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Comment: Keeping ahead of the fashion
According to Mintel Research, in spite of the sluggish economy the online fashion market was worth £4.1bn in 2009, up 26 per cent on 2008.
By Steve Davis
Some of the major fashion retailers such as H&M and Zara have finally announced plans to launch transactional sites in the UK, and the expert view is that this year will continue to see online fashion sales recover and grow. But, with impressive figures from pure-play competitors, such as Net-a-porter, BrandAlley and ASOS – the last of which saw sales grow 47 per cent in the six months to the end of last September – how can multichannel fashion retailers close the gap? Steve Davis, President International, GSI Commerce offers his perspective.
To the industry outsider, the success of the pureplay apparel sector might look a little odd. Yes I know they don’t have to worry about real estate and in store costs but, when you think about it in terms of opportunities to sell, they have only got the one – online. Multichannel fashion players, on the other hand, most likely have multiple bricks and mortar stores, catalogues, web stores – the whole mix. Surely that increased transactional access to customers should make a difference? Why is it then that the multichannel players are not doing so well in comparison? Broadly speaking, and I apologise for the generalisation, there are two factors: a failure to successfully integrate all of their channels, and a lack of focus on website development.
The multichannel distraction from developing the web experience
As we know, pureplays don’t have the luxury of being able to sell through different channels and because they only have the one, they have to be sure that it’s performing at its absolute peak. By contrast, although we are now beginning to see improvements, it’s still the case that many multichannel players are slow off the mark when it comes to optimising their customers’ experience online. This doesn’t mean that you should invest in every new feature or web 2.0 application because it looks good – there are plenty that look pretty but won’t result in more sales – but it does mean that you should be constantly evaluating and thinking about how you can add value to your customers’ experience.
Improved product presentation is probably the most powerful feature that improved technology can bring to etailers and is absolutely essential in the fashion space. New technologies now mean that the retailer can offer the customer an experience much closer to that of physical, in-store browsing. – essential for the pureplays but no less valuable to the multichannel customer.
When the customer cannot physically touch the item, they should at the very least be able to view multiple product images. 360 degree views, zoom capability and video can all contribute to making the difference between a browser’s decision to purchase or leave an item. That said, of course, these capabilities should be available without demanding that the customer view a separate page or suffer long loading times. There will always be customers who come to your site knowing what they want to buy, for this group convenience has to be paramount. Clutter their experience and you witness their reaction in cart abandonment rates.
It is also essential to remember that for a large proportion of customers, shopping is a fundamentally social activity. While multichannel retailers can offer this experience to shoppers in the high street, pureplays have no option but to provide aspects of this experience online through peer-to-peer recommendations, social networking facilities and customer reviews. Why should a customer believe a retailer when they say, ‘this skirt goes with this top’? They’re far more likely to respond and believe it when they see another shopper saying that it does. Again, pureplays have been quick of the mark in this space but is there any reason why multichannel players should not be offering a comparable experience?
Pulling the channels together
Recent research from GSI Commerce revealed that as up to 60 per cent of potential customers slip through gaps in retailers’ multichannel purchasing strategies. If a customer can’t find an item that fits them or that they like in store, don’t assume that they’ll automatically visit your website or come back another time. They’re far more likely to type the product details into Google or visit a price comparison engine. If you don’t have your channels linked and coordinated you risk squandering the advantage of having multiple channels in the first place.
If you’re also out of stock online but know that it will shortly be replenished – you should leverage your back-order capability so that you can still take the order and advise the customer of the expected delivery date. Our research revealed that 81 per cent of consumers would be likely or very likely to take this option if it is available and, from experience, a retailer can gain up to an incremental three per cent lift in total sales this way. Peacocks is a great example, the retailer offers swimwear throughout the year on its website but doesn’t sacrifice floor space to such seasonal outfits all year round – it just makes sure that customers know and are encouraged to make their purchase via their web store.
You should be offering your customers extra convenience through the option of buying a product online but collecting it in-store. While not everyone will go for this option, it can present a customer with significant opportunities that would not be available from a pureplay. It’s not a complicated formula; it’s simply a case of realising what opportunities exist to you as a multichannel operator and making the most of them.
While there are some notable exceptions, it seems clear that in the majority of cases UK multichannel fashion retailers still have a long way to go. But, as more and more brands become savvy to the value of integrating their channels and offering customers the same experience online as a pureplay would, we will inevitably begin to see a shift as multichannel retailers learn to use their assets to best their competitors. I’m expecting big things from the multichannel corner in 2010.
Steve Davis is President International at GSI Commerce
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