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The relatively slow penetration of global apparel behemoths in the online space has left the playing field open to small fashion start-ups. These leaner, swifter and highly innovative enterprises have the potential to be gamechangers. According to London Startup Weekend, summer 2013 saw over £347 million invested in fashion tech startups.
Held in the city at the nexus of fashion trailblazers and digital innovation, Euromonitor International visited the London Startup Weekend Warm Up Day, an introductory event to the Startup Weekend, involving discussions between fashion and technology professionals and entrepreneurs, to learn more about the future of omni-channel retailing and where future opportunities lie.
One Story, One Journey
A key topic of the day was ‘omni-channel’ retailing; a term that has become ubiquitous in the strategies of all apparel brands. Panellists explained that omni-channel retailing is all about understanding the customer journey. It is an area which is still being explored, with no established playbook. The rules are still being written, but the most important point is that each piece of the omni-channel puzzle should connect to provide a single narrative. Online and in-store should not be treated as different parts of the business.
With mobile and tablet usage on the rise, it is not just about being online, but being available to the consumer wherever they may be. At the same time, omni-channel should be about telling a story, rather than being present across all platforms at all times just for the sake of it.
Furthermore, it is important to know when to jump in on a customer’s journey at the opportune moment. Kate Spade Saturday’s digitally enhanced windows in Manhattan were mentioned as a great example of this. The shoppable storefronts, launched in association with eBay, are designed to fit the lifestyle of the brand’s target girl. She can browse and buy on screen, and have the products delivered to her wherever she may be, within an hour.
Panellists emphasised that technology must be understood as just another conversation with the consumer. In this day and age, consumers are ahead of brands. The brands no longer hold the power to dictate, so the way brands engage with consumers can no longer be a one-way stream.
According to Pia Stanchina, Brand and Relationship Builder at Google, the average amount of time a UK woman takes to buy a fashion item from the moment she first sees it is 28 days. She may see something she likes, look for it online, go to the store to try it on, buy it, see another variation she likes on Pinterest, return it, etc. Hence, the consumer’s purchase intent can be swayed at every touch point.
Showrooming – a Push for Innovation
The general consensus was that retailers should not treat showrooming as a threat. It is evident that the physical store will never vanish, but its reason for being is certainly changing. In fact, pure-play online start-ups like Everlane and Warby Parker now have outlets specifically for showrooming, which enable consumers to come in, try and feel products, but then purchase them online.
The fact that showrooming gets consumers through the door in the first place should not be overlooked. Traditional store-based retailers need to be innovative to make the sale, by offering more in-store than simply a route to purchase. If price comparisons is the challenge, implementing price flexibility and on-the-spot offers could be a possibility. If consumer impatience is the challenge, changes to the shopping process could be in order.
The Store of the Future
Looking to the future, the panellists heralded that further innovation will come from understanding where the cycle is broken. For example, Nicola McClafferty, CEO & Co-founder of Covetique (described as “Net-a-Porter meets eBay”), came up with the idea for the Covetique site after observing the success of peer-to-peer holiday car and house rentals. For many women, their wardrobe is a valuable asset, which they want to capitalise on, but eBay is not the most suitable platform for selling designer goods.
Bridging the conversation between online and in-store remains untapped territory. Online shopping is a much more solitary experience, but it facilitates extensive data collection and customer segmentation. In-store selling limits the potential for gathering such information.
There is also room for innovation in payment and delivery. It is important to pay attention to the ‘before’ and the ‘after’ purchase, and owning every part of the supply chain makes the consumer experience more seamless. In terms of after-sales service, there is no Apple ‘Genius Bar’ concept for the fashion industry, which could be beneficial, particularly for luxury brands. Malin Posern, Senior Associate at Index Ventures, mentioned how, for pure play online retailers, the only personal contact with consumers is upon delivery, hence offering potential to make this part of the consumer experience more appealing.