Heavy discounting on the high street and poor customer service dented online fashion sales in April, according to mail-order specialists.
According to data from the IMRG Capgemini e-Retail Sales Index, online fashion sales in April rose 17% on last year, but fell 2% month on month.
Etail trade body IMRG’s chief executive James Roper said high street discounting and poor customer service had hit some of the phenomenal growth experienced by clothing etailers in recent months. “One of the great things about online is the pricing, but the high street players have been very aggressive on pricing, which has hit the online market,” he said.
The head of one clothing etailer agreed: “March and April have been a bit slower in terms of growth. There was lots of discount activity on the high street in April, which might have affected online fashion sales.”
Young fashion etailer Asos increased its sales by 104% to £165 million for the year to March 31, but since the year end sales have slowed slightly, rising 80% in the four weeks to April 24. Asos chief executive Nick Robertson said: “We are not immune to the prevailing economic conditions. However, as widely reported, younger fashion is proving more resilient.”
According to the IMRG’s quarterly customer satisfaction survey, satisfaction with online clothing retailers had dropped 2% since November 2008.
“The customer expectation of ecommerce is that it rapidly changes and evolves, but much of this investment has stopped since the recession. Many online retailers are being slow to invest to keep
up with customer satisfaction,” Roper said.
He added that etailers and retailers with transactional sites needed to invest in back-office and logistics functions in order to claw back previous growth levels.
The boss of one clothing etailer said the sheer rate of online growth had put pressure on back-office functions for some retailers. He said: “Online businesses which have grown at a phenomenal rate in previous months have got to manage the risk of growing at such a rate.”
However, Roper said the etail bubble had not burst, and the fall in sales for April was merely a blip. He added: “I don’t see a significant downturn in ecommerce growth for a few years yet. The current pricing on the high street is not sustainable.
“The bottom line is online fashion players are defending better margins, and not having to stoop to the disastrous price drops seen at some high street players.”
How to click with your online customers
Retail consultancy Transaction Partnership director Steve Goodheart’s top tips for improving customer service online:
- Promote your offer effectively online - publicise the full offering prominently
- Offer as much online as you do offline, like order tracking and easy return procedures
- Manage customer expectations - be realistic about what the transactional site can offer. If it will take 24 hours to respond to an email enquiry, let the customer know
- Clearly signpost online help
- Offer real-time interaction or instant phone and email responses