One of the biggest trends noticed on the international retail platform is the increasing use of technology and multi-media to give retail a multi-pronged approach to increase sales. From times when retail was only restricted to brick-n-mortar stores for generating footfalls, business today has become multi-channel allowing the consumer to purchase when and where he wants to, which includes e-commerce, m-commerce (mobile), f-commerce (facebook), s-commerce (social) and v-commerce (video-enabled). According to reports almost 82 per cent of retailers now operate an online catalogue, which includes the biggest names in international retail ranging from high fashion brands like Burberry, Banana Republic, Gucci, Armani, Chanel; fast fashion brands such as Zara, Mango, Forever 21, New Look, Next, H&M and supermarkets like Sainsbury, Tesco, Walmart and Target.
What started with the pickup of internet as a part of a layman’s life has seen more and more consumers turning to e-retailing, which from showing small positive growth at the beginning of the year has now developed into one of the most profitable and unavoidable ways of generating sales in the fashion apparel industry. Projections claim that US online retail will grow at a 10 per cent compound annual growth rate (CAGR) over the next three years to reach nearly $ 249 billion by 2014, while online retail within the largest European Union nations in Western Europe will grow at an 11 per cent CAGR over the same period, hitting 114 billion by 2014. According to latest figures, in the UK, shoppers spent more than £ 5 billion online in the first quarter of 2011, representing a 14 per cent jump on the same time in 2010. Showing a similar growth even the Russian e-commerce market has reached 315 billion rubles ($ 10 billion) in 2011, an increase of nearly 30 per cent from 2010, while e-commerce spending in China is estimated to reach 2 trillion yuan (US $ 315 billion) by 2015, a 320 per cent increase from 476 billion yuan (US $ 75 billion) in 2010.
Hardcore e-retailers have seen continuous growth. Asos, which targets web-savvy 16 to 34-year-old women looking to emulate the designer looks of celebrities but at a fraction of the price, continued to benefit from the migration of spending from the high street to the internet. The online fashion retailer reported a 15 per cent increase in UK retail sales to £ 44.6 million in the three months to June 30 2011. Asos’s international business performed strongly, helping group retail sales to rise 69 per cent to £ 104.2 million in the three months to June 30. International sales jumped 160 per cent to £ 59.6 million, driven by last year’s launch of United States, French and German websites and now make up 57 per cent of the sales mix. Nick Robertson, the Chief Executive said: “The new financial year has started well and we remain positive in our outlook for 2012, with progress to date in line with expectations.”
Other exclusive online fashion stores that started small but are becoming more and more popular with the growth of e-commerce are Net-A-Porter.com, hautelook.com, zappos.com and gilt.com which are continuing to expand. The most recent example is of gilt.com based in the US, launching the first of its kind, standalone luxury retail site for men named, PARK & BOND in August 2011, and shipping solely to US customers since its launch in 2007, recently the company has also begun to ship to more than 90 additional countries making its operations global attracting international customers.
To tap the expanding online fashion market, even big e-commerce players such as Amazon and e-Bay are restructuring their operations. E-Bay which did not have a strong fashion presence before, launched its first fashion outlet, a virtual US outlet mall that lets brands and designers connect directly with e-Bay customers with deals direct from more than 200 brands, including Neiman Marcus’ Last Call, BCBG, and Timberland. This digital channel is built to help brands and designers sell their inventory when they lack the physical space to do so.
Today, exceeding all expectations e-commerce is undoubtedly one of the pillars to building a modern brand and a significant monetization tool for consumer web products. While overall global apparel retail is growing some 3 per cent a year, the share sold on internet is growing much more rapidly. Projections estimate online clothing share to be around 35 per cent by 2018.
Mid 2011, sitting on the laptop to shop, also became cliché, as the youth market started shopping through their mobile phones and tablets. With smart phones and other digital gadgets such as i-pad becoming a norm, from e-applications to mobile applications, brands as big as Ralph Lauren, Armani, Calvin Klein, Burberry and Dior led this segment, finding creative ways to increase footfalls on each and every medium. Developing a whole shopping experience, what brands today are trying to do is to develop the element of fun and surprise in every transaction that a customer makes, which is proving to be the real formula of success for multi channel retail.
[bleft]The new Gap iPad app features exclusive content from Gap designers which is completely integrated with mobile shopping, with all items tagged for instant purchase or sharing with friends. Users can also find the nearest Gap brick-n-mortar store with the app’s geo-locater, to make the purchase in person. [/bleft]
M-commerce itself is proving to be the fastest-growing vehicle across all channels for both generating sales to mobile advertising, with an estimated 44 billion mobile app downloads projected by 2016, through which customers can now easily scroll through the latest collections of almost every possible fashion brand around the globe through their cell phones. An added advantage to the sudden push of e-retail has been also catered by the increased use of social media sites like facebook and YouTube. According to industry reports facts like – 850 million plus people on Facebook, a massive boom in solutions to promote awareness with processes like e-mail marketing and mass mailing, and a drastic reduction in the cost of implementing solutions related to technology are altogether triggering this massive growth by making technology more user-friendly for people of all ages.
The most current and famous example of the same is of British design house Burberry which is continuing to flaunt its Autumn/Winter 2011 campaign through digital and print advertisements that display unique outfits from their line. One can also not ignore the fact that today nearly all brands even remotely associated with fashion have their own Facebook page and blogs, for personalized interactions with the masses, only to increase and develop a brand loyalty for the future.
According to the latest eCustomer Service Index (eCSI) results from eDigitalResearch and IMRG 12 per cent of social media users have been encouraged to make a purchase from a Facebook store after seeing something on the site. The results mark an incredible 8.8 per cent growth in f-Commerce in just four months as more and more retailers import their website functionality into the social networking site. The study also found that a staggering 25 per cent of online consumers now log onto Facebook more than once a day, representing a considerable proportion of all shoppers and a massive opportunity for retailers.
Amid all this, physical stores remain to be an integral part of the retail sales mix, and smartly connecting the two a further emerging trend that will reach its peak in 2012 is the concept of ‘click and collect’ where physical stores are used by shoppers as a collection and return point for online purchases. Big retailers like Tesco, New Look, Sainsbury and Ted Baker have started this service to relieve their customers from waiting for the deliveries. Visa Versa, Asos and e-Bay both online retailers are foraying into brick-n-mortar store for easy pick-up of purchases.
India with its flexibility in order sizes has been a popular manufacturing base for catalogue companies and the same is now true for online sales. For vendors the shift is not so impacting, as the only real difference is the packaging part as all other sourcing processes/steps remain the same. So while in an ordinary program for a retailer packaging is done in blister packs with a combination of all sizes or colours in the case of solids, that part of the order which is for online shopping is finished as ‘each pack’ meaning as individual packaging ready for direct delivery to customers who order online… Working with online retailers is certainly an opportunity not to be missed in the years ahead.