Retailers chewed over the challenges of multichannel at our breakfast gathering.
The multichannel shopping environment is changing consumer behaviour, and in turn, throwing plenty of challenges the way of fashion retailers. Growing uptake of non-traditional channels such as mobile, new methods of marketing and advancing in-store technology have given retailers new opportunities to develop their brand and increase their revenue. Fashion businesses are still learning to adapt to the multichannel world, but so are consumers.
Polling more than 2,000 people, Drapers’ Multichannel Report survey found that the majority of consumers (69%) use bricks-and-mortar stores to shop and research for fashion purchases, while 61% use websites for both. The study also found that only 7% of consumers prefer to use mobile sites and apps.
However, many of the retailers that attended the Drapers breakfast discussion at the Haymarket Hotel in central London, in association with Red Ant, Demandware and Fits.me, reported a rise in mobile traffic, but that the channel itself was not seeing as many sales as they would like, partly as many retailers have yet to launch a mobile-optimised site, while many consumers are reluctant to make purchases on their mobiles.
East ecommerce manager Simone Williams has found mobile traffic for the womenswear retailer has grown 160% year on year, but that converting the traffic into sales remains challenging. Yet, the traffic is helping sales on other channels.
Williams said: “A lot of customers walk into our stores showing store managers products we’ve been promoting in our emails, and saying I’d like to touch and feel and try it on. Our customers love the site, as it gives them a chance to see our whole range, but they often then go in store to make the purchase.”
A number of attendees are working on a mobile-optimised site, but for those who’ve already implemented the technology, sales are starting to come through. Dan Rubel, head of marketing and communications at Shop Direct Group’s Very.co.uk, highlighted that 18% of their sales come from mobile.
Rubel said: “The way the site operates is our number one priority. In the end you get a lot of flow to mobile without making any effort and therefore it is key that once a consumer goes there, they have a simple experience and it just works.”
The multichannel environment also delivers more opportunity for data capture. However, the majority of consumers (59%) do not like the idea of data capture being used to give them a more personalised shopping experience based on past product preferences, though more encouragingly 14% do.
The attendees agreed that retailers must proceed with caution and that the data collected has to be used subtly. Anna Bance, founder of the designer dress rental company Girl Meets Dress, underlined data’s usefulness for customer service, but retailers shouldn’t be too forward with efforts to personalise service.
Bance said: “We have live chat function on the website and all the data is live there. We don’t ship internationally yet, and we can see straight away if they are in America. They’re asking about delivery tomorrow and it [knowing their location] freaks them out a bit. So we have to be careful how we approach it. But it tells you how many times they’ve visited the site, so while helping the customer you can see that data.”
Data capture also helps target marketing emails, which drive 24% of consumers to buy items online from the retailer that sent the email, and 17% to buy in a bricks-and-mortar store. Most attendees concede that despite the opportunities provided by data capture, one-to-one marketing would be too costly and time consuming, though retailers were positive about the results personalisation can deliver.
Antony Eden, head of digital marketing for online fashion retailer Boohoo, said: “Looking at the whole data mix, such as social media, and browsing behaviour, there is a whole heap of activity we can get at, especially for us as a pure-play online retailer. Therefore we can get into some heavy segmentation so we can deliver more appropriate and timely content that consumers will find more engaging.”
In-store technology is also growing from a retailer and a consumer perspective. Our survey found consumers were mostly positive towards the concept of being able to access a fashion retailer’s website in store, as 31% thought it was a good idea for retailers that have more products online. Accessing websites within store was especially popular with younger consumers, as 78% of 18 to 24-year-olds thought it was a good idea.
For this and other purposes, many of the attendees confirmed they had tablets, mostly iPads, in store. Williams said one of the reasons for rolling the devices out across East’s store portfolio was to rescue sales potentially lost, especially for those stores with less stock to hand, by redirecting customers from the store to the website. However, the problem then is assigning the revenue to the right channel.
Hawes & Curtis head of ecommerce Antony Comyns, speaking about a trial kiosk the retailer launched in the US, said: “If someone is sent to the website then who is going to get the benefit of that; the store personnel or the website? So it is really important to give that back to the store and include it in their figures. Otherwise personnel then go, why give the sale away, it’s no benefit to us.”
Fashion retailers only began introducing iPads last year, so unsurprisingly 44% of consumers said they have never seen an iPad in stores before. However, Simon Burstein, chief executive of London designer indie Browns, hailed the devices “a good interactive tool”.
Andrew Chothia, sales director at ecommerce solutions provider Demandware, highlighted how the device can also drive incremental sales in click-and-collect areas.
Chothia said: “While you’re waiting to collect the item via click-and-collect, shoppers are then encouraged to browse what else is in the store. Combining in-store technology with click-and-collect is a good strategy.”
Our survey found that 47% of consumers do not use social networks to shop or research fashion, though 8% use them to discuss trends and 7% to ask for fashion advice. As a result, retailers underlined the importance of incentivising consumers to use social media activity in aid of their brands.
Alex Sbardella, head of mobile at digital strategy agency Red Ant, said: “With a lot of digital and technological initiatives, a lot of retailers are doing it for [their] marketing department, but they are not really making it clear to the customer what the benefit is to them to supply that lovely Facebook data or generate great content. We work with a number of national retailers, and by far the most successful promotion using mobile we’ve seen was giving away a free item when consumers checked in.”
Retailers also emphasised building a community and brand subtly before going in with explicitly promotional material. Amanda Carr, chief executive of The Women’s Room blog, cautioned that people are still “antagonistic when someone tries to sell them something” on social media and that community and trust need to be built up before brands even attempt to sell anything.
Carr highlighted Boden as a model example: “It is brilliant at Instagram, Pinterest, tweeting, and has a very strong community built already. You feel proud to be part of that community, so when it does start to sell you something, it’s more accepted.”
Delegates agreed that pin-board website Pinterest is one to watch, despite 79% of consumers saying they do not use the site and Girl Meets Dress’s Bance suggesting the website mostly drives US traffic. The social network also proved more popular with younger consumers, as 36% of 18 to 24- year-olds and 39% of 25 to 34-year-olds have accounts, compared with 92% of over-55s and 85% of 45 to 54-year-olds don’t use it.
Attendees all voiced the importance of a sound delivery proposition. In the survey, consumers’ prime concerns for product delivery were free delivery (57%) and free returns (48%). Attendees confirmed this, saying customers expect this and retailers are especially less competitive if they don’t offer free returns. However, the effect on profit margins was a prominent concern.
Burstein said: “It’s very easy to have a lot of goods arrive and you can have a nice little shopping afternoon, and then you can just send it back because it’s free. But does it make it too available? Would free returns increase returns or would those sales that require delivery go much higher if it was all free out and back?”
Many retailers believe that offering free returns reduces the risk of losing sales and in turn increases the chance of purchases, though the concern is that it also encourages consumers to order two or three sizes of the same item to guarantee the right fit, especially with exchanges. As a result, overheads, such as postage, are an issue.
However, Fits.me chief executive Heikki Haldre pointed to studies the virtual fitting room provider has carried out that indicate consumers would rather just get the product and not have to deal with the hassle of the returns process, even if it is free.
Haldre said: “People are not buying the right to return, they want to buy garments that look and feel great.”
On the overheads issue of free returns, he added: “The delivery truck goes back and forth and all these deliveries are wasted. When the return rate is say 25% [the standard rate across apparel ecommerce, according to Fits.me], then this means of 100 final purchases, you make 62% more deliveries than the number of purchases – not good for the planet or for the budgets.”