What does the new retail landscape mean for Lyst and the burgeoning ‘fashion tech’ space in general? Chief Partnerships Officer Jenny Cossons discusses personalisation, social commerce and becoming the ‘Spotify of fashion’.
The past year has been one of the most difficult on record for the fashion industry, resulting in insurmountable losses for some of the world’s biggest fashion retail brands.
There have been successes, of course, mostly from ecommerce brands who deftly responded to changing consumer behaviour during the pandemic. Perhaps unsurprisingly, digital commerce has been touted as the main driver of growth for the fashion industry in the next 12 months. McKinsey’s ‘State of Fashion 2021’ report predicts there will be dynamic digital growth in 2021 compared to 2019, ‘with more than 30% online growth in Europe and the US, and over 20% online in the already highly digitised Chinese market.’
For companies like Lyst – a fashion search platform that curates items from thousands of online fashion stores – this growth presents an opportunity. Jenny Cossons, Lyst’s Chief Partnerships Officer, predicts that retail will never be the same again.
“We think there is no going back now with customers… they will continue to retain their newfound digital habits, even once we’ve emerged from Covid-19,” she predicts.
Jenny Cossons, Chief Partnerships Officer, Lyst
Five years worth of evolution in 12 months
“Before [the pandemic], the percentage of fashion sales online barely reached double digits,” Cossons explains. “The move to online has been turbo-charged – we have five years’ worth of evolution compressed into the last 12 months.”
“Over the past year, we have experienced triple-digit new customer growth… we now help 150 million shoppers a year decide what to buy from the largest fashion assortment,” says Cossons.
New cohorts are moving online across many sectors and fashion, despite a tough time for the industry, has been no different. McKinsey’s ‘State of Fashion 2021’ report states that ‘over a period of just eight months, ecommerce’s share of fashion sales nearly doubled from 16% to 29% globally, jumping forward six years’ worth of growth.’
Control, data, and a direct relationship with customers
During the pandemic, some online retailers generated much-needed sales through specific categories, capitalising on the increase in demand for loungewear and activewear, for example. As a shopping platform that aims to create ‘the largest fashion assortment’, Lyst is more focused on scale, with the mission to help customers find both trend-driven fashion items as well as pieces that are suited to their own personal budget and preferences.
Lyst’s is an inventory-free model (i.e. it doesn’t buy stock like other intermediaries such as Net-a-Porter) and it works on an affiliate basis with shoppers often clicking through from Lyst to a retailer website (though Lyst also offers a universal checkout).
Cossons explains the benefits of the model. “This means we work across luxury, contemporary and high street brands and are uniquely positioned to have the most comprehensive assortment… more than eight million items from 12,000 brands and stores,” she says.
Fashion brands advertising on Lyst retain “control, data, and a direct relationship with the customer.” Indeed, the downside of selling via online marketplaces can be the lack of control over customer data.
Cossons suggest that this remains Lyst’s main draw over other platforms, because “partners have full control of their pricing and retain ownership of the customer.” She also says that this makes Lyst a cost-effective option, as retail partners are able to use data to inform and improve strategy for better business results.
Integrating personalisation into the shopper journey
From Stitch Fix to the RealReal, there are many companies now competing in the so-called ‘fashion tech’ space. For Lyst, finding success in this arena is about focusing on the things that matter to online customers the most. Interestingly, Cossons says these things “are broadly similar to bricks-and-mortar retail… Choice, convenience, the best price, entertainment, and a great experience.”
The difference, however, (and the key to creating long-lasting relationships with customers), is the ability for companies like Lyst to integrate personalisation into all these things.
“A successful fashion tech business will create a unique experience by meeting all of these needs that are often only possible in a digital world,” she says. “Unlimited shelf space and data-driven personalisation, for example, lets you create a digital store which is entirely unique to the customer, and their tastes and preferences.”
Relevant communication is also vital. “Push notifications can alert a shopper the second something they’ve been eying comes back in stock or goes on sale. Putting the customer at the centre of the experience is always the key to success.”
Opportunities with apps and social commerce
Cossons hints that the Lyst app will be a big area of focus for the company this year, particularly when it comes to making use of platform data. “[The app] already accounts for a significant proportion of our business, but there’s much more we want to do around discovery and personalisation,” she says.
“To give an example, we’re surfacing data insights from the 150m shoppers who use Lyst each year, to show app users real-time fashion charts of the items trending worldwide.”
With consumers increasingly browsing and buying on social platforms like Instagram and Pinterest, I asked Cossons whether or not she sees the growth of social commerce as a threat. Cossons suggests that, in her eyes, “social networks fulfil different needs for consumers, more around inspiration and connection.” In contrast, she explains, Lyst’s focus is “the decision-making space for someone in a shopping mindset.”
With that said, Cossons does concede that the customer might not necessarily think of social commerce in the same way, especially post-Covid.
“We think this is particularly the case with higher-value purchases that have a longer consideration time… but the lines between inspiration, discovery, and transaction are constantly changing.”
“Above all, we’re excited to be part of this pivotal moment for fashion ecommerce. Even taking into account the pandemic-driven growth, there is still so much more opportunity in the sector.”
Becoming the ‘Spotify of fashion’
With many more customers now buying fashion online, Cossons explains how fashion technology might shape the retail sector going forward.
“Managing returns is a hot topic among the brands and stores on the Lyst platform. Finding the balance between making the experience as hassle-free as possible for the customer, while trying to minimise returns overall, and their associated costs.”
Taking a wider view, Cossons also suggests that technology will be key in helping customers identify the brands that align with their values.
“Sustainability and other important issues are playing a part in consumer buying decisions,” she says. “Models like re-sale and rental are rising…. the future of fashion is constantly innovating and we take pride in the fact that Lyst is a place where fashion lovers can see it unfold.”
Cossons says that Lyst’s overall aim going forward is to become the ‘Spotify of fashion’. “A platform that gets to know you better from day one,” she explains. Essentially, this means the more that customers use the platform, the more the platform will get to know customers, delivering the fashion that aligns with their tastes and preferences.
With fashion such a competitive industry, data strategy is sure to be a key element of success during the continued growth of ecommerce.