J.Crew uses tech to fuel global e-commerce ambition
U.S. apparel retailer J.Crew this morning expanded its international distribution from 29 to 107 countries, spanning an astounding 41 currencies.
That's quite a jump in a single day for the retailer, known for clothing everyone from Michelle Obama to, well, me. Businesses -- even digital ones -- just don't scale that quickly.
But there's a secret to how J.Crew did it: a partnership, and a whole lotta tech.
With a platform provided by New York-based FiftyOne, J.Crew is bringing its modern prep style to Asia, Australia, Europe, Middle East and South America. That means customers around the globe will be able to purchase the company's entire collection from anywhere at anytime.
While the retailer was too busy to return my phone calls, FiftyOne -- the name is a play on its mantra, "a bridge between 50 states and one world" -- was more than happy to chat.
I spoke with chief strategy officer Kris Green, who said that his company's tech helps American retailers "fulfill global ambition without having to create new assets around the world" -- assets meaning distribution centers and brick-and-mortar stores.
Specifically, that means converting U.S. prices into local currencies, calculating duty and taxes, managing payment, protecting against fraud and fulfilling orders, via FiftyOne's distribution center in Columbus, Ohio.
The idea is to help a largely American Web site appear international, he said. (Clients are a who's who of suburban American favorites, from Cabela's to Pottery Barn to Under Armour.)
"To do international by yourself, you need to place bets on what countries you think have the biggest opportunities for your brand, and spend significant dollars setting up shop there," he said. "We help retailers avoid needing to make those bets upfront."
Traditionally, retailers have to attack new countries sequentially. FiftyOne's platform allowed J.Crew -- a very fashionable American brand among several different demographics -- to open the floodgates immediately, without leaving American shores.
"Generally, U.S. retailers and brands are receiving global awareness whether they like it or not. And they're also operating businesses in this country that are reaching a super-saturation point in this country," he said. "Internationally, it's growing at a much faster rate. Retailers are looking at their web traffic and seeing 10, 20, 30 percent traffic from international. The business case from monetizing the latent demand is compelling."
He added: "If you operate brick-and-mortar stores, e-commerce is a good way to test markets before you make brick-and-mortar investments."
Green, who hails from Canada, used his homeland as an example.
"They've been conditioned to be excluded from U.S. e-commerce for decades," he said. "When they see any price with a dollar sign in front of it [online], that's probably a U.S. price. When retailers make Canadians and others feel welcome, it can have a significant influence on conversion."
It's also a safer, more conservative way to expand. By partnering with FiftyOne, J.Crew can keep its focus on its lucrative U.S. sales.
The Wall Street Journal's Dana Mattioli touched on the topic Thursday morning: "The move marks a sea change for the brand and its CEO [Mickey Drexler], who previously had called overseas expansion a 'distraction' from domestic operations."
"It always makes sense to partner, because no matter how big your international business gets, it will always be a fraction of your domestic one," Green said. "So it makes sense, even at really big numbers." Even when fulfillment is localized -- because after all, you wouldn't want to fly a cardigan sweater halfway around the world if you could help it.
For J.Crew, it's a chance to bring its collection of turquoise ballet flats and faded oxford shirts to the growing overseas middle class.
For FiftyOne, it's another bridge to build.
This story was originally published as "J.Crew opens door to global e-commerce; uses tech to fuel ambition" at ZDNet's Between the Lines.