SilkFred CEO on AI, platforming indies and the waning influence of trends

When Emma Watkinson, together with her friends Kate and Stephen Jackson, set out to start their own fashion e-commerce company in 2011, it was on the premise of both addressing the lack of excitement Watkinson felt towards existing propositions, and the absence of support for small brands attempting to step onto the thorny fashion ladder.

Having previously served as a buyer for other platforms, Watkinson recognised a distinct challenge brands entering the race faced when trying to establish themselves. These larger companies “didn’t have the ecosystem to nurture young, up and coming brands”, she told FashionUnited in an interview, and thus promising start-ups were often unable to garner the reach they truly needed to capture a slice of market share.

It was this understanding on which the foundations of SilkFred were built. While initially starting out with no distinct vision, with the team only focused on creating a “solution that was flexible enough to handle all brands”, SilkFred has now accumulated two million dedicated customers to which they showcase over 600 independent brands.

Some of these names have been with SilkFred from their birth as market stalls to their current status as nationally successful businesses. It is a lifespan akin to that of SilkFred, which first relied on humble beginnings, promoting itself via one-off events like puppy yoga, to since developing into a mature, stable company.

After reflecting on its rise, Watkinson said: “Now, we’re at a really exciting point in our journey where we’re saying: ‘Okay, we’ve learned all these things, we’ve gone through all of this, what do the next five years look like for us?’”

In conversation with FashionUnited, SilkFred CEO Watkinson speaks on the waning relevance of fashion trends in e-commerce, the return of occasionwear and the importance of paying attention to swiftly dominating tech developments.

This has been a choppy year for the industry. What is your view on the current state of the market?

The market has shrunk. Some reports suggest it is set to return to growth next year, but by less than a percentage point. Other reports state that we won’t see 2019 volumes until 2028. There’s still lots of opportunities for businesses to grow their market share, but the market is not growing as fast, which means it’s going to get incredibly competitive. It already is, but in the next year or so, businesses will be facing heavy competition, particularly when customers are feeling the pinch.

What categories have been driving you forward for this year, and were there any particularly strong seasons?

We follow quite a traditional seasonal format, with summer and winter peaks. November is typically our biggest month, which is notable because you don’t have as much time in the winter season to build up momentum, as you do in summer.

In terms of categories, demand still seems to be high for dresses, despite Google data showing that overall searches for dresses have halved since 2022. Womenswear, however, is still the biggest segment within the apparel market, and dresses continue to be the biggest category. The fact that overall demand for dresses has dropped means that looking at new categories where there’s different opportunities is going to be a top priority.

There has been a shift in the post-Covid environment; less people are going to the office, less people are getting dressed up for events. I’m still hopeful that people will get excited about dressing up again next year.

Trends have taken on a new form in recent years, particularly when it comes to microtrends. What trends do you see becoming relevant or staying relevant next year?

The answer is: I have absolutely no idea, and I’ll always be really honest about that. There’s nothing like running an e-commerce business to humble you in what you think people might want. The good thing about the SilkFred ecosystem is that we work with over 600 independent fashion brands selling via our platform, and we learn very quickly what customers are responding to. This is how we then shape our offering.

Each year, SilkFred looks very different from the last. In 2014, we were very “boho”, while in 2016, we took on an ultra feminine proposition. It’s always hard to call what exactly the year is going to bring.

From what I can see from the last year and half: people are gravitating more towards standout styles. It was this way pre-Covid, but it’s taken some time to get back to that.

So are trends even relevant to SilkFred anymore? How important are they in curating collections and selecting brands?

Not very. At SilkFred, we don’t really dictate any trends to our customers. We let them shape the offering. We look at all the signals that the customers are sharing with us, and see if we can amplify it and build on that momentum. We are not a very traditional fashion company. There’s no editorial team that says what is going to be massive. The reality is: nobody knows.

The brands we work with stay close to trends. The ones I see growing, even in the midst of a difficult macro-environment, are really focusing on their product and responding to what customers are looking for.

Everyone references trends in their own way, but if you’re an independent fashion brand that is a “slave” to trends, how are you going to compete with Zara, Asos and Shein? When customers are shopping for very specific trends, they look for the best deal on those products. Whereas when an independent fashion brand develops something that is uniquely their own, there’s more longevity to it. They can also control the pricing of that product if there’s only one, and customers are happy and excited to pay for it because it feels different.

And in the case of microtrends…

Microtrends are fun to talk about on social media, because it’s a good way to grow an online audience. The world is very chaotic, so people like the idea of categorising things into trends because what are we doing if not trying to make sense out of our world? It helps us feel like we’re in more control. Otherwise it can be overwhelming for a consumer.

From that standpoint, it can be interesting to discuss trends from a marketing perspective, but they aren’t as relevant now when it comes to creating a collection and deciding what we want to promote.

When it comes down to the SilkFred customer, who are they and what are they expecting from an e-commerce platform like yourself?

We serve a really broad demographic. I know that we’ve got a bestseller on our hands when I want to wear it, my little sister wants to wear it and my mum wants to wear it.

I think of SilkFred as a discovery platform, first and foremost. People don’t usually come with a fixed idea of what they want, and our range is always evolving. The SilkFred customer is generally looking for styles that are universally flattering, and they tend to come to us for special moments in their life, with a big part of those plans being choosing something to wear.

We also get a lot of customers who might have gone through a big transformational shift, and have maybe lost their confidence as a result. A lot of what you get on the high street, because it references trends so strongly, can feel quite alienating to older customers. Cut out details and low waistbands, for example, are not friends to most women. They are looking for something that will make them feel good.

We build in a lot of styling advice on how to wear something, which helps customers build confidence, particularly as women go through different phases of their life. A big part of my driver for SilkFred was making it fun to get dressed up again. At the end of the day, we are not saving lives, we are selling clothes. We don’t take ourselves too seriously.

How is this then reflected in your brand selection? Can you talk me through this process?

We try to be as objective as possible on the product’s style, because, as I mentioned, who knows what’s going to work? We like to test everything.

When we’re looking at brands, we’re particularly looking at the price point–we want it to be affordable, but not too cheap so as to diminish the quality. Our customers aren’t expecting luxury, but they are anticipating good quality and getting good wear out of a style.

Our specialty is in fashion brands that have ambitions to grow. Whilst it’s our vision to work with anyone who wants to launch and grow a brand, we’re specifically focused on those we believe can get to seven figures within 36 months of working with us. Not everyone that sells fashion products has a desire to achieve that, and that’s absolutely fine for them. We, however, look for people who are going to invest time into building out a supply chain and manufacturing relationships so that they can meet the demand we bring.

We have the tools to work with anyone who wants to bring a product to market, no matter what stage they're in. To get the most out of SilkFred, there already has to be something to work with–even if it’s just a product. As long as there is ambition, they can come to us at a very early point, but we want to invest in that relationship.

Once you have the brand on board, how closely do you work with them? How do you ensure longevity of the relationship?

Interestingly, our top 50 brands have been with us for over seven years, and that says a lot about the kind of relationships we nurture. We develop a way of working with one another alongside our respective teams. We provide them with granular data on what is working, which is a feature they may not get from traditional wholesalers.

We can offer suggestions like: “This product on this returns rate is going to take you 10 years to sell through at the current volume of sales. Maybe don’t bring it back next season, because you are losing money every time you sell one unit.” We have a lot of data points across our platform and we have a way of making sense of them that can really help brands identify opportunities and gaps.

Our customers are also really motivated to shop from small brands as opposed to big, department stores, where they are weighing up your products against various prices or other benchmarks. With us, it’s a well-defined proposition for the customer and brands.

One category you put an emphasis on this year was that of Bridal, for which you established a partnership with Georgie Mitchell. How important is this category for SilkFred?

Weddings are a big category for us. They tie in naturally as we are so closely associated with special moments. There are also a lot of important steps along the way: engagement parties, hen parties, pre-wedding events, honeymoons, the wedding itself.

Georgie is fantastic and very like us–she doesn’t take herself too seriously, she’s straight-talking and pragmatic. She’s been great in bringing her expertise to our offering in terms of helping brides. We’re looking forward to continuing to work with her in the new year.

What do you envision for the bridal category next year? How do you see it evolving trend-wise?

We’re seeing demand for casual, affordable wedding dresses, which is a trend that has been developing for a while. There are also now lots of different types of weddings; from the big fairytale wedding to smaller weddings on the beach. There’s less of a formula for how you should do a wedding now, so the opportunity in bridal has changed as customers look for different options within that category.

Are there any other occasions that have helped to bolster the occasionwear category?

Weddings are the main one, but we do see some demand from prom, which I’m really interested in exploring more of next year. Customers that were shopping with us when we started out are now bringing their kids to us for prom dresses.

The challenge is that they are looking for something they love that is both fun but age appropriate. This is something that I’m really interested in looking at next year.

On a more general note, which e-commerce trends have made an impact this year and you see continuing into the next?

A big one is tech, which is driving all the capabilities of what’s possible. We’re working on initiatives that make fashion discovery faster, while brands that relied heavily on traditional wholesale channels are also looking at diversifying their partnerships.

I also think it would be remiss of me not to mention AI-enabled technology, and what impact that’s having on our industry. It’s moving really fast and I think it’s going to help small brands grow their operations much faster. Before, you may have needed five to ten copywriters. Now, you need one who can do the job of ten. For small companies, that’s interesting.

For bigger teams, they’re going to see routine tasks disappear. If I was asked how to navigate this, I’d say: “Become familiar with it, learn how to use it, and get the most out of it. If there’s anything that you’re doing that is just routine, rinse and repeat, think about how you can be adding value above that, because every business is going to be looking to automate those routine tasks.”

What is one of the ways you have incorporated automation into SilkFred?

We built an AI-enabled personal shopper called FredBot, who we are having a lot of fun with. FredBot essentially looks at what people are browsing on our site, and comes up with suggestions of what they may want to see based on where they are in their journey.

Using AI in this way makes so much sense to me, because we’re a 24-hour business. Providing a personal shopping experience to every person who visits is not possible, so having a feature that feels intuitive and helps people save time is what we wanted to achieve.

That is where there is a lot of opportunity around what tech can do to improve the experiences of brands trying to grow, as well as what it can do to help customers discover things that are more relevant to them faster.

What are your main markets and are there any you are eyeing growth in?

Around 95 percent of our customer base is in the UK. We definitely have ambitions to grow internationally, but we’re still on a journey to get there. Our approach will be very much similar to what we’ve done in the UK–learning what works and looking for ways to scale that. We’ll be analysing customers in different areas, and trying to come up with the best experience possible for them.

Approaching internationalisation is a big challenge for any e-commerce player, particularly when competing with existing local propositions in those territories. That’s a big factor, as is making sure that your brand translates across. I’m really looking forward to having a good crack at that.

What is it that you are most excited about for this coming year?

I’m really excited about the tech work that we’re doing. We’ve always been a tech-enabled fashion company, even when we first started. It was one of the reasons why I wanted to get involved in e-commerce in the first place. I thought it was great how it served customers in terms of being able to meet them where they are, as opposed to sitting in a room following and dictating trend predictions. E-commerce has the power to empower customers to discover what they want and what’s right for them.

As you are currently in the midst of Black Friday prep, what are you anticipating here?

When we first started doing Black Friday, we were one of the first UK companies to make quite a big deal out of it. It was huge. Now, there’s so much in-season discounting, so the last couple of years have been a little more muted across the board for everybody.

This year, however, it feels like people are more in the mood. It’s always hard to call, however. Companies have been discounting since October, so I don’t know if customers may be a bit fatigued with it all.

We want to run a full price model, and don’t run initiatives like promo codes, for example. This is better for the brands we work with to preserve margins and the integrity of our proposition.

A big part of the way we work with technology and brands in terms of data is calculating demand and how much of it there is for a product. With this, we try to avoid situations like overproduction, leaving brands with too much stock which can contribute to heavy discounting. We try to keep that in check as much as possible. The way we think about Black Friday is less about how much stock we have, and more about doing something nice for our customer.