there are more and more branded stores on Amazon. I recently was looking at some pants from this French brand, and they have a really good online store on Amazon. It is the new High Street.

You’re seeing this emergence of brands that have been content led. So you gave the example of Goop, which [founder and CEO] Gwyneth [Paltrow] would often describes the business as being “contextual commerce.” Really it’s more about commerce than content…a series of branded products in different categories where there is authentic positioning because they’ve been talking about this stuff for a long time and there’s plenty of content to support it.

Consumers want to be inspired. The luxury brands or lifestyle brands in the offline world were doing really well at inspiring people because they were elevating the experience in the store. They added more elevated or dream-like advertising. Louis Vuitton wouldn’t just show just a bag, but talk about traveling, or Hermes going through the art of where they started, with leather equipment for [equestrians]. Now, as people are living their lives digitally and on ever-smaller screens, that need for inspiration isn’t going away. What we are seeing is a new generation of brands that are content led. [They] started by building an audience and built the commerce business on top. That’s really starting in Asia. There’s this Chinese influencer [Austin Li] known for being the Lipstick King in China, selling hundreds of millions of dollars of lipstick. So there is more and more evidence that we see that convergence of content and commerce.

FC: You’ve described this as “e-commerce as entertainment,” which is different than, say, visiting a site because it has a utility or that I’m visiting to do research. Is that correct?

Court: Something I would have done a few years ago was to just go out on a Saturday afternoon and go to stores on Oxford Street in London or it could be Soho in New York, and just watch groups of young women. And they might go from one boutique to another. They might go to Kith and have an ice cream before going to Glossier or Mejuri or Everlane. There’s a social experience, but it is all shopping related.

We’re now seeing the same thing online, young women in Asia, and we see it in London, having lunch or dinner together and on their phones at the same time, and what they’re doing is shopping or having a social shopping experience.

Fast Company: Who will be successful in this new format?

The first thing you need is a great product. That’s absolutely essential. The second skill you need is an ability to tell stories. And you need some operational excellence, but to varying degrees. Because now you have platforms like Shopify or Amazon or Taobao in China, and they will take care of a lot of the hassle. At Farfetch we had to build everything from scratch.

FC: What else are you excited about in 2021?

Court: One thing we’re increasingly bullish about is app-based commerce. If your brand is strong enough that it can command a dedicated space on the [mobile] device, then you have the opportunity to have a one-on-one dialogue with that customer. And then you can learn a lot of things about him or her, and you can communicate on a one-on-one basis offering something special, such as early access to a product.

FC: What are you advising your portfolio companies to do in 2021 based on your thinking about e-commerce?

Court: We are advising every single brand to grow into a profitable growth plan. And we’re also not forgetting about retail. We think retail will come back, to your point about experience. That’s not going to go away. There will be this need for human connection, the physical experience. But it has to be elevated.

Article courtesy of Fast Company here