Digital Disruption in Fashion

Part 1: Customer Experience

Today, few industries face into the extent of end-to-end digital disruption looming within fashion. Multiple independent forces are combining to change the dynamic of nearly every element of the value chain. From the retail outlets and channels used to serve customers, through to the bedrock of “cut, make and trim” (CMT), everything is in a state of flux. Compounding this, the consumer of today fundamentally differs from that of yesteryear. In this world service, experiences and product all interact.

While the factors driving this disruption are all essentially a consequence of the new digital era, they are broadly driven by three overarching trends:

The New Shopper

A “hunter”, that behaves differently to previous generations of consumers. The intersection of technology, media and fashion has completely changed their process of finding inspiration. Their discovery of apparel is driven as much through recommendations on social media as the traditional seasonal campaign. And this consumer doesn’t view their experience as having clearly defined beginning or end-points. This leads to vastly different expectations of what constitutes experience / service (let alone good experience or service!) and the manner in which brands can and should interact with them at every touchpoint.

Industry 4.0 — Automation and Analytics

Fashion has amongst the most labour intensive value chains of any consumer goods industry. Pressure to minimise costs of production has led to historically appalling pay and conditions for some workers. However, recently we’ve seen some significant advancements in robotic process automation. They provide the potential to reduce labour requirements and associated costs, while greatly improving productivity. Combined with the huge swathes of data that can now be collected during production, sizeable efficiencies can be unlocked through optimising essentially every aspect of the manufacturing process. And on the front-end, the new shopper leaves a sizeable data trial, which can be leveraged to understand them better. This all translates into better experiences, which induce greater spend and retention and increased likelihood of referral.

The Rise of the Fashion Upstart

Historically low barriers to entry and sunk costs are enabling the rise of fashion upstarts. These nimbler players usually focus on one small element of the value chain, with a view to significantly push the fold and rewrite the rules of the game. They’re bringing the process of discovery to the 21st century: with visual search, virtual and artificial intelligence enabled personal shopping and remote “try before they buy” fittings with 3D visualisation. Others are enabling hyper-personalisation at an industrial scale, while others create novel means of bringing the sharing economy into fashion. While it’s true the majority of these upstarts are in their infancy, some have already had significant impact — at least in fuelling consumer expectations of retail experiences. And those at the forefront of this wave, such as Rent the Runway, already have significant customer bases and revenues.

The combination of these forces is creating impetus for industry incumbents to re-examine existing business models — in the context of a new world and updated competitive landscape. Some see obstacles to the traditional means of operation; I see opportunity. Lots of it. There’s huge potential to innovate, creating differentiated offerings and truly sustainable competitive advantage. Potential spanning back, middle and front-end operations. Today, we’ll look at the front end, particularly Customer Experience. Ample opportunities already exist — and for those brave on their innovation voyage, huge opportunities lay beyond the horizon.

Customer Experience

The notion of the standalone channel has long been dead to today’s shopper. They’re empowered, connected and expect frictionless retail experiences — be it via bricks and mortar, the connected device or social media.

Now, I know the notion of omni-channel retail is far from new. However, many retailers still encounter immense difficulty in delivering any meaningful omni-channel experiences. And it’s the delivery of experiences — not additional channels to shop from — which are crucial to leveraging the opportunities available. This difficulty is driven by one primary factor: the non-linear navigation through these channels any one consumer can take.

To provide congruent and, more importantly, personalised experiences, retailers need to be bold and innovative. Think about every opportunity; how each touchpoint links to another. The mobile in a customer’s pocket’s isn’t just something they shop on — it’s something they shop with. And that individual has a set of emotional needs: an innate desire to feel special, part of a wider community and valued. Retailers must bear this in mind and design consistent experiences which are channel agnostic and context optimised: #seamless

Let’s start with a customer’s process of inspiration, browsing and discovery of apparel:

It may begin with a personal recommendation. It could be a retailer’s social media account — or that of a key influencer, celebrity or blogger. Perhaps it’s avisual search for a more accessible version of a luxury item they’ve seen. The process may conclude in store, or a site / mobile app. It may start there.

Yep. The process is non-linear — but a retailers job is to provide an innovative, yet seamless path from inspiration to purchase. Identify elements of overlap between content and commerce and leverage these. By conveying lifestyle and community, you provide non-purchase attainability to your brand experience and a basis to merge digital and physical touch points. Customers may want to take this personal brand experience a step further and personalise their apparel prior to considering purchase (albeit the ability to sustainably achieve this is highly dependent on your production processes). If it’s a requirement (or a decent value add) within a key and important sub-category — e.g. accessories — let them.

The outcome of this activity will be a widening of the top the purchase funnel and the creation of greater affinity towards the brand. The latter increases the ability to convert. Plus, the wealth of customer data accumulated enables further augmentation of customers experiences.

Now for a renewed focus on physical retail environment. The shift in function from predominately product discovery towards experience fundamentally changes its strategic role.

Firstly, let’s explore how customers will expect to shop in store.

Imagine a future where a customer walks into a store and is welcomed by shopping assistants — then notified via the retailers iOS app items they’ve recently browsed but not purchased are available in that store. That is the future. Customers will want to feel known and be engaged.

Retailers will be expected to reduce friction and make their customers lives easier as they roam in store. Features like “in-store modes” and maps on apps could facilitate this. They also provide retailers the opportunity to positively surprise customers by providing tailored location based recommendations and personalised discounts. And to collect ample data about how customers actually navigate stores.

This empowered customer will expect to look through stock room inventory on their device, and automatically request the size they need be brought out to the shop floor. When it comes to closing their purchase, they’ll expect to be rewarded, with their desire for recognition and distinction to be fulfilled. Think simple: social media check-ins, digital receipts with share options and — God forbid — geolocation filters on Snapchat. You leave them happy, much more likely to return and much more likely to refer: #advocate

The second element to consider is the overarching purpose of the store itself.

It’s time to look beyond location and square footage. Store plans should be designed to accurately reflect the manner in which customers actually shop them. Square footage should be utilised to deliver immersive experiences. In luxury environments, there’s an opportunity to augment experiences by placing additional emphasis on the “forgotten senses”: smell and taste.

Where there is ample square footage to play with, the doors are flung wide open for innovative in-store experience experiments. The approaches are plentiful and dependent on brand image / customer preference. For some, it may be a cocktail bar or beauty salon; for others it could be pop-ups with complimentary brands / products. How about meet and greets with designers and other brand affiliates to reward the most loyal customers?

Regardless of approach, these environments must be equipped to position shopping as a leisure activity and align the available offerings with customer’s broader goals and way of living.

Retail is detail. In order to succeed — and potentially survive in the longer term — many fashion retailers will need to completely re-examine their end-to-end experience. They need to invest in the retail technology which will enable them to deliver exceptional experiences across the entirety of their customer journey’s. And they need capture data at each stage which can be redeployed to recognise each customer’s individuality and improve experiences on aggregate.

Differences in retailers’ propensity to do this lead me to the following conclusion: the spectrum from bad to good experience will rapidly widen over the coming years.

Some “leaders” will race ahead by innovating, taking competitors market share with them and redefining fashion retail; a class of laggards will be left behind, still struggling to serve you an mobile-optimised site, enable click and collect or even return online deliveries in store: #lame