Fashion eCommerce – 8 Growth Trends Part 2.
In Part Two we focus on a number of trends that will impact how we browse, source, and select fashion products online. We also review what are the emerging markets driving the online fashion industry and also what is the future outlook for Ireland. We take a look at ethical branding and how the change in business ideologies has put focus on ethics and sustainability in the manufacturing of fashion products. Finally, we look at the ‘800lb Gorilla’ ‘aka’ Amazon and how the eCommerce behemoth dominates the online fashion industry with its market-leading customer experience strategy.
But first a recap of Fashion eCommerce – Growth Trends Part 1.
In Part One we reviewed a number of trends that will shape the fashion industry over the next decade. One we looked at is the emerging growth in the ‘clothing as a service’ sector as online subscription-based rental services take off. Another trend has seen more and more online fashion retailers offering social commerce as an alternative shopping channel, forming part of a strategy to personalise the overall experience and connect closer with their customers. We also looked at how logistics and shipping services are changing, tapping into the lucrative eCommerce logistics market, offering faster and more efficient delivery schedules.
5. New Visual Marketing Technologies enhancing mobile shopping experiences.
Google Lens Launched by Google in 2017, Google lens allows the user (after downloading the app from Google Play) to point their mobile camera, take a pic and ask Google assistant to explain what the object is and…. Wait for it! offer suggestions or actions to take. Clever eh? This is brought about through powerful AI technology that operates through the app and your smartphone’s camera. It recognises places of interest like restaurants and cafes all you do is point-shoot a pic and the app will pull up useful reviews, address details, and opening hours. In terms of mobile shopping, the app really shows its usefulness (recognising over 1 Billion products in its database). If you see an item of clothing you like, simply point and shoot a pic and watch to see how the app will identify the clothing item and show similar items for shopping with information and reviews about them.
There might be some issues with regards to privacy though, if you move your camera around the app will pick up everything it sees, doing this in your home can be intrusive in terms of what it sees and how it stores and processes the data collected. But as a new visual marketing trend, enhancing mobile shopping experiences in the eCommerce fashion industry, Google Lens is another sweet piece of tech innovation that puts Google at the edge of innovation and user experience.
Pinterest Lens operates similarly to Google Lens as a point and shoot discovery tool. It works alongside its own database in Pinterest. As a user captures an item on their smartphone Pinterest Lens then image searches through its own database of pins and creates pin suggestions. Useful for shopping and price checking if you see a price tag icon on the pin results, clicking will give you the most to date price on the selected item. It’s becoming evermore popular with smartphone users with over 600 million visual searches per month.
The key differences between the two…
- Both allow you to shop if there is eCommerce integration on the product you are pointing your smartphone at.
- Pinterest introduced an extension to Pinterest Lens called “pincodes”. This allows the user to scan product QR codes offline using their smartphone, automatically directing them to the relevant product Pinterest board, without having to do a manual search.
- Google Lens operates slightly differently – probably more innovative. It can scan a product’s code but provides different information like product reviews, website links and details such as ingredients (for food products).
- Google Lens has the ability to record and save data with point and shoot technology, details from business cards, notification screens and useful information on upcoming in store retail events.
- Pinterest Lens has a ‘Shop the Look’ feature which allows products to be shopped (once tagged), but only if the business has a Pinterest account themselves.
- Googles shopping feature called ‘Style Match’ allows you to use Lens in the same way searching instantaneously.
6. Asia Pacific in the driving seat.
Asia Pacific remains the Number 1 market for B2C eCommerce in the world.
The exponential growth has been largely due to the demand for online luxury goods (the vast majority being fashion). Today its B2C eCommerce market accounts for nearly 50% of total global online retail volume with $2.3 Trillion in sales. Its share of the total global eCommerce sales is predicted to be twice that of North America and Western Europe combined. This represents a growth rate of over 141% since 2016!
China overtook the United States in 2013 in eCommerce volume and has remained the world’s largest eCommerce market since. Along with other emerging trends (like South East Asia’s eCommerce & social commerce revolution), combined are key factors driving the region’s global domination, which by 2021 will have two-thirds of the total eCommerce market share worth $3 Trillion.
The Asia Pacific Fashion eCommerce market is projected to be worth $255 Billion by the end of 2019.
The Outlook for Europe.
Fashion eCommerce sales in Europe are set to reach $765 Billion by the end of 2022, which will represent 36% of Global eCommerce Fashion sales. The biggest markets are the UK for online fashion sales followed by Germany and France. (both these are projected to have between 12% – 13% YoY growth rate to the end of 2022).
The outlook for Irish Fashion eCommerce?
Fashion eCommerce is projected to be worth €695 Million by the end of 2019, which is up over 17% from 2018. These figures (even with the Brexit outcome) are expected to increase, with a market volume by 2023 of €1.2 Billion, an annual growth rate of 13%.
Category Breakdown by Market Value.
|Category||Current Value||YoY %||Growth Projections to 2023|
|Apparel||€460M||+17%||Expected to reach €749 Million|
|Footwear||€136M||+16.7%||Expected to reach €217 Million|
|Bags & Accessories||€84M||+18%||Expected to reach €138 Million|
These figures include the sales of all online products for Men, Women and Children related to clothing, footwear, bags and accessories for all seasons and types of use.
7. Ethics & Sustainability.
The fashion industry has a poor history of human exploitation with low wages and poor working conditions. With luxury brands the image was traditionally amplified with an emphasis on expensive raw materials being sourced from exotic locations to produce the final product. More recently though the industry has taken a pivot moving towards more ethical ways of production. A move that has been expected by the younger generation shaping our future. Millennials and Gen Z market audiences have set the ethical tone that they expect fashion brands to adhere to.
“Annually there are over 1 Billion animals slaughtered for their Fur or Pelts.”
This coming Spring the focus for fashion brands will be ethics and sustainability. With the use of technology, fashion brands are now able to use natural resources and have the ability to rethink how they manufacture fashion items. Recycled materials can be sourced to make fashionable accessories and apparel. This new way of thinking has key benefits for eCommerce fashion brands. It provides a unique selling point for the environmentally aware consumer whilst also providing a brand story, a focal point on how products evolve in the manufacturing process. Some brands have gone further as part of their corporate responsibility and organisational culture to look to the community and become more diverse in their openness towards new society values. This new ethos has also formed part of marketing communications and activations which allow brands to connect with existing and new market segments.
Check out the Top 5 Irish Brands who have embraced brand ethics.
8. The Amazon Effect.
With its norms of social distancing, lockdowns, quarantine, and work from home, Online Shopping is now a habit. The Free Delivery model has evolved. Amazon has become a trendsetter across all areas of fashion eCommerce. Launching originally as an online bookseller, it has exploded it’s inventory to include everything from high-end luxury items to gardening and outdoor equipment.
Its continued success has mainly been due to user experience and customer service, building unrivaled loyalty with all who engage with it. Its strategy has been simple…keep investing in the business infrastructure. It took Amazon fourteen years to make a net profit, that’s because its infamous CEO ‘Jeff Bezos’ believed reinvestment in the company’s logistics, supply-chain, and overall customer experience was more important than hitting profit targets to keep shareholders happy.
But when we refer to the “Amazon Effect” what exactly does this mean?… It refers to the difficulty many online and offline retailers have in competing with Amazon’s streamlined operational efforts on the three main areas of the customer experience.
Delivery & Returns Experience >> Seen as Innovators in eCommerce logistics, offering a fast, free and speedy delivery and simple returns service. Amazon has introduced drone technology for small local delivery, ‘Prime Air’ was setup for speedy air freight delivery. ‘Amazon Lockers’ were also introduced as a ‘parcel drop off – pick up service’ allowing more ease for customers to pick up purchased items from remote areas.
Digital Service Experience >> The Amazon App provides users with a more optimised and unique shopping experience. For Prime subscription members, the app allows sneak peek views with ‘click and reserve’ options on Amazon Prime day sales items. The ease of access allows Amazon to connect with customers heavily reliant on mobile commerce like the African and southeast Asian markets. Amazon’s social media channels are also a useful tool in handling any queries or complaints and are monitored 24/7, 7 days a week.
Product Experience >> Amazon’s product experience begins with its search engine (one of the most advanced ever developed). It can sort by brand, customer reviews, price availability by the user inputting a simple search query in its product search engine. Amazon places a very high emphasis on customer reviews, it’s probably the most important ranking factor in Amazon product searches. For fashion retailers, it’s imperative that good product reviews are received.
So why does the Amazon effect have such an influence on Fashion eCommerce?
There are two main reasons:
Firstly is the approach Amazon has taken to their customer experience, which has been a crucial factor in winning return sales over the last two decades. It’s domination over the fashion eCommerce market is largely due to its ability to cope with consumer demands, keeping their own ordering and buying processes simple and user friendly.
The other reason is the trust Amazon has developed in its own brand name. It has spent the last two decades reinvesting in its marketplace platform, supply chain infrastructure and customer support services. Alongside these it has built global recognition has a trusted eCommerce brand. Even with the Amazon Seller Marketplace, to gain entry, sell, compete and survive, only the best marketplace sellers succeed. High standards and controls are kept by Amazon over it’s marketplace sellers even down to the finer detail within their own product pages. This guarantees a consistency and quality in the shopping experience right across all its inventory and provides benchmarks for any newcomers entering the platform.
The result is that with Amazon people have become accustomed to sharing their personal details, financial information and buying preferences. The knock-on effect to all of Amazon’s influence is pushing more fashion eCommerce retailers to rethink how they sell online!
So what for the future?
Trends have a lifecycle – growth, maturity and decline, the ones that have a direct impact on the customer experience will be the ones to watch. We’ve reviewed eight we think will have the most significance.
With a new decade upon us there is no way to determine what the state of online shopping will be at the end of it. Take a look at how quickly eCommerce has progressed and evolved in the last 10 years. The large growth in social media and the ubiquity of smartphones have forever changed the online marketplace.
izest Marketing is a commercially focused strategic marketing agency with a full-service offering across creative, marketing, and digital channels. Please Contact us today if you are planning or already have launched an eCommerce business that needs to transform to handle the challenges of the next decade.
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