Next eyes major expansion as online host for other brands

By

Sandra Halliday

Published
May 10, 2020

Next is reportedly planning to transform its business as it works towards a model that will see it hosting the online operations for numerous other brands. 

The retailer, which currently operates a chain of fashion and homewares stores, as well as its webstore that sells its own and other labels, also recently made a big move to grow its beauty retail operations.

But its plan to act as a host for multiple labels’ branded webstores will see it taking one of the biggest steps outside of its core business model in its history.

The Telegraph reported late on Sunday that Next boss Lord Wolfson has spent the past year “quietly” building a platform to allow the retailer to run other brands’ websites, as well as their back-end ops for a fee.

This would see the company moving into the same ‘white label’ area that online-only specialists such as Yoox Net-A-Porter and Farfetch occupy. Both of those companies currently operate the webstores for multiple designer labels. But some observers have also said it would see Next offering a service similar to that of Shopify. However, Next clearly has a more developed warehousing and logistics operation than Shopify, based on its long history as an e-tailer and, before that, a mail order retailer.

Wolfson told the newspaper: “The website will have their URL, it will look and feel like their website, they will design it, they will have creative control over it, but it will link into all the other elements of our platform in exactly the same way as our own website does. What that means is, not only will we run their website, but we will also do all their warehousing, distribution, returns, call centre work, customer credit, international sites, we will do absolutely everything that is involved with selling to customers.”

The company, which currently see £2bn in sales through its own website, is calling the new service Total Platform and has tested it via the Little Label website for upscale kidswear. It has reportedly signed an unnamed retailer with turnover of around £30 million to the service already.

The report said the firm will get a fixed percentage of sales for all the services it provides.

It’s expected to prove a popular offer post-coronavirus as more retailers realise they need an efficient web operation to boost their survival chances in a very different fashion retail environment. 

However, the service is clearly not guaranteed to succeed and Wolfson himself said that there are no certainties with it. “In five years’ time you may look back and say ‘I remember that Total Platform’ business and it may have come to nothing other than provide one client with a great business,” he said. “On the other hand, it could be one of those ideas that in five years’ time people will look back and go, ‘oh my gosh, that was an important moment’. Everyone was worrying about coronavirus and no one noticed the launch of this service, but this is a ground-breaking operation in the UK that could be important to the group.”

As mentioned, news of the new venture comes just a couple of days after it emerged that Next is moving more heavily into beauty retail. The company will be taking over the beauty hall spaces of five Debenhams branches that the department store retailer is vacating in malls owned by Hammerson. This comes after it found success with the Fabled by Marie Claire online beauty platform that it has acquired from Ocado.

And the company has been extending its licensing business as well, taking on the kidswear license of Ted Baker recently.