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There is little doubt that in recent years the high street is being reshaped by the impact of the growth of e-commerce.
Aurora fashion group, for instance, announced in March 2012 that half of its stores could close due to the fact that 70% of the company’s transactions are now made online.
Successful fashion brands are looking at innovative ways to drive customers into stores and innovative ways of improving the in-store experience through online. Pure players are extending their presence offline with services like click and collect and traditional bricks and mortar are looking at new ways to increase their stock online.
But what makes a fashion brand look better and perform better than their competitors? From a sector broad analysis, fashion brands that are succeeding through an integrated multichannel approach are the ones considering the following aspects:
Wardrobe size tends to increase despite the economic context
It would be reasonable to expect a cut on clothes spending during the last two years due to external events like woes of the global economy. However, according to a number of sources, including the office for national statistics, consumers spent more on clothes in 2011.
Sales increase is happening due to the exponential online growth that we have been witnessing in recent years.
Traditionally the major barrier to growing online fashion sales and the main reason for the increasing number of returns is the inability to physically interact with the products.
Recent advances in technology like virtual fitting rooms and improvements in data collection, are helping shoppers to fully embrace e-commerce and contributing to the steady growth of the market. Solutions like Fits.me promise an improvement in online sales by up to 62% and reduced returns by up to 35%.
Through historic data, retailers know which sizes are selling and can forecast what they could be selling, thereby reducing risk in the business.
Customer centric services help customer decision process
The most important challenges in the fashion offer tend to be related with customer service and logistics - mainly because of the increasing customer expectations.
Flexible customer service systems and a range of reliable and convenient delivery or collection options, offered by companies like Shutl are more important than ever in providing consumers with a shopping experience that will lead them to repeat buying and give recommendations.
The brands offering a multi-way conversation are the ones helping consumers’ decisions
In order to be customer centric, fashion brands are extending their offer between the ‘bricks and the clicks’ in what is normally called the multichannel offer.
According to Google, the buying decision journey has the ‘zero moment of truth’, that happens online in real time, with the consumer taking control of the entire emotional process.
Fundamentally, the big challenge is to provide an operating model that moves away from silos, towards an agile customer centric approach, where the simplicity wins in relation to the usual addition of components and systems.
Entertainment can be enhanced through ‘gamification’ techniques;
Fashion brands can increase sales by enhancing the entertainment factor through ‘gamification’ techniques as Topshop did when it launched online games to get customers more involved with its site and fashion offering.
Among others, the factors that will influence the rise of shopping via networking sites in the future are broadband penetration and smartphone ownership.
Augmented reality and interactive TV’s known as the ‘third wave’ of technologies is set to revolutionise the market in a not too distant future. Consumers will regularly use interactive television to shop and this will represent a big opportunity for brands in the fashion industry through techniques like product placement and social network campaigns.
One of the first examples was given In September 2012 when Burberry launched ‘tweetwalk’, livestreaming its London Fashion Week runway.
The focus is on customers and not on stock and cost saving
There are several stages of integration and analysis before a brand can claim the multichannel badge. An understanding of the customer journey is key along with a good understanding of how the data systems can be integrated because improvements in one channel will have impact in all others.
Mobile is seen as the main connector between the offline and the online world and this is particularly interesting for fashion retailers that are trying to innovate through QR codes and real time stock availability display.
This increased use of mobile can make attribution more difficult to measure. Another point that adds complexity to the customer journey is social media qualitative data measurement.
Social media is an area with big potential for brand advocacy and therefore a big area of interest for fashion brands whose success seems to be highly dependent on popularity and influence on social networks.
In 2011 and 2012 a series of companies went into administration including Peacock group, Jane Norman and La Senza. Among other reasons these companies may have in common the lack of adequate solutions for the multichannel consumer.
What are your predictions for 2013? Are fashion brands performing better this year?