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Fashion’s Digital Transformation

Fashion has spent a year almost totally unable to depend on its primary channel to market, the store. Assisted by a massive shift to digital, the industry has not however sat back but risen to meet the challenge of connecting with its customers through two of the smallest shop windows available to it – the desktop computer and the mobile phone.

Retail's Digital Challenges

"We Found You"

Here are the challenges – how to make commerce responsive, engaging and personal in the face of growing competition from more brands. Speaking at January's NRF’s Virtual Big Show, Karin Tracy, Head of Industry at Facebook & Instagram talks about the need to reverse the order of commerce to address this shift.  She suggests moving from a ‘you found me’ to a ‘we found you’ approach to customer engagement, which depends on machine learning to enable brands to operate on customers’ terms. And those terms are tough – they want excitement and novelty and shopping without friction, but they also want to know that they are doing this with brands that are responsible, sustainable and authentic. It’s a lot extra to squeeze through those two small windows. Karin calls out Ulta Beauty and Nike as exemplars of this approach.

Connected Data and Emotions

Our Co-founder and Chief Customer, Jessica Murphy, who joined Karin on the NRF panel discussion, added depth to the conversation on the challenges, pointing out that the current journey online ends at the purchase when that is actually where it needs to start.

“For 80-90% of customers, it’s one and done, you won’t see them again. If you want them to revisit and repurchase, you need to connect with them on an emotional level,” she said.

JCPenney did just that and it saw a 214% increase in revisits in just one week, but key to getting this right is connected data; data on where the friction points are, she added, challenging the received wisdom about choice:

“Endless aisle equates to endless choice which can be confusing and time-consuming for the customer where really the brand should be curating based on knowing what the customer is looking for.”

And she adds that this is very different from desktop to mobile, so that thirst for data needs to extend to understanding what people are doing outside the digital window, so brands are ready to serve in advance.

Changing Consumer Behaviors

And by people, it may no longer mean the familiar western stereotypes but the consumers from the world’s fastest growing economy, China. The Economist has already suggested that the Chinese are now the ones to watch and Kevin Jiang, President of International Business at JD.com, who joined Karin and Jessica on the panel, neatly proved that by pointing out that over the 11 days of the last Singles Day in China, $US41bn was traded online. And they are a broader set of consumers – younger, shopping not just from the urban centers but further afield, and with a thirst for luxury.

“Even niche designer brands are finding customers,” he said.

The brands are reacting to this online surge by closing their smaller stores and opening up more flagships. Jiang explains:

“On and off line are starting to co-exist; for instance, can we get new customers into a store to experience a brand for the first time and then see if they are happy to buy on line, particularly if the product is shipped from the store.”

Fashion invents and it reinvents, and it clear from our session that it is ecommerce that is driving the big changes that are bringing the store and online closer together to attract, excite and create a friction-free journey for the consumer, whatever their age or address.

Embracing digital transformation leads to improved customer experience, and therefore engagement. To learn more about tying engagement to customer lifetime value, join Retail's Loyalty Forum on April 14th - more details here (you won't want to miss it)!