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. In this manner, almost everyone agrees that brands need to focus more on ecommerce in order to survive 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 a key part of a brand’s strategy for growth. Pomerantz says that investors are requesting retailers to reassess the real estate they have in order to maximize space. How can fashion brands maximize their retail space in an age when online sales are eclipsing in-store sales?
Focus on Omnichannel Customer Experience
In the past, a retailer’s success was determined by how many products they sold in their retail space. 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, which allowed brands to integrate multichannel processes and offer consumers 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 growth in the industry. 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 consumers may also be achieved by reducing the retail space.
2. Maximize in-store pickup. Consumers increasingly demand contactless fulfillment, and stores play a crucial role in the process. Include options like curbside pickup and in-store pick up from an online purchase to improve omnichannel integration. This will allow for a more personal shopping experience since sales associates are able to engage with the customer at pickup.
Personalize the in-store experience for consumers. Store associates need to have access to data on customers, such as their loyalty and purchase behavior, to attract attention before they visit the store. Customer data collected before an in-store visit will help create a more personalized shopping experience that starts online and ends in-store.
Fashion brands are taking practical steps to omnichannel in-store integration.
They will have to constantly re-think the store footprint in order to adapt to the sophisticated and increasingly complex consumer of today. Fashion brands that adapt their products to the needs of consumers can encourage online-only customers to make more purchases and visit stores.
Create a production plan with your manufacturer to get more out of your retail space.
How can fashion brands optimize their supply chains to maximize omnichannel sales?
How can brands accelerate the process of integrating digital innovation into supply chain design and integrate it into their decision-making?
Fashion brands can shorten the planning cycle by partnering with smaller producers and using predictive methods. Fashion brands will be able to react quickly to industry changes by partnering with smaller manufacturers and shortening the planning cycle.
Smaller manufacturers are more flexible to changes in a fashion brand’s production plan, especially because they focus on quality standards rather than volume quotas. In addition, smaller manufacturers have a network of suppliers and manufacturing specialists who are highly vetted. Fashion brands can access these insular networks and their more collaborative culture by building partnerships with smaller manufacturing companies. Smaller manufacturers have a web-based on personal and vested interests. These smaller manufacturers are, therefore, crucial to a fashion brand’s success in manufacturing because they provide more customized solutions, go the extra mile, and can even troubleshoot together with brands to find possible manufacturing solutions.
Fashion brands must make the most of customer data to plan with manufacturers effectively, especially given how rapidly fashion is changing. Fashion brands must remember that the omnichannel strategy puts the customer first, not the product. Fashion brands must maintain a detailed understanding of the needs of their customers, now and in the future. Fashion brands need to have a clear knowledge of their customers’ needs to achieve omnichannel excellence. This information helps them decide what channels and products to use, where to sell them, etc. McKinsey’s report on retail operations states that this information should be combined with insights from interviews with customers, market research, and observations of competitors.