Just the same as the great rush to China, brands now see the Internet and technology as the new frontier. Amidst slowing growth in the East and rapid acceleration of global online apparel sales many luxury and fashion brands are hoping this is where they will see their revenue growth.
We hear glory stories on an almost daily basis of fashion newcomers seeing phenomenal success online and startups raising unheard of amounts of Venture Capital money. With global online retail sales expected to grow to $2 trillion by 2018 and European sales expected to be $250 billion of that with a growth rate of between 11% and 12% per year (CAGR) it is certainly a channel that must be given its due attention.
However those looking to bolster their bottom line through online sales must be prepared to put in the work. In this highly competitive market an attractive, easy to use website and great product may not always do the trick. So, when offering a great product on a great platform with great customer service just isn’t quite enough what can you do to maintain growth, create loyalty and get an edge over the competition?
For the past few years we have seen a plethora of new fashion technology companies pop up. Some of them fade away as quickly as they burst onto the scene while others show a true understanding of the fashion market; it’s pain points and nuances. For 2015, we hope to see fashion technology moving past the point of creating for the sake of creation and into the finessing of their softwares, platforms and services to a stage where it’s more than a cool concept; where it’s a great, useful, and powerful tool that can help increase conversions and retention.
Here are our Top 5 themes, and the players involved, emerging in fashion e-commerce technology that we hope will pave the way in 2015 and beyond:
For a few years now 3-D body-scanning technology has been trying to circumvent the “fit” problem of online fashion. Despite the huge growth the online apparel market has seen, at the latest count, only 11.5% of retail sales are being made online - (Office for National Statistics, UK). This leaves huge room for improvement to reach those customers who are still unsure about purchasing online or others who save big-ticket purchases for in-store.
Thankfully, the summer of 2014 saw Bodi.me take a giant leap in the size/fit conundrum by launching a, user friendly, B2B product for fashion retailers to integrate into their e-commerce stores. With standard fashion e-commerce conversion rates generally falling below 1%, Bodi.me offers a solution to help increase conversions by offering customers a far more accurate assessment of how a garment will fit them. It’s early days yet but already Bodi.me has seen an average increase in conversions by 30% across their B2B customers with some retailers seeing increases of as much as 60%. It seems only a matter of time until we are all staring at a virtual version of ourselves trying on outfits from the comfort of our desk or home.
Visual Search is another key buzz term that has been on the fashion radar for the last two years. Tech CompanyCortexica has created a pioneering B2B solution allowing big brands, retailers and developers the ability to implement visual search technology into their own platforms. Through their trademarked ‘Find Similar’ technology end customers can use image recognition software to yield search results often better than traditional text searches and undoubtedly much more inspiring. Trendabl, Shopstyle and Zalando have all already signed up, let’s see who else joins the party in 2015. Oh, and there’s ’Find Similar’ for shoes as well!
Branded Communities is a term that has not yet reached the masses of the fashion industry but is likely to become a key marketing concept soon. Rather than trying to simply gain more social followers, a branded community aims to create an attachment between the brand and the community and create a two-way dialogue with loyal brand advocates. Think #TheNetSet, Net-a-Porter’s hashtag created for customers to tag their purchases on Instagram and Twitter and then be included in their ‘The Net Set’ page, here. The User Generated Content is a key part of creating this community and companies like Olapic help you do this in an efficient and optimized way. Olapic allows brands to source content, in real-time, from their customers all around the world i.e. Instagram, Facebook, Twitter Youtube. Brands can then pick and choose which content they want to approve and tag it to content or products on their website. Once tagged and approved the brand publishes the customers’ content either on product pages, making them shoppable, or on the homepage or content pages. They can also request rights to use the photos for other marketing collateral. With statistics like ‘32% of customers preferring to buy a brand online if they have seen ‘real’ customers wearing the product’ and ‘46% of internet users consult social media when making a purchase decision, Olapic is seriously on the forefront of offering a very, very powerful sales tool.
Branded Delivery service has in the most part been reserved for Net-a-Porter and New Look, companies with enough online orders to justify having their own fleet of branded vehicles and logistics teams. 2014, however, saw the launch of Urban Bundles, a B2B solution offering speedy, same day, branded delivery service for brands and retailers. Founders Kate and Lucy had the ingenious idea that all brands should be able to offer the luxury experience from online to doorstep rather than having the process interrupted by traditional courier services that have no attachment to the brand. Urban Bundles allows online stores to have their own branded vehicle with uniformed and trained driver and branded delivery emails and text messages to ensure a seamless brand experience from online checkout to door. Harvey Nicholls has just signed up and if you have a look at the Urban Bundles Instagram page you’ll get an idea of some of the other clients on their roster. While Urban Bundles is currently only operating within London’s M25, this is likely only a temporary boundary, with other key metropolitan cities in their sites for the future.
Customisation is not an estranged concept to the fashion and luxury industry; in fact, it is engrained in the industry’s history. While it has remained integral to many brands’ service offering, it has not translated to online quite so well until recently. For 2015, customization will start to become the norm with online retailers now that technology has advanced far enough. Take a look at Tinker Tailor, an online luxury multi-brand retailer that allows you to customize some of your favourite brands such as Marchesa and Giambatista Valli. Kate Spade, on the other hand, allows you to customize your own weekend bag with her Saturday range. Brands and retailers can think of customization in two ways: a great marketing and PR stunt or an added value service offering. Whichever way they choose to go, they should be prepared that, at the least, they should be offering the same level of customization online as they do offline.
While the above 5 themes show a snapshot of what is to come in fashion e-commerce for 2015, there are just as many, if not more fantastic technologies, that are bursting at the seams waiting to make their debut. With so many technology entrepreneurs looking to dip their feet into the fashion world and so many fashion veterans willing and eager to learn more about tech, it has me wondering; is tech the new black?
Sasha Ternent is a fashion and luxury industry digital specialist who holds an MBA in Luxury Business Management. She is currently consulting for a number of fashion ecommerce and fashion technology brands on their launch, optimisation and growth strategies. For more information or guidance on fashion ecommerce and emerging fashion technologies email [email protected] or follow her on Twitter @SashaTernent.