Should Farfetch prioritize exclusive designer collaborations or expand our affordable luxury offerings?

Introduction

The trade-off question at hand is whether Farfetch should prioritize exclusive designer collaborations or expand our affordable luxury offerings. This scenario involves balancing the prestige and exclusivity of high-end designer partnerships with the potential for broader market reach through more accessible luxury products. I'll analyze this trade-off by examining the business context, user impact, technical feasibility, and resource implications.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about Farfetch's current market position. Could you share our current split between high-end designer items and more affordable luxury offerings?

Why it matters: Helps understand the baseline and potential for growth in each segment Expected answer: 70% high-end, 30% affordable luxury Impact on approach: A more balanced split might suggest room for growth in affordable luxury

• Business Context: Based on our recent performance, I'm curious about our revenue growth in each segment. How have sales trends differed between exclusive collaborations and affordable luxury items over the past year?

Why it matters: Indicates which strategy has been driving growth Expected answer: Exclusive collaborations showing higher margins but slower growth Impact on approach: Might suggest a hybrid strategy to balance growth and profitability

• User Impact: Considering our user demographics, I'm wondering about the purchasing behavior of our customer segments. What's the overlap between customers who buy exclusive designer items and those who purchase affordable luxury?

Why it matters: Helps identify potential for cross-selling or cannibalization Expected answer: 20% overlap, with most customers sticking to one category Impact on approach: Low overlap might suggest targeting different user segments with each strategy

• Technical: Given our platform's current capabilities, I'm thinking about the scalability of each option. Are there any significant technical challenges or investments required for expanding either exclusive collaborations or affordable luxury offerings?

Why it matters: Assesses feasibility and potential roadblocks Expected answer: Affordable luxury requires more robust inventory management Impact on approach: Might influence timeline and resource allocation

• Resource: Considering our team structure, I'm curious about our internal capabilities. Do we have dedicated teams for designer relations and mass-market product sourcing, or would we need to build these capabilities?

Why it matters: Determines if we can execute both strategies effectively Expected answer: Strong designer relations team, need to build mass-market sourcing Impact on approach: Might suggest phased approach or strategic hiring