“This time last year, we were all still in lockdown. A lot of people were spending a lot of money online, because there was nothing else to do,” Richard Facioni, founder and CEO of the private equity firm, ACTA Capital, told Inside Retail.

“We’re in lockdown again, but it’s just different this time. People don’t have the stimulus. They’re a bit sick of lockdown. It’s a different situation.” 

This can be seen in the “pullback” in traffic to online shopping sites like Surfstitch, which is part of Alquemie Group, ACTA Capital’s investment platform for retail and consumer brands. 

“We’ve seen a pullback in traffic…I think most if not all online retailers have,”  Facioni said. 

As a result, Surfstitch has shifted its focus to improving its conversion rate and increasing its basket size, and one of the key ways it plans to do so is by expanding its offering. 

“The more we’ve got to offer [people], the more likely they are to convert, and the more likely they are to add an extra item to the basket because there’s more for them to choose from,” he said. “That’s where the whole marketplace strategy comes into play.” 

While Surfstitch was already selling some of the brands on its site on a marketplace basis pre-Covid, such as the Boardriders portfolio of surfwear brands, including Quiksilver, Billabong and Roxy, the online retailer plans to ramp this up significantly. 

Just last week, Surfstitch announced that General Pants would begin selling its portfolio of 11 own brands on its site, and Facioni said the retailer is actively seeking new partnerships.

“We’re growing and investing heavily in our marketplace offering and we’re looking for more brands to come on board,”  Facioni said.

As a “coastal lifestyle” retailer, Surfstitch isn’t just selling wetsuits to surfers. It currently offers over 300 brands across men’s, women’s and kids’ fashion, as well as home and wellness, and targets anyone living near the coast, which as Facioni pointed out, is most of the Australian population. Some of the categories where he sees room for growth include sneakers, hiking and camping, urban tech and lifestyle products. 

“You’re never going to see us sell suits and ties,” he said.

The key benefit of the marketplace model for Surfstitch is that it can derive the benefits of a broader offering without having to invest in inventory. 

“Where we invest our capital now is in marketing to those customers and growing our customer base,” he said. 

According to Facioni, Surfstitch’s reach is in the hundreds of thousands. 

For Facioni, an experienced retailer, whose ACTA Capital also co-manages Mosaic Brands’  Millers, Rockmans, Noni B, Rivers, Katies, Autograph, W. Lane, Crossroads and Beme businesses, the rise of online marketplaces reflects a shift from competition towards collaboration in retail. 

“Historically, people were quite protective of their products, brands and customer bases. They still are, but now they’re prepared to work more closely together, and I think marketplaces are an area that is going to continue to boom,” he said.