For anyone who believes that e-commerce's 5 percent slice of the retail pie is insignificant, you should know that about 43 percent of all purchases are influenced by an "online research moment," said Peter Leech, speaking to a crowded room at last week's Apparel Tech Conference West held at the Fashion Institute of Design & Merchandising (FIDM) in Los Angeles.
Understanding the real shifts in consumer shopping and research habits — e-commerce "game changers" — is crucial to getting your message or product in front of the consumer most effectively, said Leech, partner at The Partnering Group and former CMO of Onlineshoes.com.
What's the rush? By 2014, said Leech, $1.4 trillion in purchases will be influenced by online marketing, apparel e-commerce will top $45 billion, e-commerce overall will hit $259 billion and total e-commerce will deliver 633 billion page views.
Meanwhile, not only traditional shopping behaviors, but also traditional marketing methods are evolving in an age where Amazon has more visitors in one month (140 million in September 2011) than the SuperBowl has viewers (111 million for SuperBowl 2011). "[Advertising during] the SuperBowl used to be the single best way to reach the widest audience," said Leech. "Now we are carrying around supercomputers — there are no barriers of ‘only at home,' ‘only at your desk' — it's in your pocket! Ninety percent of mobile users say they search the web while shopping."
Brands and retailers looking to thrive in the shifting apparel retail landscape should take note of the following trends:
Shopping is social
Carrying a supercomputer in your pocket at all times presents a monumental shift in how, and how often, information is being shared, accessed, used and acted upon. For example, says Leech, 48 percent of mobile users in store take and send product photos to family and friends. "How is this affecting business? They are going to get a quick response. Their friends and family are on phones, too. You know they are."
Shopping is an increasingly social activity. Seventy-seven percent of respondents to a comScore survey conducted in April 2011 said they have accounts on Facebook or Twitter; 42 percent followed retailers on those sites, and 34 percent shopped on social networking websites or blogs.
Leading apparel retailers are tapping into this trend by making it easy for consumers to shop socially and connect with both friends and brands, says Leech. Online retailer ModCloth has done this successfully by allowing consumers to "Be the Buyer," voting on merchandise they like and want ModCloth to carry. This creates a personalized experience that spawns a different relationship with the consumer than the one she'd get simply by "going down the street and buying a shirt," he says.
Similarly, Walmart Labs uses crowdsourcing for product innovation via getontheshelf.com, where consumers submit products, and the mega-retailer features those that receive the most votes from Walmart fans.
And teen specialty apparel retailer Wet Seal continues to evolve its web site, making it easier and more fun for girls to shop with friends online. Most recently, the company has tweaked its offering to allow friends to start on a shopping path together, diverge into different areas of the "store," and then reconnect.
The highly social and interactive shoppers you find on these types of sites are the "most digitally wired," said Leech. "They are publishing. They post reviews that everyone else reads. They write blogs, share links, emails, tweet and talk about e-commerce. … The content these consumers generate online is driving a massive wave of media that affects how your brand ranks on Google and other search engines."
Apparel leaders are becoming the media, too
This massive wave of user-generated content is just one component of the massive shift taking place in the world of media. For decades, iconic style magazines such as Elle and Vogue ruled supreme as purveyors of fashion, but these print publications are now competing with fashion blogs, online fashion shows and other digital media; they've seen their circulation and advertising decline, and are looking for ways to energize their enterprises. Some are entering partnerships with e-commerce sites, such as Harper's Bazaar, which teamed up with Net-a-Porter to sell clothing and accessories online, and Vogue Italia, which has similarly partnered with the multi-brand fashion e-commerce site Yoox, says Leech.
As traditional style media casts about for effective and profitable ways to move into the digital realm, the opposite shift is taking place. Brands are becoming the media. Consider Net-A-Porter, a hybrid of glamour guide and commerce, or luxury icon LVMH, which is publishing its own style site Nowness. "Brands are filling the gap, becoming the new media," says Leech.
The role of the store is changing; a smart multi-channel strategy is needed
Add a recessionary economy to a digital economy and what do you get? A need for fewer, but smarter, square feet of selling space.
"We need to back up and think how we operate," said Leech. "We're now slamming into each other. We have to sort it out," he said, addressing a glut of retail space in the United States.
The changing dynamics of shopping spurred by the growth of online commerce — and even, in some industries, the change in the products themselves — require a shift in the thinking about the brick-and-mortar retail footprint. Consider Best Buy, where customers enter to aisles and aisles of CDs and DVDs — media formats that are going the way of the dinosaur. Increasingly, people buy music in digital format, online, which changes not only how and where they might shop, but also reduces the need for physical inventory. Best Buy has announced a 10 percent decrease in square footage, and the opening of 600 to 800 Best Buy Mobile stores within the next five years that will focus on ever-smaller and more versatile gadgets, and will occupy 1,300 to 3,000 square feet, vs. the current 100,000 square feet of a typical Best Buy store.
That's a phenomenal shift. Although apparel cannot yet be downloaded, apparel retailers must contend with the same shift toward a digital shopping world, and must "reconceive the store space" to fuse the capabilities of all channels. Stores can serve as locations for in-store pickup of online purchases, as reinforcers of the brand image and can even stand out by offering various types of customization, including bespoke tailoring. Retailers can also offer touchscreens and other digital formats in-store that fuse the brick-and-mortar and e-commerce experiences and further strengthen the brand image, while also offering an "endless aisle" of product. Smaller format stores, such as those planned by Best Buy and Walmart, will offer easier access and more convenience to shoppers, while allowing retailers to carry less inventory and reduce their operating costs.
In short, said Leech, "social and mobile are disrupting traditional marketing." To be successful, apparel businesses must be innovative in their online presence and focused on creating a seamless multi-channel experience for the shopper. They also must develop a smart social strategy, shrink and digitize the store and, Leech concluded, customize where possible.
Jordan K. Speer is editor in chief of Apparel. She can be reached at firstname.lastname@example.org.