Fashion retailing in an omnichannel world
How can retailers improve the experience for consumers when shopping for fashion?
The fashion arena has been one of the most disrupted retail sectors in recent years, shaken up in large part by smart pure-plays, innovative start-ups and developments in fulfilment. As a result, apparel retailers are constantly evolving to develop offerings that not only meet but exceed customers’ expectations.
It’s no longer just about offering the latest ranges at the most competitive prices – fashion retailers need to consider their end-to-end service, offering fast and efficient delivery as well as speedy returns to keep up with today’s omnichannel consumers. They need to have mobile-optimised sites, be on top of developments in technology and offer all the latest services such as click-and-collect.
Add that to the rise of events such as Black Friday and all of its subsequent delivery and fulfilment problems, and you have even more disruption in an already changing sector.
Retailers have a lot to think about.
When it comes to considering how to improve customers’ experience when shopping for fashion, first understanding consumers’ priorities is essential – their wants, needs, pain points and objectives.
So what are the most important factors for consumers when it comes to fashion purchases? How do these differ online and in store? And what role does technology play in this constantly evolving path to purchase?
Retail Week and Microsoft polled 1,000 consumers to give retailers a unique insight into this evolving, exciting and fast-paced sector. In this guide, we aim to help inform retailers how they can improve their customers’ experience when shopping for fashion and, ultimately, gain specific insights that allow retailers to target a greater share of the fashion wallet and deliver amazing customer experiences.
CHAPTER 1
THE GENERAL MOOD
During the early part of 2015, there have been some positive indicators of increasing consumer spend for retailers
Footfall in January jumped 2% – the first time in a decade that a January increase has been recorded at non-food stores throughout the country. The Consumer Prices Index fell to 0.3% in the same month, the lowest since records began in 1988, which should be positive for consumers’ purchasing power, while retail sales in December rose 4.3% year on year.
34%
The percentage of consumers who spend between £50 and £100 a month on fashion
How this positivity translates into consumers’ fashion spending habits is more complex. More than half of those surveyed say they spend more than £50 a month on fashion, with 34% spending between £50 and £100 a month in this sector. But that still leaves 43% who only spend between £10 and £50 a month on fashion shopping.
This doesn’t mean consumers aren’t buying; instead there are more options now than ever before for fashion and budget-conscious consumers. The impressive growth of value fashion giant Primark, which reported a sales increase of 17% in 2014, and the strong results at designer discounter TX Maxx last year are two indicators that discount fashion is winning consumer spend.
Consumers discuss their fashion spending
Both Primark and TK Maxx increased their retail space in 2014, and Primark in particular has been on an aggressive expansion drive that shows no signs of abating in 2015 as it plans to open stores in the US this year.
Age versus spend
Despite the overall increasing positive economic indicators, things are still difficult for 18-to-24 year olds. According to ONS data, a larger proportion of this age group are out of work than any other age group, and a study by banking group Thinkmoney last year found that young people have the least disposable income, with 18-to-25 year olds averaging £174.20 a month, 22% below the overall UK average.
Primark plans to open stores in the US this year
This has hit some young fashion retailers hard – this year already Bank has collapsed and USC was bought out of administration by Republic.com.
The fortunes of the youngest consumers are in contrast to those just above them in age. According to our research, of the nine respondents that say they spend more than £500 a month on fashion, eight are from the 25-to-34 age range, suggesting certain consumers in this age group have large disposable incomes that they enjoy spending on fashion.
£10-50
The most common category for fashion spend a month in all regions except Northern Ireland, where the most popular category is between £100 and £150
The regional breakdown of spending habits offers some surprising insights too. The most common category for fashion spend a month is between £10 and £50 in all regions except Northern Ireland, where the most popular category is between £100 and £150, with 28% stating this is their average monthly spend on fashion.
Northern Ireland was among the strongest performing regions for increased footfall in January, with year-on-year retail growth up 3.3%, according to figures released by Ipsos Retail Performance, showing this positive consumer sentiment reflected in increased activity.
The Northeast shows the most conservative spending habits, as 59% chose the lowest monthly spending bracket, while the Southeast is not the high spending hub it is often portrayed as, with 46% stating they spend between £10 and £50 a month.
It is fascinating to see the changes in the fashion sector through the growth of innovative new organisations, and the impact smart technologies and changing customer buying habits are having on the sector
Mike Lynskey, Microsoft
For most at least, spending on fashion is not considered essential. Indeed when asked about the factors that affect how much they spend on fashion every month, our surveyed consumers have some interesting responses. They vary from the unsurprising “cost”, “disposable income”, “Sales”, and “need” to the more unusual “losing weight”, “if I need cheering up” and even “my wife”.
Many others note that seasonal changes, style, fit, special occasions, fashion magazines, latest trends, celebrities and friends also influence their level of spending on fashion items.
The research shows no gender bias towards fashion spend either, with male and female respondents showing very similar overall fashion spending tendencies.
