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GUEST COMMENT As clothing brands reach critical Covid pinch point, ecommerce strategies will determine tomorrow's brand winners and losers

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GUEST COMMENT As clothing brands reach critical Covid pinch point, ecommerce strategies will determine tomorrow's brand winners and losers

Tommy Kelly is CEO of eShopWorld
Tommy Kelly is CEO of eShopWorld

As High Street brands assess the fallout of Covid-19, ecommerce emerges as a bright light in an otherwise stormy retail sector. Even as brick-and-mortar stores reopen, social-distancing rules and consumer concerns for safety is squeezing retailers from two extremes of the supply chain – physical stores and omni-brand online discount channels.

 

Around the world, consumers’ daily routines have changed dramatically. Remote working, job insecurity and safety measures in stores has contributed to a dramatic drop in physical footfall as shoppers flock to online retailers. Brands reliant on a physical shop presence face significant in-store constraints and Covid compliance costs and many are also locked into high cost, investment intensive leases.

 

A structural shift in retail had already been evident but the pivot to ecommerce has been accelerated by Covid. Long seen as complementary to a mainstay bricks & mortar presence, ecommerce has in many ways taken centre stage, with physical shops now increasingly seen as a way to provide an experiential and aesthetic accompaniment for increasingly online-focused brands and consumers.

 

Covid has and will expedite that process but the trajectory was already set by the rise of smartphones, evolving consumption preferences from GenZ, through Millennials, GenX and the so-called Silent Generation. That trend is amplified by a strong and growing female bias towards buying clothing and shoes online, at a level that (even pre-Covid) saw more female purchases of clothing online in some markets than the traditional ecommerce favourites of air travel and hotel bookings. Scott Galloway, Professor of Marketing at NYU recently commented that we have seen an evolution that should have taken a decade to play out transpire in just eight weeks. It’s unlikely that we will ever go back to ‘how it was before’.

 

Personalisation and localisation of ecommerce is key right now and over the longer term

 

The growth of online shopping is driving demand for increased digital capabilities of brands. Brands require a truly Unified Commerce approach to reach consumers with information at their fingertips. Omnichannel is a key component of that unified experience, but the impact of Covid on physical stores is changing how brands need to think about what omnichannel means for them. More and more, we are seeing a reframing of the traditional view of omnichannel towards one in which stores will need to be utilized as inventory pools and experiential destinations that can support online transactional channels.

 

Modern shoppers have come to expect an effortless shopping experience from the discovery phase through to purchase and delivery, and brands already providing that frictionless experience have been better insulated from the worst impacts of Covid-19. Additionally, retail brands need to be agile and able to move quickly to find and meet demand as market conditions evolve around the globe. Right now, there is incredible opportunity beyond domestic channels, across multiple categories. In our experience, prior to Covid, brands that deliver a localized ecommerce experience could typically expect to see up to 300% growth in sales in key markets. Post Covid, that growth has accelerated further.

 

In the three months after lockdowns were implemented (April through June), eShopWorld data reveal that volume sales on its platform exceed the busy ‘Black Friday’ / pre-Christmas months, synonymous with high volume sales for brands. Apparel, footwear and sporting equipment were the top three drivers of international ecommerce growth year-over-year. Demand for apparel, in particular, rose with a 98.4% increase in orders in April compared to last year, 99% increase in May, and 121% increase in the first half of June compared to the same period in 2019.

 

Unlocking the power of cross-border sales

 

There are currently over 2.65 billion social media users, gaining access to these potential customers presents a great opportunity for brands. Cross-border online shopping is predicted to account for 17% of total ecommerce sales in 2023. Engaging, interacting and converting the discerning consumer requires simplifying the cross-border shopping experience to drive higher engagement and to meet the expectation of the customer.

 

In its March 2020 report of online shopping traffic, SEMRush cited Nike Inc. as the global leader with 139 million visitors to its site, highlighting the extent of opportunity and reward for those who achieve the online ‘sweet spot’ of frictionless direct-to-consumer engagement.

 

In 2019, early adopters of eShopWorld’s platform – typically North American brands – saw vast demand in European markets, which now account for almost $7 in every $10 sales of their sales on the platform. The potential to grow sales, reach and brand loyalty outside home markets is enormous, and brand counterparts in markets across Europe and Australasia want in.

 

A strong brand and ecommerce platform can be further amplified through social media platforms. Instagram’s response to the current global pandemic was to provide additional supports for businesses. The social media giant has added new features to help shoppers find and support business by easily showing their support on their Stories. Our Market and Innovation review found 60% of Instagram users use the social media platform to find and purchase products; a further positive differentiator for brands with a strong online presence.

 

Response to the immediate, will determine the future

 

Decisions taken today will determine whether current pandemic related challenges present existential challenges into the future or open a unique opportunity to reach more and better customers and to ride a structural trend towards premium, value driven ecommerce.

 

Now more than ever it is clear that those brands who understand how to thrive in the new market conditions are maximising their ability to personalise a direct-to-consumer engagement, at scale. In the current environment speed to market, quality data insights, shopper driven experiences, and the supply chain agility to quickly re-direct product to areas of highest demand will determine the winners and losers at this extraordinary time of challenge and opportunity for retail.

 

Tommy Kelly is CEO of ecommerce technology platform company eShopWorld

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