Journalist, Kristin Wertz analyses the importance of up-to-date online platforms as e-commerce gains more traction than ever before.
Retail was in trouble long before COVID-19 hit. Over the past five years there have been daily reports of store closures and bankruptcies. The growing use of e-commerce has depleted many retailers’ top line revenue, forcing them into discounts and promotions to keep up their businesses while a global pandemic, essentially shutting down the whole world, piggy-backs onto this struggle making it even more difficult for some companies to rise from the ashes.
However, as stores like Barney’s New York unfortunately closing its doors for its last time, fast fashion brands and direct-to-consumer brands continued to expand their presence on the high street. Luggage maker, Away, raised $100 million to open 50 stores around the US, while eyewear brand, Warby Parker, opened 65 new stores. All of which were made to close up shop during the height of the Coronavirus outbreak, suggesting a need to transition away from the face to face retail market and towards online e-commerce.
This is not as easy as it seems, though. Many consumers crave face to face contact, even more-so now after months of being locked away. Consumers will do anything to have physical experiences, evident in the retail activity in recently opened countries around the world. As lockdowns are lifting, brick and mortar are seeing a resurgence in popularity, but will this last, or simply die out again when the world gets back to normal? COVID-19 put an abrupt stop to physical retail and many businesses had to accommodate consumers by moving entirely online or building a half-assed, shoddy online platform overnight. However, this transition to online has benefitted the likes of Shopify who has seen a 47% revenue growth in this year’s first quarter and stay-at-home orders turned even those who were once reluctant to shop online, into online consumers, resulting in a surprising boost for commerce for brands who transformed their business model.
But as the world slowly transitions to some new form of normal, what can businesses do to keep the customer as intrigued and as eager to shop online as they are when they walk into a store and are greeted with human interaction and a friendly smile? Because, quite frankly, a chatbot that knows your name and offer’s help with a colon and a close parenthesis at the end of the message is both slightly creepy and incomparable. But, a new age of everything digital is coming, from online fashion shows to 3D printing and even the sole use of card payments instead of cash. The idea of a totally digital world is starting to seem that much more plausible. But how can retail businesses utilise and profit in the same way without that face to face shopping experience? For some businesses that is what helps keep their business alive, the quality of their customer service.
One fundamental challenge for many fashion brands is that, increasingly, they lag behind consumers’ expectations. The role of the consumer has shifted from one of passive observance to enabled dominance. People are no longer happy simply buying fashion products; the growth in the use of digital technologies has empowered them. People want to interact, belong, influence and be the brands from which they purchase. Informed, selective and in charge they care about their image on social media and out in public and the perception of the goods they own. Therefore showing the vast majority of consumers use digital channels before, during or after buying their goods.
What this means is that becoming a digitally savvy brand can no longer be considered a separate business. It will become increasingly more important to organisations and the consumer brand relationship. There are no more typical consumer segments, no more one size fits all solutions. Each brand will have to find a way to set themselves apart from everyone else to stay afloat in the black hole of google. The last thing you would want as a business is getting lost in the darkness because your online platform is not up to par resulting in a loss of online visitors and severe loss of sales revenue.
New standards of service and experience are being set and it is mostly about moving away from being a product brand to becoming one that shapes and implements contextualised, consumer-centric propositions – a brand that considers its customer’s entire experience in an eco system. Legacy businesses with simple analogue systems and processes are being judged by these new standards and are finding themselves obsolete and outdated, therefore lagging in the online foot traffic necessary to gain customer traction and engagement.
Many brands, however, are still trying to bridge this digital divide. Given the risks, with brand identity and heritage at stake therefore making it a delicate road to take. Any digital manifestation of the brand whether it be social media platforms to third party distributors it all has to go hand in hand with the redefined brand values and has to be tailored to the needs of the consumer. A misaligned or generic digital offering may actually widen the digital gap and pose a risk to the brands reputation.
But in a world that is becoming more and more complex and volatile, brands will need to balance growth and operational brands with the strategic risks they face. Essentially companies have to increase their vigilance making brand and reputation the most important commodities to protect.
Digital transformation is the means by which companies effect organisational change and closing the gap between customers expectations and the service and experience they receive. For fashion brands this means re imagining how shopping in a digital world should play out, rather than merely digitalising the shopping process for a physical world.
Digital transformation is about changing and ingrained perception about what a product or company says and does. In order to increase the relevance to the consumer.The shift towards omni channel is happening and shows no sign of slowing down. Some brands are still driven predominantly by physical channels and geographical locations are still the cornerstone for offline demand. But a key enabler for success will be to ensure a consistent omni channel consumer experience that encompasses physical, virtual and emotional aspects, from
communication to conversion and beyond.
Another way is digital “clienteling” including leading edge processes analytics and technological developments in digital marketing, commerce and sales and service platforms. What this does is deliver a personalised customer experience across multiple platforms and improving revenues and conversion rates.
These days there is so much information readily available about peoples consumer habits, trends and behaviours. But investment in big data and analytics is rendered useless if decision makers do not have the skills or competence to convert insight into sharp business decisions. The ability to unlock this information is key to understanding the mindset of how the consumer is now, and likely to be in the future.With this data science, fashion brands will be able to understand their customers better and be able to respond to specific market trends and therefore be able to tailor the products to an individual consumer better.
There is a sense of urgency and the digital transformation is building up speed as companies begin to re imagine, reshape and re tool for an era in which all the old formats of fashion are broken. The speed in the progression of technology and its fast paced uptake by the consumer needs a whole different level of priority for fashion brands. The main drivers for this being either their businesses will survive and thrive or existential threats.
The key is to find the balance between placing bets – provoking fast results with innovative ideas and building a solid ground for a digital transformation. For both, the major challenges are not just about releasing the power of data, managing the brand and potential risks to a reputation, managing the full value chain, or bridging the digital technology divide.
These are all essential ingredients of the ultimate digital challenge for fashion companies. Basically an entire change in organisational couture that puts the consumer at its head.