As a 120-year-old retailer, Freemans has undergone a huge period of transformation in the last few years. Starting as a clothes catalog business, the firm expanded to become a by-mail department store, and has slowly shifted over to the online world. It opened its e-commerce website in 1997, and finally retired its weighty catalog just three years ago, after printing one billion copies over 118 years.
More recently, the digital department store has gone live with its own marketplace, which the company is now doubling down on. Currently, there are 150 brands across fashion, footwear, beauty, technology, home and garden, and Freemans plans to add 120 extra brands next year.
It’s been a steep learning curve for the business over the 18 months since the launch Head of Marketplace at Freemans:
It’s fair to say it had a slow start, not a particularly auspicious start. But then when we got to Q4 last year, it really took off, and that momentum has continued right the way through this year. So we’ve now doubled our ambition as we go into next year in terms of what we think we can deliver.
The retailer is targeting marketplace to be 30% of its mix within the business, which would see it going from pretty much nothing to almost a third, hopefully within the next year to 18 months.
The signs so far from customers are positive, with additions to the marketplace items they actually want. Freemans is a little different from some other marketplaces, as the business wants to ensure there’s a purpose and customer demand for any item it adds, Harrison explains:
It’s not just options for options’ sake, it needs to be thought through. Because we understand it’s effort on everybody’s side.
While the company is still applying ‘good, better, best’ strategies, and still builds range plans into marketplace, some of that can be eradicated. Harrison adds:
Because we’re able to explore brand new categories, because there’s no inventory risk. So there’s an element of, sometimes you don’t know what you don’t know. So sometimes you do end up throwing a lot at the wall and seeing what helps.
AI, of course
Freemans is also starting to use AI, at this stage feeding it the data and letting the tools guide the business on where it thinks the opportunities lie ahead.
The most important piece of data for Freemans is the Gross Merchandise Value (GMV) – not just the GMV, but what’s behind it and driving the numbers. Harrison says:
Is it that we’ve got new ranges that are driving new customers? Is it that we’ve increased a range somewhere that’s just driving better conversion? What is it that’s driving it and how then can we learn for it moving forward?
When Freemans is analyzing those reports, if it wants to find out what sold really well in a particular week, and whether stocks are running low and the velocity is exceeding the supply, this requires a manual process. The business doesn’t have those flags and alerts systemically. Harrison notes:
There’s still a little bit of the human jumping into that. We still have the teams that are looking week to week, day to day, in terms of what’s turning well, what is the customer reacting to, so there’s more we can do. But when we do spot it, we try and chase it down, whether that be looking at other avenues, switching sources, because we’ve got multiple sources, not just marketplace.
When it comes to choosing partners for its marketplace, Freemans first looks at conversion rates. Harrison says:
If we’re sending traffic to something, we need it to convert because traffic ultimately costs money.
The retailer also analyzes fulfillment and cancellation rates, to make sure that partners are servicing customers in the right way for Freemans.
New customer acquisition is another target area for partners. When the business is bringing in new products, it considers how it could utilize them to drive more new customers to the site. And then, if those new customers materialize, the next query is whether they come in and buy once or they repeat buy.
Customer journey
With the rollout of marketplace over the last 18 months, this has brought some complications to the customer journey, especially around returning items. Harrison explains:
Returns is something we’re actively working on within our business. The data is saying, our customer wants the returns journey to be as simple as possible. Obviously, as we’ve gone through this, we’ve brought on more partners, every partner has a slightly nuanced way that they want to have it returned.
Compounding this situation is that customers send items back to Freemans rather than directly to the partner. Harrison says:
Our customers have got a canny way of ultimately doing whatever they want to do. It doesn’t matter what we do, we can send them emails, text messages, we can put labels in boxes. They’ll return it where they want to return it. And that most of the time is back to us.
To counter this, the business is about to update its returns platform in the next couple of weeks, which will introduce a very simple, easy process for customers. Harrison comments:
They go on, it’s in their account, they click on what they want to return. It looks like they’re going to return it to us, but actually we have the ability then to direct it back to the vendor.
But even with the launch of a new returns system, there might still be the odd customer who circumvents it to send items back to Freemans. As Harrison explained:
They’re finding labels from years ago that they’ve just stored in drawers.
