Selling into Disruption | The Future of Fashion Stores
June 5, 2020
Co-Authors: Chris Hogue, Elliott Jacobs
LiveArea’s Chris Hogue, Vice President of Strategy & Products and Elliott Jacobs, Director of Agency & Commerce Consulting discuss the issues facing retail businesses as physical stores open once again. To watch the full webcast with Adobe | Magento Commerce, click here.
If we look at fashion since the start of the pandemic, clearly the industry has faced both a critical lack of demand, and a crippling loss of its retail channel. Despite many brands and retailers pushing online efforts with free delivery, loyalty initiatives, and other perks, 53% of consumers are spending less on fashion.
Social isolation all but wiped out the entire Spring season of social events, holidays, parties and weddings – all drivers of fashion purchases. Socializing extended to Zoom calls and daily exercise at best, with most people spending their days in sweatpants.
A new look
However, with isolation measures slowly lifting, there is change on the horizon. But even if we anticipate the slow return to stores and demand for fashion retail, the long-term effects of this pandemic mean this space starts to look very different. A new normal is likely to mean significant changes to the entire fashion retail experience.
What do we do in a fashion store?
Traditionally when we walk into a fashion store, there are four key components to the experience:
Browse. We browse racks of garments. Sometimes it’s too busy to walk down aisles and see what we want. So, we have to squeeze past groups of people, couples, sometimes buggies or people with lots of bags. In the new normal, this feels uncomfortable.
Touch. We pick up and feel the garments to study the texture, the quality, the comfort. Do I like the feel of this product? Is this going to look good on me? We’re constantly touching products and placing them back on the rack.
Try. If we like something, we’ll go into a changing room and try things on. Whilst you are in your own private space, this space has been used by multiple people. And there were a few products you liked, you tried a few different sizes of each – maybe you tried seven or eight products in total. With how we look at hygiene right now, is this acceptable?
Queue. In most fast fashion shops, queuing in close proximity to others is a necessary part of purchasing. This is often a deliberately curated environment where retailers upsell small value products. Now, you might have to even queue to get into a store if social distancing becomes a constant, as well as queuing to pay for items.
Each of these experiences no longer feel appropriate, and need changing from how we are used to experiencing them. To adapt, retailers will need to think about how technology can play a role in removing some of these friction areas and change how we experience fashion retail.
With online stores, brands generate and utilize a wealth of data on shoppers. Using browsing and purchase history, it’s possible to dial down on tastes, sizes, behaviors and preferences. Brands can then personalize the experience, by informing customers with timely, relevant content and driving them in the direction of products and promotions they’ll be interested in and excited about.
Now, let’s think how we can take that experience into the physical store environment. The information we receive is much more manual, through signage or staff. How can these touchpoints be used to ensure you are not going to disappoint the customer when they visit you? How are you going to use the data available to make this experience convenient, exciting and engaging for customers?
If brands can utilize customer data such as previous purchase history, sizing and preferences, they could curate a personalized safe browsing experience in-store, perhaps even a mini showroom. Personalized recommendations and curated outfits would increase transaction values, whilst creating an extra level of loyalty through a personal shopping experience. The key to this is data, using technology to oil the cogs behind the execution.
From a customer perspective, this safe space to experience products without the concern of lots of other shoppers would likely appeal, particularly to more vulnerable shoppers. In a similar way to how supermarkets have created safe shopping experiences for the vulnerable, private appointments may help these customers shop in a safe way.
Clearly, in some mass fashion stores, this might not be appropriate. But in environments where there may be less people in store, taking time to understand the customer behavior and what they’re looking for may be the best way to optimize customer engagement, as well as provide more data on tastes and preferences to evaluate and optimize product offerings and experiences going forward.
In addition, there are things brands can do to optimize inventory management, to make stock visible across their estates to online browsers. Most retailers are very good at offering click and collect. However, not many allow us to understand what stock is sitting in that store, or other stores nearby, that customers could go and pick up quickly and easily, without browsing. Making that data visible online and mobile is something that could enhance the customer experience.
Is there an opportunity to ensure that what customers buy is brand new from the store room? This is where fashion differs from many other sectors. If we buy items such as beauty, food, beverage, technology, then we receive something in a sealed container. In fashion, that isn’t always the case, and we can’t be sure how many people have touched or tried the product.
This might mean retailers having to stock more inventory and be smarter about how they optimize stock across locations. Again, inventory management is key to this. Those with full visibility across store locations, warehouses and distribution centers, aligned with forecasting insights from various data points, will be able to optimize production and distribution to meet demand whilst minimizing wastage or dormant stock.
There’s also an interesting opportunity around changing the format of the store. If we anticipate less footfall, it might make sense for retailers to reduce the size of the shopping area and turn these front-of-house spaces into more experiential retail environments. This could give more footprint to back-of-house store rooms to stock inventory and be used as mini distribution hub and facilitate the last-mile fulfilment that many retailers struggle with, to compete with the likes of Amazon.
The need to physically try items has always been a main barrier for why many people don’t have the confidence to purchase fashion online. A study by NPD found that 55% who choose to shop in-store wanted to try items on. Clearly, it’s a key reason why many consumers choose to enter the store environment.
To cater for those that are moving online, brands need to consider how to reduce the barriers to returns, so people can purchase items with the confidence that they can easily return if necessary. We’ve seen many brands offering free returns recently, particularly those forced to close physical stores but able to keep online operations open. However, even returning an item can be a hassle, especially at a time when people aren’t wanting to visit a post office or pickup point. When looking at returns, it might reduce the reliance on changing rooms if the ease of returns was made more convenient.
As an industry, there are huge structural changes taking place within fashion, such as automation, digitalization, and sustainability. Perhaps it’s time the industry starts to make sizing consistency a priority, which is another barrier to shopping online. Why does sizing fluctuate so much, with items cut so differently.
Wasting stock, dormant stock, lots of returns, different sizing, these issues feel more of a burden on the industry than ever before. The challenges of recent times may create an impetus to rethink the way we operate and work, to increase consistency and reduce wastage and churn due to inconsistent sizing.
Queuing, from a customer perspective, is a complete waste of time. With the retail experience likely to be stripped back from a leisurely experience into more of a functional one, how can we streamline the payment experience to one that removes friction: queuing and focuses on function: quick payment. Businesses can integrate the kind of CRM and data tools that we’ve mentioned to facilitate scan-and-go and mobile payment technologies. For consumers, this means a quick, hassle-free and safe contactless payment, whilst businesses will glean even more data to refine marketing and merchandising efforts.
Making it happen
There are many opportunities for possible future in-store and omnichannel experiences. From safe browsing ideas to trying products and managing returns, to data-driven product recommendations and scan-and-go technologies.
For sure, these digital experiences are great to personalize, engage, glean data, provide convenience, improve safety and promote loyalty. But equally, it’s important to do logistics well. If you’re going to be increasing demand on omnichannel initiatives like ship from store, managing returns, scheduling pickups, or scaling up inventory in store, this requires sophisticated logistics. And not just in warehouses, but also in-store. Businesses will need to focus on the systems behind these operations, to really master universal inventory. There are modern OMS, and DOM tools behind the scenes to make these customer-facing experiences happen.
DNVBs (digitally-native-vertical-brands) – the likes of Boohoo, ASOS, and UntuckIt – have grown successfully with these modern systems and data at the core of their operations. But a lot of traditional retailers won’t have been able to shift as quickly to these modern systems. A significant modernization effort will have to take place for these retailers to adapt.
It’s the orchestration of data that will stand these brands and businesses out. Customers these days aren’t prepared to wait and will shop where and when they want in order to get the products they demand, quickly. Brands will have to step up to offer this to them, and it’s the technology and infrastructure that will allow this to be delivered consistently, and reliably, at scale. The secret is data, at every touchpoint.
Read the other blogs in this series:
Chris Hogue | Vice President of Strategy & Products at LiveArea
Chris has more than 20 years of experience launching innovative digital solutions and services. He works closely with B2B brands on expanding their capabilities in new ways. Before joining LiveArea, Chris was head of strategic initiatives at Isobar where he led the development of a new data platform, optimizing campaigns and user experiences and combining behavioral and emotional data.
Elliott Jacobs | Director of Agency & Commerce Consulting at LiveArea EMEA
Elliott is an experienced global commerce and multi-channel retail professional, specializing in helping B2C and B2B companies achieve measurable success by reviewing current strategies and processes, and identifying and capitalizing upon emerging digital opportunities.