GUEST COMMENT Fashion: thriving in a multichannel world
by Guy Chiswick
Buying fashion today is a more complex process than ever before. The multitude of channels available to consumers give them far more choice of how and where to buy. Moreover, during the course of a purchase, consumers will elect to use a number of different channels to fulfil different aspects of the purchasing process.
This changing environment has had three key impacts that are specific to the world of fashion, according to retail analysts Conlumino in a report commissioned by Webloyalty. Firstly the process of purchasing has been elongated. Secondly, the cost of dealing with consumers has increased. Thirdly, there is an issue for retailers in terms of how to successfully manage and measure multiple channels.
While it is often thought that the internet has speeded everything up, when it comes to fashion, the profusion of channels has actually slowed the process down. Multiple channels have added a level of complexity that has seen the time the average fashion consumer spends on a purchase increase from 83 minutes ten years ago to 111 minutes today. The internet has increased the amount of choice in fashion by allowing consumers to access stores and offers which are not geographically proximate. Furthermore, the internet has helped people to expand the time they have to browse – long after physical shops have shut their doors. Multiple channels also increase the time between the various purchasing stages.
One of the most fundamental issues for fashion retailers in the multichannel era is making sure each channel is fine tuned to the way in which consumers are using it in the purchase process. This is arguably a bigger challenge in fashion retail than other sectors, where inspiration and browsing are so important. Below, we explore the changing dynamic of the purchase pathway and how we shop for fashion.
The five distinct stages of the purchase pathway are browsing, researching, purchasing, collection and returns. Traditionally, the vast majority of shoppers would undertake these steps simultaneously under one roof. The rise of new channels and the widespread penetration of new technologies, including smartphones and tablets, has both elongated and fragmented the purchase pathway. In all of these stages, the online desktop has seen meteoric growth at the expense of significant decline in physical stores. Although physical stores are still the most popular channel for the browsing, purchasing and collection stages in the fashion sector, the current rate of change suggests that online will soon take over in these stages.
Uptake of mobile technology in the purchase pathway has been slower in the fashion sector than in other sectors. This has been attributed to the small format being unsuitable for the browsing phase. Numerous retailers have sought to overcome this with mobile apps to some success. ASOS and John Lewis are standout examples. Mobile comes into its own in the researching phase and at this point can provide the missing link between physical stores and online, for example by providing sizing and stock details.
In the collection phase, it is click and collect services that have seen explosive growth over the past few years and is a great way of bringing together online and store.
The returns phase is problematic for fashion retailers. The growth of online has pushed up the number of consumers returning products remotely. Again, this is a unique problem of the fashion sector. To some extent, the consumer’s bedroom has become the changing room for online fashion retail with customers ordering a selection of products with the intention of returning a certain proportion. Conlumino estimates that in 2011, returns cost fashion retailers £33.8 million.
What key actions must retailers take in order to ensure that each of their channels is fine tuned to the way it is used in the purchase process? Firstly, fashion retailers no longer need a wide geographical spread of stores to reach a wide audience of shopper. Today, a good internet presence generates reach and credibility. Fashion retailers should seek to reduce physical store operating cost by employing a hub and spoke model, where a handful of flagship stores, complemented by local stores selling a limited range and the whole range available online. For retailers to create consistency of stock across channels, click and collect services and ordering in store for home delivery will satisfy consumer demand to buy anytime, anywhere.
Personalising the multichannel experience is another key action that retailers must take. The danger with online retailing, especially in a sector such as fashion, is that the experience can become impersonal and the brand can become disconnected to the retailer. Allowing customers to engage with the brand whether by creating wish-lists, creating Facebook style ‘likes’, or sharing looks they have created helps to create connections.
Providing customers with a seamless proposition in the face of increasing complexity is a key action if fashion retailers are to thrive in the multichannel world. But few retailers are yet to crack this successfully. Retailers need to integrate systems so that they and the shopper have a single view. Stock availability is a major issue here with online sites often showing outages when the product is available on the shop floor.
Finally, the online environment and growth of mobile in particular is driving price transparency for consumers. To avoid resorting to price matching and discounting, retailers must differentiate and add value to their brand. Fashion has an advantage over other sectors in that it can create uniqueness through own brands and add value in terms of styling. Furthermore retailers can add value by providing loyalty-based rewards, benefits and special offers to their customers.
In order to thrive in the multichannel world, fashion retailers must ensure that the multitude of channels adds to consumer experience by enhancing each stage of the purchase process. A seamless multichannel experience that enables customers to interact with the brand effortlessly across channels and connects the physical and digital worlds of fashion will drive sales. Guy Chiswick is managing director of Webloyalty UK.