E-tailers vs. Luxury and Fashion Brands’ DTC E-commerce: The Executive Talent Perspective

The recent Business of Fashion article, “The Trouble with Luxury E-commerce”, caught my attention. At first, I thought the article was claiming that all luxury e-com is in trouble, but then I understood that it referred to the challenges luxury e-tailers face, whilst luxury brands, it seems, managed to shake off macroeconomic factors and grew at an estimated 22% over the past year.

The challenges e-tailers face are reported to predominately stem from increasing costs of borrowing, traffic generating advertising, maintaining logistics and technology platforms, the cash needed for securing inventory from A-list brands, and fierce price competition due to instantaneous comparison.

But could executive and leadership talent decisions be a missing link in understanding the different trajectories of the two business models?

Since the beginning of the pandemic, SRI has partnered with fashion brands as they are investing in creating successful e-commerce teams. Gaining independence from the e-tailers, our clients have integrated e-commerce and built their e-com platforms, benefiting from omnichannel capabilities and real time data. They now can focus on taking clientelling to the next level, using AI technologies, advanced data analytics, and other tools that will allow them to predict shopping behaviour and better engage, serve, and retain customers.

The brands at the front of innovation have been raising investment for further and faster innovation, hiring in-house tech teams and building technologies that allow real-time data information sharing and other advancements.

Of course, e-tailers have also invested in talent. Five years ago, fashion e-tailers were some of our largest clients. However, since then, many have invested in building large in-house talent acquisition teams, who are primarily briefed to attract talent from competitor e-tailers, the tech giants and consulting firms, hiring in the image of their founders and start-up teams. There are subtle differences in the types of profiles an e-tailer needs versus how a brand would staff its e-com team. However, it seems that recruiting creative, strategic, and commercial talent from the fashion industry has fallen by the wayside for the e-tailers.

One could argue that turning away from working with executive search firms who continuously track the market and know what leadership profiles drive growth and value in their sector may have led to e-tailers missing the moment in time and the opportunity to build more diverse leadership teams made up of experts from both sides of the fence.

Diversity leads to better decision making and in times when the value of e-tailers is under threat, their leadership teams must build capability across the entire business to survive and thrive.