By Marco Wolters
We’re on the cusp of a revolution in fashion retailing. Whether we call it multi-channel or omnichannel, today’s connected environment means every fashion brand is also a retailer. But the real disruptive revolution is yet to start. Mobile driven personalization will be the next big thing. Are you ready?
Unleash the potential of the Connected Consumer
We’ve seen that consumers are ready to embrace the benefits that digital connectivity can bring to their lives – from the smart home to connected cars and smart watches. In fashion, it’s all about smart wear. With leading brand Levi’s working with Google to integrate smart technology into jeans, it won’t be long before being connected 24/7 through your favorite denim will be a reality. Sports brand Under Armour is rapidly transforming from a t-shirt and shoe company to a tech company. It is capitalizing on the trend for self-optimization by continuously using personalized Connected Consumer data as a basis for customer relevant product development.
Our view: The challenge for brands is not to act so fast that they lose the mainstream customer. At the same time, they can’t be too slow or they risk missing out on the next hot trend. In order to address these opposing challenges, we urge brands to think “revolution” but act “evolution” to ensure they bring their customer base with them.
Impulse and experience in fashion
It’s obvious that the shopping experience is an important part of any transaction. That is why some of the more established pure play online retailers have started opening physical stores, and using pop-up shops. It allows them to be available at the point of impulse, which is key to the purchase of prestige jewelry and watches, as well as handbags, shoes and clothing.
Our view: Delivering a premium service is a challenge online, so retailers and brands need to ensure that their digital touchpoints create a feeling of occasion and specialness and trigger a seamless experience connection with in the store. The physical retail environment needs to work even harder and to leave a lasting impression – one that will produce a positive enduring memory until the next personal brand contact.
“Value” and the middle segment
Over the past few years, we’ve seen the middle segment of fashion retailers struggle. Across Europe, mid-priced fashion stores are closing as fast as the new breed of value chains replace them. Their “low price, high value” approach to fashion retail has been hugely disruptive on the high street and in the shopping mall. At one end of the scale, fashion has become disposable – with items priced so low it’s cheaper to throw them away after a couple of wears than dry clean or wash them.
Our view: In this price-sensitive environment, value retailing has become the new middle. Only the big international fashion chains have the scale advantage to leverage a low price positioning combined with high frequency updating of product range as a basis for success.
Personalization on the horizon
In some markets, mobile will unlock the potential of real-time personalization in fashion – a real game-changer. But that’s not (yet) the case for all regions – because by no means all Connected Consumers want to share their information. In Europe, for example, shoppers are more protective of their privacy and are less willing to share their personal data in exchange for customized products or services compared to consumers in Asia. As we’ve seen in other sectors, where consumers can see a genuine benefit for them personally – for instance, saving money or freeing up time – they are more ready to share their information.
Our view: Fashion retailers and brands that can be trusted to guard customers’ personal details, and to deliver a valuable service in return for it, can expect to be rewarded with longer-term loyalty.
Conversion is business-critical
With so many touchpoints for Connected Consumers to come into contact with fashion brands, and more and more players entering the market due to cross-border ecommerce, converting browsers into buyers is key to business success and survival. Today, everyone is competing for the same share of wallet, regardless of what they are promoting. Savvy shoppers aren’t spending more; they are looking to get more for the same amount of money.
Our view: Fashion brands, whether value, mid-market or luxury, need to be relevant at all touchpoints to close that all-important sale.
In summary: A look ahead
There’s no question that fashion retail is experiencing huge change now, and we predict this will continue and even increase in terms of impact. Not all brands or retailers will survive. Whether you are an innovative player with pop-up shops, online pure play, a local hero, or a traditional fashion retail chain, it is vital that you understand how consumers are changing in order to anticipate and prepare for the next season and beyond. We believe this is a market where thinking “revolution” but acting “evolution” holds the key to future business success. Whatever the season, we’ll be here to help our clients make sense of today, and to win tomorrow.