Although many major fashion brands now sell through online malls, there is a growing shift towards taking greater direct control of online sales. This leaves the two main online fashion malls Magaseek and Start Today with a major problem. Both are trying to solve this issue by providing consulting and operating services in addition to their portal sites.
Magaseek and Start Today are seeing a new wave of interest from retailers unwilling to set up their own online sales channels. Many of the larger players have been working with Start Today for some time. While Isetan and United Arrows, for example, are looking to expand their directly controlled sites, the majority of apparel brands are still several years behind in e-commerce. As a result, Start Today and Magaseek continue to attract interest from new clients. Both providers are combining inventory systems for shopping portals and sites they run for particular brands.
In December, Magaseek opened the Harukas Style site for Kintetsu Department Store, the sixth retailer to contract with Magaseek to take over the entire running of an online store. Magaseek handles everything on the site, from page production and management through to merchandise selection and inventory control, with a proportion of final sales paid back to Kintetsu. In effect, Magaseek is almost franchising the Harukas brand. The site already sells a whopping 400 brands, predominantly from Kintetsu’s women’s apparel and bag lines, but these also include some not available directly in Kintetsu stores, such as Cross Company’s Earth, Music & Ecology.
Magaseek has added brands from its portal site to the Harukas Style store. This also allows it to unify inventory across different brand sites. Where particular brands prove popular on one site, Magaseek propagates them across its other sites.
Although this new model of spreading inventory systems across multiple shopping sites is not unique, the level of operational control Magaseek has at Harukas Style is perhaps the first of its kind. Start Today and others run the back end and inventory control and fulfilment for many brands, but Magaseek’s involvement in the buying process is unusual. Not all future sites will outsource the same level of operations, but Magaseek and Start Today are both aiming to offer a range of services up to and including setting up and running fashion sales sites in order to maintain their edge.
By September last year, Start Today operated sites for 29 different brands. It too is taking on more operational control over inventory and has a significant say in what should and shouldn’t be sold on any particular site, with the result that out of stock problems are reportedly decreasing. It is also increasing options for made-to-order services by mixing and matching brands across portals and sites.
Both Start Today and Magaseek have set up their own large scale logistics facilities in the past three years, although there remains some resistance in the industry due to high stocking fees, with some vendors preferring to handle final delivery themselves. By offering a wider range of operational services, and reducing inventory costs internally, the two companies are both hoping to encourage more integration from clients. JC
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