Monday, 26 June 2017

Glossy Magazine/Hilary Milnes: Farfetch CMO John Veichmanis: ‘Data is the new marketer’s currency’

Glossy

Farfetch CMO John Veichmanis: ‘Data is the new marketer’s currency’

By Hilary Milnes
JUN 26, 2017

   
As Farfetch’s newly appointed chief marketing officer, John Veichmanis is at the helm of a small army of 130 creatives, data scientists, editors and artificial intelligence specialists on the marketing team at the company’s London headquarters.

Veichmanis, formerly the company’s svp of digital marketing, took over the post at the beginning of June from former CMO Stephanie Horton. Now, he’s in charge of guiding Farfetch’s marketing strategy as the company pushes for profitability and preps itself for a forthcoming IPO, which is expected to be valued anywhere from $1.5 billion to $5 billion.

Veichmanis explained his data-driven approach to building brand awareness, the looming threat of Amazon and how the company’s recent $397 million round of funding will help drive market growth.

You didn’t have a background in fashion when you joined Farfetch in 2015. How is that beneficial to your role?
Ultimately, the marketing discipline is becoming increasingly appreciative of technology and how it can enable you to build a richer dialogue with consumers. That’s really important, and that’s what I bring to the party: an ability to build meaningful customer propositions, but then figure out how we can use technology to actually reach the audience and tell stories online more effectively.

Still, the meaning of luxury keeps evolving. How do you approach that sector, specifically?
The challenge for Farfetch is that we want to build a globally recognized brand. But if you want to build a brand in the luxury space, you have to make sure you’re telling your story to the right people, otherwise there’s a tremendous amount of waste. A real focus for us is to use the data on our platform — the rich profiles of visitors and existing customers — to find more customers. We’re using technology to do that. We, in effect, reduce our reach so we can target those who love luxury and fashion, and then increase communication with those people. That’s the role of the modern-day CMO in luxury: not just to use technology to target the right people, but to then build a dialogue and an evolving story over time for inspiration, ideas and then purchases.

Can you get more specific about the technology you’re using?
Over the course of the last two years, we’ve invested around $4 million in our marketing technology platform. It was built in house. On the demand side of the equation, so we’ve invested heavily in marketing technology, as well as artificial intelligence and data science. A quarter of my team is data scientists, so we can understand the data we have, target the right people, make predictions around behavior and preferences, and then feed that into how we tell stories.

Do marketers today have to be data scientists?
Well, I’m definitely not a data scientist. But there’s a huge appreciation of what that team can do and deliver. Data is the new marketer’s currency. Our job is to build meaning around the data to serve our customer more appropriately. That goes back to the basics of what marketing is: understanding consumer preferences. But rather them telling us in words and in surveys, we use our own gathered data to make decisions in real time. Ten years from now, any marketing team at any level will have those capabilities.

Farfetch’s latest round of funding is going to help it concentrate in China. What’s your role when it comes to pushing into a new market?
That comes back to the data, which is in part why we’re excited about the JD.com opportunity, in terms of the scale that they operate at. Many people think we’re going to put Farfetch on JD.com, and that’s absolutely not the case. What we intend to do is leverage their data and technology to find people potentially interested in luxury fashion. We have a complementary approach. Ultimately, when we’re looking at new markets, it’s based on data and test-and-learn. We put activity there in the market and try new things at a rapid timescale to determine our approach. We make decisions based on learning, and we try to learn as quickly as we can.

From your position as a marketer, how much does the threat of Amazon guide your decision making?
I have a degree of admiration, because what they’ve achieved is phenomenal. But I think the most interesting aspect of the industry at the moment is the crossover between the creative industries and the disciplines around technology and data. Go back five years, and many marketing concepts were still based on print or analog. They didn’t leverage the technology capabilities to customize communication. There’s a real desire now to tell more interesting and engaging stories. People are constantly connected, and are looking for constant information. That frequency of use has massively changed. As a brand marketer, you can build a dialog over time in a genuine and personal manner. Brands like Airbnb, for example, are building emotional connections with succinct messages, but using technology to figure out who to show it to and where. Combining the rational and the emotional is really interesting.

Is there pressure to be constantly creating new content, considering people are always connected?
It’s well documented that there’s too much content and lots of noise. It’s something we’re trying to figure out. Our data can tell us when to communicate, but it’s not something we’ve cracked, to be honest. I think many marketers are trying to find their way there.

As Farfetch pushes toward profitability, where does your job come in?
We’re a key driver in that. If you rationalize what we do as a business, brands and boutiques are adding new product all the time, and it’s our job to make sure we have a corresponding level of demand. Marketing is a core capability of a marketplace, and that’s why we don’t go through agencies. Our paid search specialist is in-house, our email marketing is in-house, data scientists work in our office and are employed by Farfetch, because that’s what brands and boutiques are coming to us for. So we spend a large portion of the revenue they give us on driving demand. Ultimately, how efficient we are at acquiring that next customer is really important and shows that we can increase lifetime value over time. If they keep coming back, there’s a huge amount of leverage in adding more profit. Most of the structure is around driving efficiency. We’re not spending money on segments who are unlikely to buy luxury, and that drives a huge amount of profitability into the business.

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