Fashion brands are striving to stay competitive in these times of rapid changes as fashion’s future is increasingly woven into the digital world. To thrive in times of disruption, fashion brands need to focus more on online sales. McKinsey’s 2021 State of Fashion Report shows that 70 percent of fashion executives believe that e-commerce is the future of fashion.
Fashion brands are striving to stay competitive in these times of rapid changes as fashion’s future is increasingly woven into the digital world. Fashion brands are almost unanimous in their belief that e-commerce is the key to thriving in times of disruption. McKinsey’s 2021 State of Fashion Report states that 70 percent of fashion executives expect a growth of more than 20 percent in their ecommerce channels. E-commerce is hailed as “the largest opportunity” by leading fashion experts around the globe. Physical retail is suffering as brands race to establish themselves in the digital world. In Europe, sales of offline stores are likely to drop 8 to 13 percent compared to 2019. U.S. sales will also be down 22 to 27 percent.
Despite the decline in offline sales for fashion brands, they still value their retail footprint. Laura Pomerantz is a Forbes contributor, retail real estate expert, and retail strategist. She says physical retail remains crucial to a brand’s growth strategy. Pomerantz says that investors are demanding retailers to reassess real estate in order to maximize space. How can fashion brands maximize their retail space in an age when online sales are a greater part of the business?
Focus on Omnichannel Customer Experience
In the past, the success of a retail shop was determined by how many products were sold inside its four walls. In the 1990s, the Internet expanded, and brands realized that they needed to create more channels for customers to purchase their products. This included online stores. Brands gave customers the choice to shop on their preferred channel through the multichannel experience.
Once customers select their preferred channel, brands optimize the shopping experience in that channel to increase engagement. The fact that customers had multiple channels to choose from was not enough for them. Multichannel approaches treated channels as separate silos and limited the ability to increase engagement across channels. Brands shifted to an omnichannel strategy, allowing them to integrate multichannel processes and offer more personalized offers, messages, and products.
Fashion brands need to drastically increase in-store integration of omnichannel because consumers must have a compelling reason for shopping offline. Fashion brands must give consumers a compelling reason to visit retail stores. Consumers are used to shopping online for a variety of products. McKinsey describes in-store omnichannel as “table stakes” for the next phase of the industry’s growth. According to a survey conducted by the United States apparel executives, 76% plan to improve their omnichannel integration. Fashion brands need to consider these factors in order to accelerate the integration process.
Reconsider the role of the store. Fashion brands must consider that consumers need more than just a transactional store to encourage them to visit. Stores should instead improve the way consumers discover products while in-store. This discovery process for products could include more exclusive merchandise (e.g., through “in-store only” purchases). Exclusiveness for the consumer could also mean reducing retail space. This may provide a more unique shopping experience.
2. Maximize in-store pickup. – Customers are demanding more contactless fulfillment, and stores play an important role in fulfilling these requests. Including options such as curbside pickup or in-store pickup from an online order can improve omnichannel integration and allow a more personalized shopping experience for customers since sales associates can engage with customers at pickup.
3. Personalize in-store touchpoints for consumers. – Store associates should have access to customer data such as loyalty and purchasing behavior to capture customer attention prior to their in-store visits. Important customer data acquired before their in-store visit can help with a more personalized product discovery process that begins online but finishes in-store, thus creating a more integrated shopping experience.
As fashion brands take these practical steps towards in-store omnichannel integration,
they will need to continuously re-think their store footprint to adapt to today’s sophisticated and ever-increasingly complex consumer. If fashion brands properly adjust to their consumers, they can persuade online-first customers to buy more and make additional in-store purchases.
Production Plan with Your Manufacturer to Get More Out of Your Retail Space
How should fashion brands design their supply chain processes to support omnichannel optimization?
Furthermore, how can brands integrate digital innovation in the supply chain design process and accelerate these decisions?
When working with the predictive methods that help make these accelerated decisions, fashion brands should consider shortening the planning cycle and partnering with smaller manufacturers. In doing so, fashion brands can make themselves agile enough to respond to rapid industry changes and better inform which sales channels to focus on.
Not to mention that smaller manufacturers are often more amenable to a fashion brand’s changes in production planning, particularly because smaller manufacturers focus more on quality standards than volume quotas. Additionally, smaller manufacturers maintain a relatively insular network of highly-vetted suppliers and other manufacturing specialists; in building partnerships with smaller manufacturers, fashion brands access such insular networks and a more collaborative culture since smaller manufacturers maintain a network built on both vested and personal interests. Therefore, these smaller manufacturers can play a critical role in a fashion brand’s manufacturing success because they offer brands more personalized solutions, show more willingness to go the extra mile, and even troubleshoot with fashion brands to find potential manufacturing solutions.
To effectively plan production with manufacturers, especially in the fashion industry’s rapidly changing environment, fashion brands should make efficient use of important customer information. Considering that the core of the omnichannel approach prioritizes the customer rather than the product, fashion brands should ultimately remember to put their customer’s needs first. Fashion brands should maintain an exceptionally detailed understanding of their customer’s needs, both now and in the future. This clear understanding plays a critical role in achieving omnichannel excellence, as customer information will help fashion brands decide which channels to serve, which products to serve, and where to offer them. According to a McKinsey report on the future of retail operations, this important customer information “should be combined with customer behavior insights culled from customer interviews, observations, and the latest research from market experts, as well as analyses of competitors’ e-commerce offerings.” By harnessing this multidisciplinary analytic approach, fashion brands can gain a clear understanding of customer expectations, anticipate their changes, and respond accordingly, all without running up against tightening online privacy regulations.
