Every retail business has one goal- to sell. If we were to go one step deeper, we’d say that every retail company wants to sell repeatedly to its customers while also steadily acquiring new ones. We live in a data-rich economy and brands have the distinct advantage of knowing more about their consumers in this time than in any era before. Today, a simple purchase decision can tell companies a lot about who their consumers are and what their drivers might be.
Yet, a larger question looms. How do we use this data effectively? How do we mine the right data and separate it from the white noise to help deliver a personalized experience? If only there were a way to get into the shopper’s mind…
That’s precisely what we’re going to do today.
This year, ShopTalk’s annual retail event was titled ‘Kicking Off A Decade Of Retail Transformation.’ Transforming it is. The more homogenous group of baby boomers who dominated the shopping scene are now paving the way for two new generations of shoppers almost simultaneously. The millennials and Gen Z have almost nothing in common with baby boomers when it comes to shopping preferences. What’s more, they have very little in common with each other as well
To put this in perspective, one only needs to look at Deloitte’s ShopTalk presentation aptly called The Consumer Is Changing- Perhaps Not How You Think.
Before we dive into all of it, let’s take a look at the defining trends in consumer behavior in fashion retail so far.
Fashion Retail And What People Want
Whether you’re selling to an affluent fifty year old in Florida or a young, streetsmart eighteen year old in NYC, some factors remain common. Let us begin with the common attributes and patterns that people expect from a fashion brand.
- A Good Price: That price, product, and convenience make up the top three priorities for everyone should come as no surprise. A customer buying a fashion item is almost always looking for a good deal. Counterintuitive as it may seem, even those buying a luxury item are looking at attributes such as longevity, brand value, and trade-in value as ways to determine if the price matches the value being offered.In the context of a millennial customer, this is no surprise. Ridden with more debt in their twenties than their parent generation, they would prefer to spend on necessities like healthcare than on apparel exclusively. The overall expenditure on clothing has fallen significantly in the last twenty years. However, fast fashion brands have been the first to cash in on this trend by offering cheaper products that are still in trend.
- The Right Product: On average, how many times do you expect to use a pair of denims? When they were invented, denims were pitched as the sole alternative to clothing suited to heavy labor. Today, denims tear much more easily. The very definition of long-lasting has changed significantly, in part because fashion is such an ephemeral industry in itself. No one wants to be seen in clunky bell-bottoms when cropped pants are all the rage. Read about sustainability here.A lasting product may not be the same as a good product, at least not in today’s consumer’s mind. Instead, they are more likely to value the trend aspect as well as how many other items they can pair a piece of clothing with.
- Convenient Shopping: There’s no denying it- Amazon has us addicted to fast deliveries, hassle-free returns and basically being the boss of every purchase we make. Several fashion retailers are still scrambling to keep up with these changes, but there’s no denying the fact that today, the consumer is king in a way they have never been before.
For retailers, going omnichannel is the only way forward. Even better if they can regain control of their brand narrative and sell directly to their customers. With the introduction of Instagram’s checkout feature, there is no end to the sort of convenience on offer and consumers are looking to their favorite brands to make the switch, and fast. How much brands sell is a direct derivative of how convenient it is to shop from them
Keeping this in mind, brands like Sephora are going the extra mile to make things happen for their customers, from an AR makeup app to faster checkouts for repeat customers. Even H&M, reeling under the pressure of excess inventory and ecological concerns, has managed to turn the story around by offering a direct online shopping experience to its customers across the globe.
- A Story: As opposed to a good story, a genuine one is exactly what it suggests. Honest brands that are unabashed about who they are have a better success rate than brands trying to attain something. In this content, direct to consumer brands have the upper hand because they control everything from processes and production to the marketing and brand narrative.
Take Warby Parker for example. How about getting an eye exam with only your credit card’s length for reference? Warby Parker pulled this off, and along with the option of trying out frames at home, it positioned itself in direct competition with Luxxotica for a fraction of the price. The choice of uploading and sharing a picture with their consumer’s new glasses gave them a lot of user-generated content and also the exposure they were looking for.In a way, they took charge of the narrative by letting customers choose what would be most comfortable for them. When we think of brand storytelling, the immediate urge is to start churning out content. Instead, brands could consider what makes for a good story recipe and get their consumers invested in building it.
Same, But Not really
For all the attributes that they share in common, customers are also unique in that there are individuals shaped by very different narratives. Many attempts have been made to bucket them into groups based on their age and where they live, but we’re slowly coming to realize that we need to start treating them as individuals.
Deloitte’s ShopTalk presentation brings this aspect to the fore. Because of just how diverse people are, opportunities in fashion retail have shifted from a few large bases to many smaller ones. For example, an eco-conscious fashion retailer today has as much opportunity for success as a bigger conglomerate. What’s more, more prominent brands like Zara are also looking at ways to tap into as many of these smaller opportunity pockets as possible. For all the backlash it received, Zara’s rebranding was no accident. It is meant to match with the new narrative of being an authority in fashion through the use of a journal format.
Retail authorities like Forrester have been making a case for a 360-degree customer view for some time now. To put it simply, it is time to begin using all of the data that customers have been willingly providing, or in some instances even sacrificing for the sake of convenience. For example, for a customer considering a sneaker purchase, there is already a clear position in his mind (ultra-premium vs. everyday) and advertising to them is not about presenting the other alternative, but about telling them why the other alternative is better.
Friendly Ways To Encourage Conversion
Once you have a sound understanding of your customers’ preferences, it becomes easier to tailor the buying experience to encourage more conversions. In this section, let’s talk about some recent success stories. It is easy to see that they succeeded because they started at the very beginning- buy being their consumer and evaluating every driver and every pain point to reach consensus on what to say to them.
- The Simplicity Paradigm: The sneaker market is huge. Today, sneakers are everywhere, and intrusively so, some may say. AllBirds toned the fever down by pulling back on the branding to offer a shoe that was only just a shoe and not a statement. A few billion in sales and $1.4 billion in valuation, it is safe to say that they understood their Cali-tech consumers very well.
- What Men Want: When it comes to a pair of pants, a man has a lot of opinions. Said man will however never spend hours in a physical store figuring it out with a store representative. In fact, selling to men is tricky. They walk in, try one pair on, and walk out if they don’t like it. But then again, all they asked for is a pair of well-fitting pants. Bonobos will go down in history as the menswear brand that spent all of their resources in building the perfect pair of pants that could be bought online. The Apple of the pants world is finally here.
- What Women Want: Women have very specific preferences. Even those among them who walk out of a store dejected are making a very specific choice- they probably didn’t like what they saw. Visual appeal is a huge driver of conversion in this demographic. Glossier knew that selling makeup online would be a challenge in itself. They also knew that they could drive success by showing people what makeup looks like on them before they buy. Enter- the skin tone matcher. Consumers can now try out products at home, have them matched perfectly to their specific needs and then place the order without apprehension.
- Baby Boomers vs. Millennials: The greatest generational shift of our times can be seen between these two generations. Fueled by the rapid advancement of the internet and mobile devices, millennials buy very differently from baby boomers. For the former, a store is an experience center while for the latter, the store is a point of sale. Brands that can cater to both these needs are most likely to see themselves succeed.
We need only to look to Nike for the perfect example. Shoes surpass generations. For some, they are a daily need, and for others, they are a statement-maker. Nike’s flagship store in NYC is the perfect example of fluid retail. With features like DIY stations, it caters to the millennial buyer while also offering ample opportunities for #Throwback. For the more casual buyer, there’s nothing like a piece of history to make the conversion happen.