With an estimated worth of $3 trillion – that’s 2% of the world’s GDP – it’s fair to say that the fashion industry is thriving.
Split by category, ladieswear leads the way, being worth $621bn, followed by menswear on $402bn. Sports footwear, meanwhile, makes up a tidy $90.4bn. The luxury fashion leader, LVMH (Louis Vuitton Moët Hennessy), raked in €42.6 billion in 2017 in 2017 alone.
It doesn’t seem like the growth of the fashion industry will slow down any time soon. Projections suggest a rise of 9.8% per year, meaning fashion will reach a market size of $835.8 billion by the end of 2023.
It’s not just fashion at large that’s booming but the world of ecommerce too. In 2018, online fashion stores accounted for approximately 20.4% of the total fashion retail sales in the US. ASOS alone has a market value of $6.2 billion and is now the fourth largest company in the UK.
What does the fashion industry landscape look like?
Despite the positive outlook, the fashion industry is in the throes of some volatile shifts. In such a competitive and saturated landscape, it can be difficult to cut through the noise and gain the trust and loyalty of an active and engaged customer base.
Larger corporations like Amazon are eager to take a slice of the fashion ecommerce pie too. In 2017, Amazon launched its own clothing brand – Find – to prove it can take on other deep-rooted brands such as John Lewis and Next.
At the same time, shoppers are filtering through the barrage of choice available to find hidden gems. They want – and are willing to pay for – curated looks and are happy to take the time to hunt for the right products to achieve them.
Beyond leaving their loyalty at the door to find brands that meet their desires, fashion shoppers are also becoming more mindful with the brands they choose to shop with.
The collapse of Rana Plaza in Bangladesh and the subsequent establishment of the global “Fashion Revolution” movement have brought to the average consumer a greater awareness of just how damaging fast fashion is to the planet and society. As a result, these shoppers are demanding that their clothing is made in a safer, cleaner and fairer way.
To differentiate, fashion retailers must meet these challenges head-on.
Four strategies to stand out and shine
So what’s a merchant to do when faced with market fragmentation, demand for unique products and rising pressure from shoppers for brands to use ethical manufacturing processes? Here are some good places to start:
- Reward loyalty
- Build a community
- Personalise the shopping experience
- Find your unique voice
1. Reward loyalty
LoyaltyLion research shows that, on average, over 53% of a store’s total revenue comes from only 20% of its customer base.
In a fiercely competitive industry like fashion retail, retaining loyal customers should be a priority for online-first brands.
A simple way to increase your retention rates is to make your existing customers feel valued and appreciated; these customers are the ones who will tell others about their experiences with you and will convert their friends and family into your next set of loyal customers.
Try placing these VIP shoppers in an exclusive tier in your loyalty program where they can redeem points for rewards.
Using your loyalty program to reward these stand-out customers is crucial. These are the shoppers who purchase from you often and have high customer lifetime value. Treat them well and give them a reason to return to you.
2. Build a community
Fashion shoppers are becoming ever more mindful of where they spend their money.
Today’s shoppers are becoming pickier with the brands they choose to identify themselves with. According to the 2017 Edelman “Earned Brand Study”, 65% of consumers buy on the basis of their beliefs and 57% are buying or boycotting brands based on the brand’s position on a social or political issue.
Independent retailers, therefore, need to leverage their unique brand identity to connect with shoppers who are looking for a community they can belong to.
Use your loyalty program to position yourself clearly and showcase your brand identity. Try sending personalised welcome emails that highlight your core business values. Aligned customers will feel as if they have found their niche and be excited to engage with a brand that shares similar a worldview to them.
3. Personalise the shopping experience
According to data presented by Nosto at a Growing Your Online Funnel Webinar, personalisation is key in ecommerce growth.
As many as 43% of purchases are influenced by personal recommendations, while 75% of consumers prefer brands to personalise their messaging and offers in accordance with the unique data they possess.
By tracking user behaviour on-site and through brand communications, fashion retailers can highly customise an individual’s online shopping experience. You can present the shopper with recommended products based on page views and items similar to the ones they have purchased previously.
Catering the shopping experience to the customer makes it easier for them to access products they will like and keeps them clicking “add to basket”.
4. Find your unique voice
In such a saturated market, it can be hard to differentiate yourself from the competition. Setting yourself apart in a busy online world is massively important – so you take every opportunity possible to share your own unique story.
At every touchpoint, your customers need to understand exactly who you are as a business, from the products you sell to the values you stand for.
To build trust between your brand and your customers, utilise your loyalty program to communicate your brand story and the values you share with your customers.
According to Harvard Business Review, 64% of customers cited that the main reason they have a relationship with a brand is because of shared values. Take the time to forge an emotional connection and watch as your shoppers keep coming back.
Strut your stuff
With worldwide revenue from fashion ecommerce expected to rise to $712.9 billion by 2022, it is no doubt a thriving industry, but the challenges are still plenty.
From market fragmentation to the rising pressure from shoppers it could seem daunting. However, by focussing your sights on loyalty, you can get ahead of the curve and reap the rewards of stronger relationships with your fashion-forward customers.
Managing your program
