The fashion industry has significantly evolved over the last decade with the global online fashion market expected to be valued at $765 billion by 2022 and e-commerce constituting about 36% of total fashion sales. Fashion has evolved from pure design to marketing with every brand rushing to social media and mobile marketing innovation today. New tech devices are being launched constantly that open new doors of customer engagement. As online and 3D services like Stitch Fix and Matchesfashion.com become popular, we must also discuss how brands can utilize technology to enforce the idea of a “third space”. Fashion is witnessing a new universal technological revolution via personalization. 83% of Canadians already own some form of smart device in their homes led by smartphones and smart TV and about 2.6 million Canadians already own a smart speaker (Vividata Vivintel Spring Survey 2019). More AI and Experiential Marketing will catalyze the success of fashion retailers.
Personalize for “Customer Delight”
Consumers are overwhelmed with choice and competitive pricing. How will fashion brands maintain their niche and go beyond to serve “customer delight”? They monetize personalization, email marketing strategies and automation to target people based on their behavior, interests, and demographics. Customer experience initiatives need to go even further with individualization –Personalization 2.0–creating a one-to-one relationship with consumers to drive revenues and loyalty. Many fashion brands are realizing their use of AI in ibeacons, algorithms, chatbots, data analytics and 3D printing will lead to more personalized products, curated recommendations, discounted offers, customized packaging, and storytelling that connects to individuals digitally.
Sephora disrupted the fashion industry with its product variety and “assisted self-service” philosophy, earning double-digit growth in profits and achieving more than 100 stores. Its virtual assistant is a game-changer, specifically tailoring cosmetics recommendations to a customer’s exact skin type, tone, eye or hair color. Sephora’s Virtual Beauty app uses AR to allow consumers to explore different beauty styles by digitally overlaying Sephora products on selfies.
Retailers like Fendi, Tommy Hilfiger, Coach, and Burberry are already offering monogrammed products to meet consumers’ individual tastes. Consumers’ desires to express themselves through fashion choices and emotional triggers allow companies to innovate with design by hosting a puppy’s face on a scarf or etching their initials or name on clothing. A technology company Carbon is reviving the 3D printing industry and has been working with sports brand Adidas to develop a revolutionary midsole that paves the way for custom high-performance shoes or Future Craft 4D sneakers to meet the needs of every consumer. Released in November 2018, the shoes have gained high popularity.
Machine Learning, In-Store Experiences, and Community
The savviest of retailers are leveraging advancements in machine learning and according to Deloitte, one in three consumers surveyed were interested in personalized products, with 71% of them ready to pay a premium for such embellishments. Moving forward, the biggest challenge for fashion stores will be to leave an everlasting impression on consumers, like the excitement felt by Rebecca in The Confessions Of a Shopaholic or Holly Golightly’s “Nothing bad can happen” feeling in Breakfast at Tiffany’s.
As consumers now shop from the comfort of their homes, they will choose to invest in experiences rather than products. The store could be a place to meet your friend for a drink, enjoy salsa nights or experience a live fashion event using VR. Given how emotions define who we are, how we live, and form our perceptions of brands, experiential marketing and communities will transform the relationship between brands and consumers forever.
IKEA picked 100 consumers in the UK (via a Facebook contest) to sleepover in their warehouse in Essex. The experience was unique as it was tailored to pamper the chosen guests with massages, salon services, and options to select their mattresses, sheets, and pillows for the sleepover for free. The company tried to integrate social with experiential marketing, and Lois Blenkinsop, Ikea’s UK PR manager, stated: “Social media has opened up a unique platform for us to interact directly with our customers. Listening to what they want is what we do best, and the Big Sleepover is just one example of how we’re using such instant and open feedback to better inform our marketing activity.”
In my own previous organization, I was able to execute the same strategy at designer fashion concept store BasantiKeKapdeAurKoffe, (clothes and coffee). We invited our existing clients by email, text and in person, to a kitty party with their near and dear ones, sponsoring their food, beverage, placards, games and a live performance in-store for a night. The event helped us engage our loyal customers and brought us new ones. We did this over a period of three months of hosting an event each month and were able to measure the increase in revenue as our sales improved by 30 percent! I agree with Doug Stephens, author of Retail Prophet when he says that community is the buzzword to master as retailers awaken to the idea that their consumer’s primary problem is no longer the scarcity of products but the scarcity of genuine human connections. The in-store experience is king.
The Innovation Challenge and Opportunity
Building on customer experience and communities are ambitious marketing strategies that also come with their challenges. AR, VR, and AI call for elaborate and expensive pitches (between $5250 to $28000 to just develop an application) and difficulty in measuring return on investment (ROI). While personalization helps improve customer experience, there will be a thin line between “cool” and “creepy” – that somebody is constantly watching over you or bombarding you with offers. Other caveats are the accuracy of big data mining, ethical AI and data privacy. A brand’s reputation can be compromised if its consumer data is inaccurate because of Dark Social (unattributed online browsing/sharing analytics) as consumers increasingly use messaging apps, email and browse their webs in Incognito Mode.
Fashion is a rapidly growing, ever-changing industry. According to the BOF and McKinsey in 2019, developing markets were becoming a “focal point for the fashion industry in the coming years as its middle-class consumer base grows and manufacturing sector strengthens.” With the increasing purchasing power of these markets, the fashion world’s dynamics are changing dramatically. With great challenges come great opportunities, and by targeting customers’ psychology, emotions and developing deep human connections, marketers will thrive. Leading fashion companies will begin delivering on personalization in earnest and in their ability to create communities around their brands while using their retail stores as a media tool to join in the fashion-tech revolution.
This article was originally published on Generation1.ca.