The fashion and apparel industry has been around for centuries and, like many industries, it’s in the midst of a digital shake-up.
It’s one of the largest industries in the world. According to Fashion United data, the fashion and apparel sector is valued at more than $3 trillion—or about 2% of the world’s GDP—and employs about 3.4 billion people across the globe. And that valuation has led to more retailers entering an already-crowded fashion marketplace, each eager for their own slice of the trillion-dollar pie.
What’s more, thanks to improvements in social media, technology and the supply chain, every one of these fashion brands are a lot more accessible to consumers around the world. A Business of Fashion-McKinsey report predicts that more than half of all fashion sales will originate outside of North America and Europe in 2018.
Today’s shoppers want more, and apparel retailers want happy, repeat customers. The good news is that both B2C and B2B retailers can do a lot to not only keep up with the shifting fashion tides, but strut ahead of the competition and enjoy success in the digital-focused future.
For today’s consumers, it’s not enough to have an online store and a social media presence. In fact, when going digital, having a sales and marketing strategy in place is a bare-minimum requirement.
It’s true that traditional marketing channels, such as magazine spreads and television ads, have been supplemented or even replaced by social media. But now even social media is being disrupted: social ads are giving way to influencer marketing, which seeks out online celebrities to promote products to their own fans and friends. The Instagram influencer market, for instance, is already a billion-dollar industry, and Media Kix expects it to grow to $2.38 billion in 2019.
This trend also points to consumers’ shifting roles from passive buyers to active shoppers. People want to influence the brands they interact with, and they care about the social perception of those brands. Since these perceptions often start and are solidified on social media, brands need to ensure their digital reputation is as sterling as possible.
According to a Deloitte article, “a misaligned or generic digital offering may actually widen the digital divide and even pose a threat to brand reputation.” What’s more, this digital experience must seamlessly follow people when they move in-store.
When it comes to going digital in today’s fashion marketplace, the details truly matter. Retailers—both B2C and B2B—need to reimagine the service and experience that they offer to customers. Of course, a well-run eCommerce channel is crucial, especially for B2B retailers.
Nearly half of all B2B buyers are millennials, according to a Google study, and they’re increasingly taking their personal preferences, such as online shopping, to their work. In fact, a Forrester report estimates that, by 2021, B2B eCommerce will reach $1.2 trillion and will account for more than 13% of all B2B sales in the US.
Fashion retailers need to take an extra step when it comes to social media. Like an online shopping platform, a positive social media presence is expected in today’s fashion and apparel environment. Brands that are truly poised to succeed are taking their online promotions a step further by making them interactive and accessible to B2C shoppers and B2B buyers alike.
Burberry, for instance, was the first major brand to livestream its fashion shows, and later released an app enabling shoppers to try on different outfits from the show.
Louis Vuitton also developed an app that encourages people to explore its elaborate store window displays, while Adidas created a show wall that features its apparel collections in 3D.
Retailers also need to ensure that the services they provide customers are robust and effective, both online and in-person—and many are using artificial intelligence (AI) to achieve this. Smart technology is being used for everything from digital customer service representatives and in-store greeters to virtual shopping assistants and chatbot stylists.
Even the simplest systems can have a big impact on business’ bottom lines. Many retailers are using recommendation engines that help shoppers build a wardrobe by curating and suggesting related items for purchase. But it hardly stops there.
AI can be cross-leveraged with augmented reality (AR) to further improve shoppers’ experiences. Both in-store and online shoppers are using AR to virtually try on clothes before purchasing.
In fact, a Retail Perceptions study found that 40% of shoppers would be willing to pay more for a product if they could first experience it through AR, while 61% said they prefer to shop at stores that offer an AR experience. Retailers can then use the data they collect from these interactions to inform the AI tools they use to increase purchases.
It’s not enough to simply go digital. Surviving today’s digital evolution means transforming every aspect of your fashion business to interactively involve customers, from the development of new apparel lines, to the promotion of those products, throughout the entire purchase journey, and even beyond into loyalty programs that ensure repeat patronage.
The fashion and apparel industry is highly competitive. It’s nearly impossible to get an accurate count of the number of global fashion brands—new brands are born every day and, unfortunately, some go the way of the dodo bird.
Last year, more than 1,875 fashion retailers closed their doors for good and, according to Shopify, that number is expected to rise to approximately 10,000 in 2018.
That competition is not only bolstered by its seasonal and style-focused nature, but also by people’s increasingly limited attention span and budget. Fashion retailers must expand and streamline their businesses if they want to survive in this new digital world, and that expansion is dependent on providing the best experience possible for consumers.
The good news is that there’s no shortage of tools to use to provide those experiences.
Diversity is the name of the game when it comes to thriving in the digital fashion industry. Both B2C and B2B retailers need to embrace different ways of selling if they’re going to stay competitive. For B2C retailers, that might mean adding wholesale or B2B sales to your revenue mix; for B2B sellers, that could mean adding an eCommerce channel to better serve B2B buyers.
For both, that certainly means looking to the omnichannel.
According to TechTarget, the omnichannel is a multi-channel approach to sales and marketing that aims to provide customers with a seamless shopping experience, no matter where they shop.
This often involves integration between distribution, promotion and communications channels on the backend, in order to provide a consistent experience for customers, whether they’re shopping in-store, online or over the phone.
Many fashion retailers are already embracing the shift toward the omnichannel experience. Consider UK retailer Oasis: the company has equipped the sales associates in its stores with iPads, enabling them to check inventory on the spot, and even cash out customers. What’s more, if the product isn’t available in-store, these associates can have the product shipped directly to the customer’s home.
Of course, this cross-channel cooperation means it’s even more important for retailers to leverage technology when it comes to their operational processes, like supply chain management or wholesale distribution.
AR, for instance, can help both B2C and B2B retailers control their inventory. Inventory is one of the most complex components of the supply chain, especially for B2B apparel merchants and fashion retailers with revenue in both the wholesale and direct-to-consumer markets. According to Digitalist Magazine, AR can provide more visibility into inventory, ensuring consumer demand is met without creating an unsellable stockpile of inventory. These digital tools can use predictive technology to alert business owners when inventory needs replenishing or when integrated systems need maintenance.
Digitizing and automating other operational processes can also go a long way in helping fashion retailers grow their businesses and expand into new markets. Not only can automation and digitization help save time and money, but it frees up staff time for more meaningful tasks, such as more effective marketing campaigns, the development of new products, or using technology to improve the customer experience.
Consumers are demanding a seamless experience to follow them from social media to online research and in-store or online purchasing. This demand for a positive omnichannel experience is only possible with the right tools in place.
In fact, it’s nearly impossible to maintain a competitive edge in the fashion and apparel industry while running out-of-date technologies and back-office systems. Fashion retailers need to upgrade their operations with a staunch focus on the latest technologies that can improve efficiency, customer service and the bottom line.
They anticipate recommendations based on the things they’ve searched for online and they actively interact with the tools that make this level of personalization possible. According to Business Insider, about 45% of end users prefer chatbots as the primary communications channel for customer service inquiries.
The one-size-fits-all approach to the fashion and apparel industry is rapidly receding. Retailers need to look to the latest digital tools to not only ensure that shoppers have a positive experience both in-store and online, but that those experiences are efficiently produced.
Navigating a highly personalized retail landscape is challenging. Many fashion retailers lack the insights they need to forecast their future and plan the right next steps. Thankfully, there’s an unexpected benefit to the consumer trend to hyper-personalization: big data.
According to Deloitte, the availability of data is drastically changing the way fashion brands are doing everything: from assortment and pricing, to promotions, supply chain and customer experiences.
In fact, digital tools as a source of data are quickly becoming integral to the success of fashion brands. With the data collected by these tools, retailers can better understand their customers and tailor sales and product information to them—effectively delivering an even more personalized experience.
Savvy retailers are extending shoppers’ favorite virtual experiences in stores, offering AR-enabled tools to virtually try on clothes or AI-powered digital shopping assistants. People are increasingly taking advantage of these various technologies that personalize the shopping experience by leveraging vast amounts of data. A Shopify article reported that 75% of consumers prefer brands to not only personalize their messaging, but also personalize offers and experiences—after all, 43% of purchases are influenced by personalized recommendations and promotions.
It’s important for the data that brands collect to be put to use behind the scenes. Brands’ leadership teams should employ big data in key decision-making processes. Not only will it give them a bird’s eye view of the entire business, but it can help direct them to the best strategic outcomes and which steps they should take to realize those outcomes.
Retailers that collect, integrate and analyze data from a variety of sources—from customer service chatbots and inventory management systems, to shipping trackers, point-of-sale systems and more—will be able to more quickly respond to the ever-changing competitive fashion landscape with data-informed decisions.
Businesses grow smarter, faster and last longer when their leaders make decisions guided by data. And, with the wide range of digital tools already popular, fashion retailers are perfectly positioned to gather and analyze a bevy of data from a variety of sources.
Many of these tools—including chatbots, interactive in-store apps, and everything in between—can help enable the personalization that today’s consumers crave. In turn, that personalization can reveal even more insightful and invaluable data that today’s fashion retailer needs to succeed.
You’re likely already using many of the tools you need to be successful in today’s fashion and apparel industry. It’s important, though, to not only use these tools to their fullest, but to integrate them so you can provide the personalized, omnichannel experience that your customers demand. This, in turn, will provide you with the data you need to sustainably grow your business.
In our guide to understanding and building an omnichannel strategy, we show you how to create, implement and track a successful omnichannel environment today.
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