According to data from Market Research firm NPD Group, US Fashion sales increased 3% in 2016, the largest such increase since 2013. Despite the category level growth, 2016 and Q1 2017 weren’t necessarily a strong time for retail fashion. Aeropostale closed over 100 stores and Ralph Lauren closed 50 stores. 2017 looks even more grim A&F is closing 60 stores, Wet Seal is closing 171 stores, JCPenney is closing 130-140 stores, BCBG is closing 120 stores, Macy’s is closing 68 stores, and now Neiman Marcus is rumored to be for sale, citing losses of over $118 last year. Even in the very crowded fashion space, it is ugly out there, but not for everyone.
So where is the growth in US Fashion coming from? eCommerce is a significant portion of that growth, earning an 8% larger share of US Fashion sales in 2016. More specifically, eCommerce growth wasn’t driven by the blue bloods of fashion, of which only seem to be closing stores, but from pure play eCommerce Fashion retailers, including Amazon.
As a total, Morgan Stanley estimates that Amazon is the number two US Apparel seller, behind Walmart and estimates are their market share could rise to as much as 20% by 2020. That is scary to think about for an organization that already dominates several markets and is traded as a technology company.
This doesn’t necessarily mean that Amazon is the only winner. Discount fashion retailers such as TJX’s brands showcased improvement and carried some of the overall improvements, but the lessons of Amazon remain; consumers are increasingly interested in buying something historically reserved for a retail experience, online.
Think about the reasons why eCommerce works for Fashion
According to data from Google, 65% of all online shopping starts on a smartphone. This means that consumers are increasingly interested in eCommerce, specifically mobile commerce, to drive the lion share of their fashion purchase. Consumers expect easy return policies and appear to be increasingly interested in the ability to try on products in their own home, in their own mirror, vs. a retail experience. This option also allows them to pair the products with their own shoes and accessories, thus previewing a look they are trying to obtain.
Use this convenience to your advantage and craft your message to satisfy those needs. Help the consumer pair your clothing item with another piece complimentary to the piece, which they might already have in their closet. Reduce the friction and embrace the at home ‘fitting room’ experience.
Think about the reason that subscription services such as Stitch Fix, Thread Up, Trunk Club, and others are showcasing significant growth, it is curated fashion with an at-home fitting room experience.
Why Fashion Needs eCommerce to Survive
If you look at L2’s Top Digital Fashion brands (measures the visibility and digital performance of roughly 100 fashion brands), the top 10 are a mix of luxury brands, blue bloods, and others who are showcasing significant search engine visibility, through focusing on a mobile first mindset and improving the consumer experience.
Looking at the 2016 Fashion Trends data from Google, it is clear that consumers are becoming very detailed with their searches, less likely to look for category level queries (leather jacket) and and more likely to search using style specific queries (longline bomber jacket). This provides opportunity for the challenger retailers to win in a crowded space, with large retailers spending 7 figures a month on Adwords.
Get these 3 things right in your Fashion eCommerce strategy
With consumers moving increasingly towards search (whether Amazon or Google) to find their next fashion pieces, ensure that your eCommerce strategy has these three things correct.
- Mobile First, Sometimes Mobile Only: If you aren’t increasingly focused on your mobile user experience and mobile site, then you are missing out. Whether it is responsive or mobile version (such as m.website.com), having a mobile friendly website impacts more than just user experience (nobody likes when a consumer is unable to actually buy something from a mobile site), it also makes Google happy. If the search bots are able to parse your site quickly and serve your website to relevant consumers quickly on mobile, good things tend to happen. The days of research on your phone and buy on your ‘computer’ are over. Mobile payment gateways (Apple Pay, Google Wallet, Amazon Pay, Samsung Pay, Paypal, etc) make it very easy for consumers to research and complete a purchase, without a computer to ‘do the heavy lifting.’ Especially since most of these payment gateways already have your payment information saved.
- Replicate the retail experience: Some consumers enjoy the retail experience. Browsing through stores, seeing how this looks with this, etc. This helps them build a look, especially since eCommerce is 2D. You can’t see depth online and you are unable to touch the product. Try to replicate the experience as much as possible. Utilizing things like ‘Find your TrueFit’ allows the user to enter information to help determine the correct size for their unique body.
- Shopping, Shopping, Shopping: It is no secret that Google is doubling down on Shopping ads (maybe even Tripling down) and fashion brands looking to sell eCommerce should also. Compared to text ads, the clicks are significantly less expensive, the option to add promotions on the product listings is now available, and the performance is significantly better than display. A well defined and even better executed Bing and Google shopping advertising strategy is a must have, if you plan to compete and win eCommerce.
Digital Advertising Opportunity is Ripe
The attached screenshot from L2 shows that for non-branded category keywords (leather jacket) fashion brands have significant opportunity for Adwords (both shopping and text), since the top fashion brands are not bidding on them, as they focus on branded queries for their Digital Advertising efforts. If you are a challenger fashion brand/retailer looking to build or improve your eCommerce presence, that should make you very happy!
The time is now for fashion brands fighting the shrinking shelf space, low mall traffic metrics, ridiculous placement fees, buybacks, and the myriad of other retail headaches to look towards eCommerce as a way to not only compete, but win share of purchase and build a brand. Our team of ROI focused marketers specialize in finding opportunities for retailers of all sizes to earn impression share, purchases, and return on investment through Shopping advertising, Amazon Advertising, and Social advertising.