Which is the best ecommerce business model: Selecting from Curator, Collector or Platform based models
It is not just a wobbly plan you make at the beginning of your business operations. If done right it spells out the undertone of every decision you are going to make for your business, big or small. You are making a plan for the intended customer base, sources of revenue, financing, marketing strategy, pricing. Getting it right at this stage is vital for the success of your business. So how does a fashion e-commerce business choose the correct business model? If you rewind to a few years back an ecommerce business needed to decide on basic choices like choosing between a B2B (Business to business) model or a B2C (Business to the customer) model. However ecommerce has gotten more complicated than that, there is no fixed magic elixir or formula that can guarantee success. Thus more and more independent designers and emerging fashion labels are experimenting with unconventional business models. These business models can work for the designer, luxury or fast fashion clothing.
The psychological triggers that make an online customer make a purchase are too broad to discuss here, but on a very basic level online customers are looking for inspiration to buy a trusted brand, at a reasonable price.
1) The Curation model:
There are thousands sometimes millions of product listings on ecommerce websites. Customers can find it frustrating to sort through each item, which may lead to them leaving your website without making a purchase. How wonderful would it be if customers are given personalized recommendations by experts in the field of fashion? You can hire a professional stylist or a fashion blogger to be a part of your team to curate your products and create fashion inspirations, based on the latest trends for your customers. Although it is not necessary to hire a specialist, the curation model works just as well with curation done by a guest curator or the customer community itself. The curation model is a gold mine of sorts in today’s era of social media, where most customers spend their free time browsing through fashion inspirations on Instagram and Pinterest.
Websites that have adopted and succeeded with the curation model:
Shoedazzle is one such site where customers can discover the major trends in shoes. They have to take a fashion quiz which helps the curators understand their taste and style preferences, based on which recommendations are made.
Shopstyle is curated by the site’s fashion editors where customers don’t just find product recommendations and flash sales but also content on entertainment, fashion, beauty, fitness, and shopping.
2) The Collector Model:
Collectors bring inventory to a platform, the perfect example for this is Ebay. Collectors take care of the sourcing of products, shipping them and offering them for sale for customers to buy. Customers then follow their favorite collectors. Slowly the customers begin to trust collectors, as their confidence begins to rise in their offerings. The collector model is definitely more expensive to adopt if you are an emerging online retailer, but if you are an independent designer you can be one of the collectors for websites which operate on the collectors model.
Websites that have adopted and succeeded with the collector model:
Poshmark has made shopping a social experience. Customers can browse through collectors featured closets and shop them. Sometimes the collectors are also the models for their clothing, thus the customer doesn’t just understand the style they are about to buy but also the size and fit.
3) The used merchandise platform model:
This business model is being adopted widely throughout the world. It works on the simple principle ‘One man’s trash is another man’s treasure’. This business model allows customers to buy and sell clothing. The fashion businesses that adopt this kind of approach, only accept merchandise that is in very good condition. The merchandise is washed and presented in a professional way through photography, which encourages customers to buy, who may have been formerly skeptical about wearing clothes that are second hand.
Websites that have adopted and succeeded with the used merchandise model:
Rebagg is a platform that allows customers to sell their used bags in exchange of cash. The customers don’t need to wait to be paid only if the bag sells, the hassles of selling the customer’s bag is Rebagg’s job.
As a fashion e-commerce brand, you can adopt one or a combination of business models mentioned above. All of them have a lot of potentials as they are all tied closely to the social approach of online shopping, where shopping is not a dull mundane activity but an experience to get inspired.
Deepika is ILFR’s Marketing Expert and oversees various marketing functions, including Brand Positioning, Social Media, Influencer Marketing, and Content Marketing.