Is retail out of fashion?
Whether online or off, experience is key for customer-centric fashion brands, finds Sarah Kempson, but intense interest from global players is putting the locals under even more pressure to evolve.
The retail landscape changes almost as often as the fashion scene does, each season bringing with it an enduring movement that evolves into the next, new trends to follow and styles to mimic. Social media and the growing demands of customers in the online sphere are destined to be the defining retail trends of the decade. In an industry built with bricks and mortar and the tactile nature of the product, however, what does the future hold for the Australian fashion retailing scene?
The shopping experience has changed dramatically over the past decade. Australian retailers need to compete with global conglomerates that have the power of an international marketing campaign behind them, in addition to bigger budgets, wider reach and, in turn, stronger demand. But in order to create a point of difference, they can be savvy and creative. Many retail experts debate the pros and cons of the store experience versus the online one, while brands often opt for tried and tested means of selling, too afraid of failure in this new retail paradigm.
The disruption is just beginning
Martin Raymond, strategy and insight director at the UK-based Future Laboratory, believes too many fashion brands are not learning from the mistakes of other retail-based industries, like music and travel, in order to evolve and survive online. “Retail hasn’t seen anything yet. If you think about Jessops, a big camera company in the UK, Blockbuster, HMV, the music video, lots of bookstores closing. Because all that can be downloaded will be downloaded. That’s the difference. And why, therefore, would a person go to the store if they want something that is just going to sit inside a box?”
This will be the difference for the fashion industry. While many Australian retailers are focused on their stores, as opposed to focusing on an integrated brand experience, a rapidly increasing number of international fashion retailers are opting for an online presence that involves Australians shopping from the comfort of their homes. Be it those who are time-poor or simply prefer the convenience, is it any wonder bricks-and-mortar stores are struggling? Raymond questions those Australian fashion brands that are slower to adopt online retailing and are continuing to invest in bricks and mortar, believing most retail stores today are ‘rubbish’ and the most important thing to focus on in 2013 is the online presence.
Asos.com launched its dedicated Australian store in September 2011 and is one example of a strong online shopping experience that local fashion lovers have embraced.
Sally-Anne Newson, Asos’ Australian country manger say, “Australia is a great market for us. Since launching we have been the number one most visited retail apparel site in Australia, according to comScore. We are currently selling something every six seconds to an Australian customer, which equates to around four jumbo jets of product being flown to Australia each week.”
With figures like this, it’s obvious Australians, now with the ability to access international fashion at a good price thanks to the strong Aussie dollar, have the disposable income and desire to spend it. They are not afraid of shopping online as a means to obtain a great customer service experience, be it offering free and fast delivery, gifts with purchase or the suggestions of complimentary items without a pushy salesperson.
Asos has specifically tailored its shopping experience to the Australian audience with items listed in Australian dollars, seasonal launches to suit our hemisphere, an exclusive edit in late 2012 and local returns for faster turnaround. It even has a dedicated domain, Asos.com.au, which links back to the international site. These strategies have been a huge success for the brand and proof that a personalised shopping experience with an understanding of the global market can make a difference to a local customer.
Without a storefront anywhere in the world to test its product, the Asos model is unique. Locally, TheIconic.com.au launched in October 2011, with a similar online-only strategy. Its point of difference lies in creating its own online media entity with regular fashion edits, newsletters, a print magazine and online customer service representatives to assist with anything from styling advice to delivery queries. The Iconic has made a name for itself not only for its online fashion store, but for creating an integrated brand experience that goes beyond simply selling clothing.
Big fish coming to a small pond near you
Many brands have adopted the opposite approach, moving from bricks-and-mortar stores to the world wide web. The Australian public, while seemingly comprising keen online shoppers, also experiences the tyranny of distance when it comes to shopping online for overseas bargains. Just try to return something that doesn’t fit or order something for a special occasion only for it to arrive the day after the event.
With the arrival of global retail chains Zara and Topshop, the Australian shopper is spoiled for choice when it comes to accessible, up-to-the-minute fashion. Yet Zara is still yet to offer Australia as a location when visiting its official website. Likewise, Topshop, which has introduced free shipping to Australia, is still yet to tailor its offer to shoppers down under or even show a currency conversion to Australian dollars. The Zara and Topshop physical stores are not unique – they are mirrored around the world, identical stores offering nothing more than a place to touch the merchandise. They are the McDonald’s of fashion, if you will: a consistent experience the world over.
As Uniqlo and H&M announce their imminent arrivals on Australian shores (Uniqlo in Melbourne, and H&M touted for early 2014 with debate still ongoing as to whether Sydney or Melbourne will be the launch city), and River Island localising its website and scouting for physical locations, we can be sure Australian fashion devotees will again jostle to be the first through the door, but the lack of online engagement with Aussies by many of these particular brands remains. As yet, there is no Australian option on the H&M site.
When these international brands are considering the allure of setting up shop in Australia, it stands to reason the only motivation to visit these stores is the power of the international ‘it’ factor. Their offering is not dissimilar to High Street retailers here, yet they command far more attention and demand.
The battleground will be ‘experience’
For local Australian fashion brands to compete with global retailers, the importance of a unique brand experience – both in store and online – is paramount as a point of difference. “Whether your customer comes to your shop through a [browser] window or a door,” Raymond says, “they are still coming to your store, and here is where the importance of being real, transparent and trustworthy is of the utmost. The customer wants to be made to feel good about buying your brand – what will you do to enhance this experience?”
Quynh Mai, director of the US-based content and digital marketing agency Moving Image and Content, has spoken of the compelling experience fashion brands must invest in if they want customers to think of them outside of getting dressed in the morning. At this year’s L’Oréal Melbourne Fashion Festival, Mai suggested that, in order to stay relevant and succeed in the fashion industry today, brands must become media properties themselves, working across social platforms to promote and market what they do. “The consumer doesn’t necessarily want to see advertising campaigns anymore. They want to be informed, entertained – it’s not about being sold to, but about creating curiosity and interest,” she tells us.
While bigger retailers have budgets for integration of this kind, many smaller outlets are choosing to remain solely online, focusing on getting it right before launching any kind of print campaign or bricks-and-mortar presence. This leads to various other dilemmas like distribution channels and ROI measurement, but Mai says if a consumer sees something they like, they will find it. “They are very savvy online, hunting and gathering for what they need.” Local retailers such as Sportsgirl are also savvy in this space, bringing the traditional store experience to life with exciting visual merchandising, a dynamic instore experience, exceptional customer service and an online presence that excites and engages its customers. These are the kind of retailers, Mai says, that are focusing more on the entertainment value of online, rather than information. And it works.
“They’re really taking risks. They’re really trying new things, experimenting, being creative,” she says.
Learning to talk anew
Peter Williams, head of Deloitte Australia’s Centre for the Edge, echoes these sentiments, maintaining that the fashion industry as a whole needs to experience a shift, moving from the traditional marketing angle – fashion festivals, shows, trade media events – to more ambient content, where the customer becomes the focal point and can contribute themselves. Williams highlights the two-way content model as the most significant change the fashion industry needs to embrace. Posting images of models wearing a new season collection and having ‘likes’ and followers on social media is no longer enough to gain cut-through in a crowded marketplace. These brands must better understand their customer and integrate their content with a lifestyle, asking customers to post images of themselves in the clothes, encouraging the sharing of favourite pieces and giving fans the opportunity to make suggestions about styling and accessories. Brands can no longer think of themselves as only pushing the content that is polished and ‘market ready’. Customers want to feel like they are a part of the process with access to behind-the-scenes experiences, exclusive images and interviews, together with the opportunity to contribute all being part of the push-pull marketing model that supports the two-way conversation. It also supports the entertainment-information balance of social media – something many industries are still yet to understand properly.
On a global scale, Australia impresses its international competitors with its citizens’ use of social media and smartphones; however, it appears its retailers are not so quick to catch up. While they no longer view ecommerce as a threat, they still lag behind in terms of online integration and, Williams says, it’s starting to show.
“What I’ve been saying to a lot of people who have bricks and mortar retail is to start thinking about the customer experience: when I go to a shop and I can’t get connection on my mobile, I can’t use Wi-Fi. To me, Wi-Fi is as basic a service as water.”
The idea that the customer wants to share your brand and your products with their friends is still viewed as a negative one by many retailers, believing that someone snapping a photo on their smartphone is trying to steal an idea or a design, or find it for a lower price online. In 2013, however, this kind of money-can’t-buy marketing is a part of people’s lives and the notion of sharing with friends for a second opinion or to say ‘I think you’d like this’ is simply the way customers are evolving the modern shopping experience. It is also basic word of mouth promotion, the most organic, cost-effective form of marketing.
Williams says this fairly simple idea of bringing technology into the store, such as Wi-Fi and iPads for photographs and sharing, enhances the bricksand-mortar experience. The way people live and run their lives these days is technology enabled and the retail mindset now needs to move from a defensive position to one that embraces the change.
The best of both worlds
And it’s not just fashion retailers that need to take a step in this direction – grocery, transport, government, education and hospitality can all benefit from these innovations. Companies such as AOPEN, a digital signage and appliance computing provider, are partnering with local retail design firms to engineer tech-enriched retail experiences for customers, allowing retailers to better engage at the point of sale, marrying the advantages of physical shopping with those of ecommerce.
“With global online retail brands like Asos and Amazon now part of a shopaholic’s everyday conversation alongside local favourites, there’s no disputing that customers are demanding convenient and engaging ways to shop both online and offline,” says Stephen Borg, global strategy director for AOPEN. “Yet what builds business and loyalty for retail brands on and off the web is a superior customer experience, spanning both service and shop quality, meaning that the game is certainly not over for bricks and mortar retailers, it’s simply evolving.” Indeed, research conducted by the Centre for the Edge has shown that, as the virtual flow of information between individuals and organisations increases, so too does the likelihood that there will be a physical flow. This cyclical pattern may well be the marketing model of the future.
With mobile moving faster than anything in the world of the web before, the opportunities to embrace the here and now are endless. With almost half of Australia’s adult population owning a smartphone, the ability for brands to get feedback on everything instantaneously is there to be leveraged.
The success or failure of a brand can hinge on the value of its online presence. These principles are not exclusive to the fashion industry. Governments and big corporates are using these tools as a way to crowd source ideas and support for policy changes, while small businesses are funding start-ups and new ventures purely through their social presence.
Breathing life into a brand with an interactive online presence is the first step in moving from the ‘here is our print catalogue in your letterbox’ campaigns to bringing customers into the designer’s mind, or peeking backstage at a fashion show, and into the virtual walk-in wardrobe of their friends. Let the customer lead the campaign and sell the brand for you. Their personal networks could be your strongest advocates. Unless you are in your customers’ pockets or on their desktop, Australian fashion brands will continue to struggle to compete at a local level – let alone a global scale.
Original illustrations by Stevie Rodger