What is fashion retail’s recovery plan?

By Ben Sillitoe

We learnt at this month's IMRG Fashion Connect that it hasn’t been a particularly good 12 months for those selling clothing, in particular purveyors of formalwear, occasionwear, smart shoes, and office clobber.

That won’t be a surprise to those at the heart of those particular sectors, who have spent a large part of the pandemic with “closed” signs on their shop windows and limited online sales to make up for it due to reduced consumer demand.

IMRG’s data shows online sales in fashion were up by just 1% year on year in 2020, while homeware, electricals, garden goods, and gifting all experienced high double digit growth spurts. Oliver Bonas is a good yardstick – normally around 60% of its business is fashion but that “plummeted” last year as “everyone shifted to homeware”, according to the retailer’s connected commerce lead, Camilla Tress.

To illustrate the point, Oliver Bonas typically would sell three puzzles a week in normal times, but 1,500 flew out the door over a seven-day period at one stage in 2020.

“We’re lucky we’re able to pivot and shift and focus on different areas,” Tress said, acknowledging the wider fashion industry’s recent pain. Loungewear, slippers and activewear replaced dresses and party wear as in-demand fashion items, she added.

Many retailers at Fashion Connect referenced the increased power of their digital offering compared to the start of last year, but shifting to digital alone wasn’t enough to spark a wide sales surge. With that in mind, we got IMRG solution provider members to advise what should go on fashion retail’s recovery plan, and here’s what they suggested…

Make the most of first-party data

A focus on data has always been crucial for fashion retailers, but this year the importance of first-party data has ramped up somewhat with Google announcing third-party cookies – relied upon by programmatic advertising – are not long for this world.

Indeed, White Stuff’s head of eCommerce, Seb Villien, told Fashion Connect that this particular move combined with Apple’s iOS privacy updates “makes us adapt to how we identify people”, acknowledging the challenges this brings to personalisation strategy.

Elliott Clayton, senior vice president for Media UK at Epsilon, a data-driven marketing company, notes: “To stay ahead of challenges like the pandemic, Brexit and third-party cookie deprecation, the fashion industry must take advantage of the richness of their first-party data and focus on building a strong asset. 

“By working to join digital to name-based data assets they can build a 360 view and stay connected to their customer. Activating first-party data will help to create personalised and individual messaging. With the right data, they will notice triggers and signals in the moment their customers’ needs are changing so that they can deliver relevant messages about the next product they’re ready for.”

Rob Delijani, senior director of growth strategy at Wunderkind, a performance marketing software business, adds successful retailers will “use their owned-channels, like email and text, to reach out to consumers”.

“Owned-channels are the way of the future because they allow you to reach your customers with highly personalised messaging without relying on the support of third-party channels,” he states.

Meanwhile, Barley Laing, UK managing director at Melissa, which helps retailers verify addresses and contact details online, argues: “At the heart of fashion retail’s recovery plan needs to be clean customer data.

“They must understand the vital role clean customer data, particularly address data, plays in helping to not only drive sales success, but in reducing costs, fraud and delivering a standout customer experience.”

Payal Hindocha, retail analyst at Emarsys, a marketing software business, calls on the fashion retail world to embrace an “innovation mindset”, and to use customer data “to provide more targeted, impactful and intelligent experiences”.

 

One way or another, have a returns strategy

It’s well documented the challenge fashion retailers face with returns – it’s a multi-billion-pound annual cost for the industry as a whole.

Pete Blackburn, commercial director at parcel locker network operator InPost UK, says getting a grip on returns has heightened in importance over the last year.

“With no access to changing rooms to try on clothes, shoppers are using the returns process as a virtual fitting room – to essentially try clothing before committing to their purchases,” he states.

“To keep up with this trend, brands must ensure returns are kept simple and swift to secure shopper loyalty and satisfaction at a time when the stakes are so high. This means being clearer about returns policies, extending the returns window and issuing refunds more quickly.”

Ed Hodges, CEO at HelloDone, a conversational commerce technology company, argues that fashion retail has much to do in terms of improving the post-purchase customer experience. According to his firm’s research, fashion retailers account for the highest proportion of lowly one-star Trustpilot reviews attributed to post purchase.

Over two-thirds cite issues with delivery and returns, he explains, adding: “If brands want to build trust and retain customer loyalty, they need to massively improve the way they communicate with customers.”

Alex Marsh, head of buy now, pay later solutions provider Klarna UK, thinks returns must be embraced as a necessary component of fashion retail.

“In the short term, online retailers would be wise to invest in – and ultimately, embrace – the optimisation of the online returns process,” he says.

“While returns can involve added costs and admin, it’s an important part of the shopping experience, especially while consumers have no option but to use their sitting room as their fitting room.”

Returns and Refunds

Keep the customer communication flowing

White Stuff and Moss Bros were among the retailers at Fashion Connect which said they continued to talk to their customers throughout 2020 despite their shops being shut for large periods. It was a case of using their feedback to make changes to the online experience, and maintaining a line of communication.

Dora Birna, global director of marketing & growth at parcelLab, a post-purchase customer communication platform provider, commends fashion retailers for their online prowess, but feels more needs to be done in order to stay ahead in this sector.

“Fashion has long been ahead of the curve when it comes to eCommerce – some of the most successful online stores are fashion brands,” she acknowledges.

“However, the market is becoming increasingly crowded so how can these fashion retailers stand out and differentiate themselves? These brands need to invest in owning the entire buying journey.”

 

Think about all the channels holistically

As Brendan Murray, content marketing manager at Akeneo, said “fashion retailers have had no choice but to embrace digital” in the pandemic, including using social selling and marketplace channels.

And consideration of which channels to focus on in the last year has been accompanied by additional challenges. Stephanie Stanton, UK & Ireland marketing manager at OSF Digital, a digital transformation specialist, says “social distancing measures, surging demand, fulfilment challenges and much more” have impacted fashion significantly.

So, how should the sector deal with that situation? For Naomi Botting, communications manager at Lengow, an eCommerce feed management platform provider, it’s about prioritising “urgent issues”.

“That covers adapting and perfecting your presence on multiple channels, mastering your omnichannel strategy, and making sure that all your operations run smoothly to foolproof your customer experience,” she states.

Other elements to for retailers to think about as the map out omnichannel strategies in a pandemic – and one would assume, once the pandemic subsides – include offering “virtual store tours, providing contactless checkouts, and mobile wallets or QR payments”, according to AsiaPay’s Alecxa Julia Cristobal.

Virtual Reality

Optimise all parts of the web experience

Villien said during his Fashion Connect speaking slot that pre-pandemic plans to redesign the whole White Stuff website were adapted as the coronavirus crisis took hold. Instead, he explained, the wider project was split into smaller projects.

It meant there was a ”continuous delivery of new functionality” for customers to experience, and it gave the retailer’s eCommerce team an opportunity to monitor and tweak each new component incrementally.

Brad Houldsworth, head of product at eCommerce platform provider Remarkable Commerce, says: “The retailers which succeeded in 2020 were the ones who were agile and responsive to the situation their customers were facing.

“Being able to deploy new functionality at speed, such as new technology propositions or small user experience improvements was critical – these had a direct link to positive customer engagement and revenue increases.”

For Michelle McSweeney, content marketing manager at Kooomo, an Ireland-based eCommerce platform provider, fashion retailers need to focus on “nailing the basics”.

“Context is still everything; product descriptions need to be rich; categories need to be well-organised; site search needs to be razor-sharp,” she explains.

“There’s nothing more frustrating for a consumer than seeing a necklace or skirt online that they’re keen to purchase, but not being able to gauge how that necklace looks when it’s on because the product image doesn’t show it on a model, or how long the skirt is because the description doesn’t mention the model’s height or size.”

Frazer LaChance, client development manager at Lucidworks, a search and data company, adds: “In the current climate, it’s even more important that retailers convert the people they’ve successfully brought to their site.

“Your customers have so many options at their fingertips – if they can’t find it on your site, they’ll go buy it from your competitor.”

 

Think about new partnerships

The pandemic has influenced retailers to create unlikely partnerships. On the food side, for example, who would have put Marks & Spencer (M&S) and Deliveroo together before March 2020?

And in fashion, it appears more and more retailers are realising the strength of collaboration – either finding quirky tie-ups for marketing purposes or natural stable mates. An example of the latter is M&S welcoming Joules, Seasalt and others to its website, as all parties look to expand their appeal to wider demographics.

Andy Harding, UK managing director at BNPL solutions provider Openpay, comments: “Viral collaborations and brand partnerships were key tactics in the online and social media sector to drive publicity, brand recognition and ultimately sales, while consumers shopped online more often than before.

“The North Face x Gucci collaboration was a great example of a surprising partnership, which while potentially polarising, was a reflection of fashion’s heightened focus on technical clothing as a result of lockdown. We’ve even seen retailers like Mr Porter sell tents and Louis Vuitton selling kites.”

Brand Partnerships

Prove you’re helping protect the planet

Research discussed at Fashion Connect showed fashion is perceived negatively in terms of having a harmful impact on the environment, so showing greener credentials and ramping up environmental strategy is becoming increasingly important for the sector.

It will be a case of following the consumer’s lead here, or – even better – being one step ahead of the consumer. There is a groundswell of interest in more ‘circular’ fashion retail models, including rental and second-hand fashion, and that will only continue.

Ben Scherpenbergs, senior manager for business management at PFS, and eCommerce solutions provider, says: “A traumatic 2020 accelerated the shift towards sustainable eCommerce.

“When it came to marketing collateral for the promotion of products, whether that be through inserts or sustainable or right-size packaging, brands need to be consciously creative in the ways they go about promotions. The culture of convenience is evolving into one with a conscience – and consumers are looking to retailers and brands to strike the balance.”

Rory O’Connor, founder & CEO of Scurri, a delivery management software company, adds: “Listening to the consumers will become more important than ever, and with consumers making a shift towards more conscientious shopping, fashion retailers will have to shift to fit this mould.”

 

Summary

UK prime minister Boris Johnson may have announced a roadmap out of perpetual lockdown for the country, on Monday (22 February). Fashion’s route towards recovery is perhaps more complex than other sectors in the retail industry.

By Ben Sillitoe

Published 24/02/2020

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