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Chanel and Farfetch team up to boost the fashion house's tech offering

The Chanel Farfetch deal will see the two companies collaborate on digital innovation: Feng Li/Staff/Getty
The Chanel Farfetch deal will see the two companies collaborate on digital innovation: Feng Li/Staff/Getty

French couture house Chanel has gone over all digital with a minority stake in online retailer Farfetch.

The two companies did not disclose the price of the stake, however, they said it was part of a collaboration to develop digital services.

Bruno Pavlovsky, Chanel’s fashion president, said there will be digital innovations between the two companies going forward. For instance, this could include a smartphone app which allows people to mark their preferences and sizes online before entering a store. This would allow a store’s assistants to then cater to their needs.

In addition, we could see artificial intelligent (AI) chatbots deployed to connect with Chanel's customers.

Pavlovsky told Reuters: “This is about how to enrich our relationship with our customers.”

Technology will boost the store of the future

A tech partnership between Chanel and Farfetch is an interesting one. The London-based retailer has been turning heads in the retail sector and there are rumours it will be going for an initial public offering (IPO) this year.

Last year, China’s second-biggest e-commerce company JD.com invested nearly $400 million into Farfetch.

As well, Farfetch has been vocal in the past about its plans to use technology to advance the retail experience, in its "Store of the Future" concept.

As part of Chanel’s investment in Farfetch, it’s going to be introducing an “augmented retail” element to its French boutiques. This connects the physical and digital elements of the shopping experience together, enabled through technology.

This demonstrates how technology is spreading and adapting through the retail industry. Particularly with the unstoppable rise of e-commerce, brands need to use technology offline to encourage customers to keep coming into stores.

Alastair Harvey, chief solutions officer at Cortexica, a UK-based startup that provides AI solutions to retailers, including John Lewis in the past, said: “Chanel’s deal with Farfetch is indicative of what we are seeing across the industry: retailers are investing in technology – augmented reality, virtual reality, and artificial intelligence – to give customers a more intuitive brand experience. This is all part of their omnichannel strategies, seamlessly bringing together on- and offline retail – think visual search apps that let you scan inventory while you browse in shopping centres.”

Harvey thinks it is likely we’ll see more tech-focused partnerships like this in retail. However, it’s not always easy to get right.

“The deal also underlines the different approaches brands have to these technologies. Off-the-peg AR or AI isn’t enough, bespoke technology is needed to cater to different business and tech strategies – particularly high-end luxury brands like Chanel where customer experience is so essential.

“We fully expect more tie-ups like this throughout the year, with back-end technology now just as important as consumer-facing technology where it has a direct impact on winning business,” he adds.