Much is discussed about the competition between brick and mortar stores and ecommerce, and the need for retailers to be “omnichannel”. But, for Danish company Miinto, this is not a battle. Rather, one can build a bridge between the high street and the Internet.
Miinto is an online marketplace offering apparel from 1,600 brick and mortar boutiques in Scandinavia, the Netherlands, Belgium, Poland and Switzerland. Launched last month, the Swiss website is the latest addition to Miinto’s portfolio.
The idea of bringing real world outlets to the Internet, without actually owning any inventory or retail space, also underpins the success of giant digital businesses such as holiday home rental platform Airbnb and ride-hailing service Uber. Without any stock, Miinto doesn’t face the risk of not being able to sell garments as traditional retailers and etailers do. Chief Executive Officer Konrad Kierklo believes that this will be the golden path to do e-commerce in the future.
“We don’t have a warehouse, we don’t have stock. We believe there is more than enough products in the market and we believe that fashion is coming from those physical retailers,” he said in an interview with FashionUnited.
The prospects of this business model linking tech with fashion couldn’t be more evident considering the initial public offering (IPO) of competitor Farfetch in September. The online luxury marketplace, which works with more than 500 stores worldwide, collected over 885 million US dollars from investors upon its debut at the New York Stock Exchange. At the same time, the risks of stocking the wrong items were once again highlighted by unseasonal warm weather this year. Lasting well into October, higher-than-usual temperatures forced many fashion companies, from Superdry Plc to Zalando SE, to lower their sales forecasts.
In addition, consumers are expected to become more and more prone to shopping online, forcing brick and mortar retailers to either engage in ecommerce or risk becoming irrelevant. By 2022, 36 percent of all fashion items in the world will be sold online, up from 27 percent this year, according to a forecast by market research firm Forrester. Yet, many small and independent retailers struggle to set up their own online shop due to the high costs and/or lack of expertise. That’s when companies like Miinto come handy.
Even though the share of online fashion purchases varies in the countries where Miinto operates, Kierklo says the overall trend towards ecommerce growth is clear. “What will happen in all markets for sure is that customers expect to find offline boutiques online,” he said. “That’s why we’re trying to become a natural choice for a boutique when they open up a retail market or are in a retail market already. Miinto wants to be the concept they need to be part of.“
On Miinto, customers can either visit a boutique page and buy items from there or shop by categories like jackets, select a model and see which local retailer is offering the item. Fashion retailers pay Miinto a monthly fee of 98 euros, as well as a commission of 16 to 20 percent on sales, depending on category and overall revenue. In return, they obtain both their own space on Miinto’s website, and a presence within the product categories pages related to what they sell.
When a customer places an order for a product which is sold by more than one brick and mortar retailer, all shops stocking the item will receive a message and have the chance to take it up. This way, retailers may be able to sell items even before having they are put for sale in the physical store. Additionally, working on Miinto’s platform can keep employees busy during quiet times in the shop, thus increasing their productivity levels.
- Founded 2008 by high school friends Mike Radoor and Konrad Kierklo
- Offices in Copenhagen, Stockholm, Oslo, Zurich, Amsterdam and 50 developers in Warsaw, Poland
- 1,600 boutiques, mainly Scandinavian and Dutch retailers, and some from Belgium, Poland and Switzerland
- Working with more than 200 brands directly which offer product data, more than 100 provide access to warehouses
- Offering more than 250,000 products online
Miinto’s business model is based on commissions, which account for 80 percent of the company’s revenue. Currently, the entire commision income is currently being reinvested into promoting the Miinto brand, which means the company still isn’t turning a profit. However, Kierklo is quick to point out that’s according to plan.
In 2016, the online platform secured more than 20 million euros in funding from Heartland, the investment arm of Danish fashion giant Bestseller. Heartland, which currently owns a stake of more than 50 percent in Miinto, advises the company in business decisions and helps it with daily operations when needed -- a fact which surprises Kierklo. “I hear from them almost daily, even though they have so many investments”, he said.
However, Miinto still has some heavyweight competition to face on its quest to become shoppers’ platform of choice. Farfetch is a direct competitor in the luxury category, while marketplaces such as Atterley, Amazon and Zalando also provide independent retailers from different countries the opportunity to sell their products online. But the level of visibility retailers get varies greatly per platform. Retailers delivering orders for Zalando remain rather invisible to the end consumers, for example.
Data provider for retailers
But Miinto wants to be much more than just the Airbnb of fashion. The company also aims to serve as a data analytics firm, collecting and comparing data about the stock of its network of retailers. Obtaining sales data in order to restock popular items in time is a rather difficult task for many independent retailers.
“When we’re connected with so many brands and boutiques, we actually provide that data to both of them saying ‘dear retailer, these are the top trending products of this brand, if this continues, you need to restock these styles, otherwise you will be out of stock in two weeks time”, explains the CEO.
But that’s not all. Miinto is also providing delivery solutions to the retailers it works with. In Amsterdam, customers living in the city center can choose to receive their order within 80 minutes. The fast delivery option costs 9.95 euros extra and the product can be immediately returned if the customer isn’t satisfied after trying the garment on. Even though not many customers are using the service yet, Kierklo believes that this is what the future of online shopping holds.
“When we founded Miinto, people expected to receive an online order within five days. Now they expect it the day after. It is a marketing gimmick now, but as we see it, this will be the new normal. That’s what we’re preparing ourselves for.”
Contributed: Huw Hughes and Marjorie van Elven
Photo: courtesy of Miinto