Fashion, by definition, is always changing. It’s an industry that needs to keep moving to survive. Collections come and go with the seasons, bringing with them a fresh wave of trends that may lose their allure by the coming year. But in recent years, more than ever, the industry has stepped up a gear.
There has been a seismic shift in the industry recently, brought on, among other things, by technological advancements and increasing pressure from consumers for improved transparency and higher social and ecological standards.
In this long-form series, FashionUnited will be taking a closer look at the different sections of the fashion industry - from sourcing to designing, manufacturing to retail - observing the way the sector as a whole is evolving and, more importantly, where it is headed. This is the first chapter of a series.
Digital fashion collections, experiential retail, 3D printed garments, trend-predicting AI, robots, and an ever-growing awareness towards social and environmental issues. The fashion industry is changing fast. Turn away and you might miss it.
The UK retail industry is facing a prolonged period of difficulty. It seems we can’t go a week these days without hearing about another British brand falling into administration or another broken record for lowest footfall on the country’s ailing high streets. The UK lost 70,000 retail jobs in the final months of 2018 according to the British Retail Consortium, while research compiled by the Local Data Company (LDC) revealed that the high street suffered an historic loss of 2,481 stores in 2018, up from 1,772 in 2017.
So why are times so tough? While a raft of complex social and economical issues can be attributed to the UK’s poor retail environment, a few key issues seem to be at the heart of the problem:
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The dreaded “B” Word. Brexit has been a talking point for the UK since the referendum results were announced way back in June 2016. Regardless of people’s opinions surrounding the choice to leave or not, its undeniable that the implications of the UK’s decision to leave the EU have already materialised. For an in-depth insight of the potential complications a no-deal Brexit would mean for fashion companies and retails, take a look at this article published in March.
The explosive growth of e-commerce
With shoppers’ increasing preference to shop online, e-tail giants such as Amazon, Asos, Boohoo and Farfetch have grown at incredible rates in recent years, often offering cheaper prices that competitors just can’t keep up with. As of March 2019, online shopping accounts for 18.6 percent of all UK sales - that’s up from 5.9 percent in March 2010. For many, e-commerce simply feels easier, quicker and more comfortable than visiting a physical store.
Weak consumer spend, confidence and footfall
The British public is wary. In December, consumer confidence hit a five-year low according to the GfK index, fueled by the public’s concern surrounding the UK’s economy. Christmas sales were flat, showing zero percent year-on-year growth, according to the British Retail Consortium (BRC) - the worst December performance since 2008. Debenhams and Marks and Spencers were among the UK retailers reporting drops in the important festive season trading months. Footfall has also been poor. In February, it fell by 2.0 percent, marking the fifteenth month of consecutive decline, according to Springboard - the weakest February in five years. According to GlobalData, fashion spend in town centres is expected to slump by 13.8 percent by 2023.
But it's not all doom and gloom. While brick-and-mortar might be facing some speed bumps, it would be wrong to say the high street is dying. The retail landscape, like every industry, is evolving. In this article, FashionUnited takes a look at some of the ways the fashion retail is changing, and we look ahead - with the help of industry professionals - at how it might look in ten years from now.
M-commerce and the growth of online shopping
One of the biggest contributors to retail’s seismic change in recent years is undoubtedly the growth of online shopping. A 2018 study by Ofcom found that the average Briton spends 24 hours a week online (more than twice the time they did in 2011), and checks their phone every 12 minutes.
It makes sense then that such a big proportion of our shopping is now done online. With a few simple clicks and from practically anywhere shoppers can explore items, check prices and make purchases. And mobile shopping is making that even easier. Online sales are growing at a rate of 16 percent annually in the UK and are predicted to overtake desktop sales globally by 2023, according to the latest Global Payment Trends report by Wordplay.
Social shopping is a key example of the importance of mobile shopping today. Social media has becomea considerable part of our lives, and companies know it; it seems like every week a social platform is announcing a new feature to better engage with its audience and their shopping habits. In March, for example, Instagram introduced a feature allowing its users to buy garments directly from its app, without having to redirect customers to the specific brand’s site before purchasing.
Similarly, Zara recently tapped into the power of social influencers with their collaborative Instagram, @livingzara. A new influencer takes over the account every week to create content featuring Zara items available to shop from Instagram.
As the influencer economy continues to grow and Instagram makes further enhancements, we can expect to see more brands adopting these practices and purchases via social media further integrate into consumer shopping habits.
Experiential Retail: Brick-and-mortar 2.0
But the growth of e-commerce doesn't mean the end of brick-and-mortar. In recent years, retailers have taken a different approach to the way they use their physical space. They are now focusing on the customer experience rather than simply looking at stores as a room full of ever-changing products to be sold.
Concept stores, pop-up boutiques and showrooms are on the rise - and for good reason. As much as 85 percent of UK consumers still prefer to shop in-store, a March survey by Marketing Signals found. The same survey found that a considerable 94 percent said they research a product online before making a decision.
The struggling environment has seen the emergence of a different space - one that focuses on customer experience. According to Euromonitor, “seeing or trying a product before buying” is already the main motivation for shopping in store for 47 percent of today’s connected consumers around the world. Now, more than ever, retailers need to truly engage their shoppers and offer them an experience when they visit a store.
Experience is certainly important but not necessarily in the flashy, event-driven way that many are playing with at present. The best experiences can be simple, but personal and value-driven. The main selling point of e-commerce is convenience. A store that can offer the same is of more value to shoppers than an Instagrammable display.
Below are a select few examples of how retail spaces are being used in innovative new ways:
Edited market analyst, Kayla Marci, stressed the importance of brands blending the online and offline experience in order to truly engage shoppers. “Despite the belief that younger consumers are only interested in purchasing online, B&M still play a crucial role in Gen-Z shopping habits. Brands need to be innovative to remain relevant in the future and explore creating a space that connects both the digital and physical world. Gen-Z cohorts will then want to be there, immerse themselves in the experience and share it with their peers on social platforms,” she said.
Marci pointed to Revolve as an example of a brand successfully using an omnichannel approach through its use of a pop-up store at Coachella. At this year’s festival, the brand translated products worn by influencers at their installations into shoppable social and email content. “Pop-up installations are continuing to trend well with younger consumers, this was evident at Coachella where every year, more brands are competing in this space,” Marci said. “This leads to the evolution of social media as a retail platform.”
And what exactly are landlords looking for when it comes to signing brands? According to Hannah Grievson, property director at British landlord Sloane Stanley, which manages a highly sought-after area of property in London’s Chelsea, it's about finding brands that are “unique and inventive” but that also “consider current consumer trends.”
“We offer a platform for new and innovative concepts, giving emerging brands the opportunity to trial their concept with a pop-up, before signing a long-term lease,” Grievson said. This tactic is being used more and more by landlords as an exciting way to showcase new brands who otherwise might struggle to secure permanent space.
Latin American fashion retailer, Blaiz, for example, opened up a pop-up store with Sloane Stanley before snapping up a permanent store at 227 King’s Road. Similarly, The Wardrobe Workshop, a retailer which combats the topical issue of sustainability in fashion, made their debut bricks and mortar pop-up with the landlord this year.
“We are also interested in brands that actively engage with their consumers and bring the store experience to life,” Grievson added. “For example, The Cherry Moon is a brand which came from a photography business and uses their retail store for fashion events.”
Quick, seamless, frictionless shopping
Seamlessness, or frictionless, is the increasing tendency for a shopping experience, whether online or offline, to be as smooth and efficient as possible - something that is becoming increasingly valued, and expected, by the see-now-buy-now shopper. Here are a number of ways retailers are going about it:Payment methods: cardless, cashierless, biometric
When talking about frictionless shopping experiences it’s also important to consider payments. The payment step of a shopping experience is a vital part that can make or break the overall experience. Too long a queue and shoppers can leave for a rival store. Retailers know this and have started to consider new and innovative approaches to the transactions process.
New payment methods introduced by companies like Google, Apple, Facebook, and Amazon have stepped up the game, with transactions that can be done, whether online or in-store, instantly and effortlessly. Additionally, ‘buy now, pay later’ features are growing increasingly common among retailers, allowing shoppers to purchase items immediately and pay for them over an agreed amount of time.
Some stores are even going as far as to take out the need for a cashier all together. Amazon Go is leading the trend in America. The retail giant has a chain of cashierless stores where customers can purchase products without taking them to check out. Instead, a selection of cameras, sensors and RFID readers keep track of which items shoppers pick up, before charging directly to their Amazon account one they leave the store. Similarly, Chinese e-commerce powerhouse JD.com said it intends to open “hundreds” of unattended convenience stores using the same type of technology.
Biometric payment methods, ones that use a shoppers body to verify their identity, have also been experimented within retail. Paying through fingerprint and face recognition on a phone is becoming more common, and some brick-and-mortar stores have even started experimenting with the technology. A costcutter store in Brunel University in London set up hi-tech finger vein scanners at pay points to allow customers to pay by scanning their fingers.
You can’t talk about future payment methods without mentioning blockchain and cryptocurrencies. Blockchain, at its core, is a digital and decentralised ledger of blocks of information shared and maintained across a network of computers. A benefit of this peer-to-peer format is that if anyone tampers with the information, it is easy to notice, making it a viable solution to combating counterfeiting.
That then could undoubtedly prove useful in the fashion industry. In May, LVMH announced the launch of AURA, the first international blockchain made to provide proof of authenticity of luxury items and to trace their origins from raw materials to point of sale, and even further to the used-goods markets.
High tech becomes the norm
AI, AR, VR, digital signage, smart tags, edge computing, and robots in stores. Here’s a look at the technology which could be coming to a store near you (if it hasn't already).
Artificial intelligence (AI) and machine learning (ML)
AI is on the rise in retail. According to a recent study from the Capgemini Research Institute, over a quarter (28 percent) of retailers today, a significant jump from 17 percent in 2017, and 4 percent in 2016. But not all those using the technology are making the most of it. The same study found that while the technology could be a 300 billion dollar+ opportunity if retailers are able to scale and expand the scope of their existing deployments, only one percent of retailers using it are doing so. The majority of them, instead, are focusing the technology only on sales and marketing.
AI startup Edited uses driven data technology to inform retailers of upcoming trends and monitor their stock to ensure retailers have the right amount of a product at the right time. “Invest in data-driven technology is probably the less risky thing to do because it makes things more efficient,” Grace Hill, director of retail strategy at analytics firm Edited told FashionUnited at this year’s Pure London trade show. “So many decisions in retail at the moment are based on gut instinct and can lead to overbuying or underbuying. Embracing data and making informed, smart decisions is the way forward.”
Another application of this can be seen with the innovations of visual AI startup Syte. The company recently partnered with Marks and Spencer to create a new feature which allows shoppers to upload an existing photo or take a new one of any outfit to explore a range of similar-looking products on the Marks and Spencer website. The ‘Style Finder’ tool uses AI technology to find results with the closest match, which customers can then narrow down with additional filters such as size, price and colour.
“As retail becomes increasingly democratized, brands and retailers will need to continue to focus on the unique value they can provide to their consumers. Most of this value, we believe, will come in the form of omnichannel AI technology,” said Lihi Pinto Fryman, CMO and co-founder of Syte. “For e-commerce, this means improved customer experience with innovations like visual search, virtual try-on, smart assistants for informed size recommendations, and a full online experience that is tailored for the user. For in-store, fulfilling the actual purchase should be the last focus.”
Hover over or click the tiles below to reveal more content.
- Supply ChainOptimized routing, order combining and collection using ML
- PredictionPredicting shopping behavior patterns to prevent returns
- InventoryOptimizing product selection to minimize inventory
- ShelvingCombining ML and image-recognition to improve in-store shelf product placements
Augmented Reality (AR)
Augmented reality (AR) is another technology that retailers are embracing to enhance and facilitate the shopping experience. Below is an example of how US retailer GAP has used VR tech to allow shoppers to ‘try on’ clothes without needing to visit a store. The retailer’s DressingRoom app creates a virtual 3D model in front of the shopper to show how different items would look being worn. Nike, Asos and John Lewis have all additionally introduced their own AR applications in 2019.
Digital signage is becoming an increasingly common feature of brick-and-mortar stores, whether in the form of video walls, advertisements or product information points (PiP). Brands like Tommy Hilfiger have utilised the feature to provide a cohesive omnichannel experience for its shoppers. The brand uses monitors called ‘Digital Endless Aisles’ which allow customers to access its entire online collection while in the store. If somethings not in stock? No problem. The shopper can then order something to the store or, alternatively, to their home.
Daan Lucas is the founder of Amsterdam-based design studio, Random Studio, which worked with Tommy Hilfiger on its omnichannel screen strategy. “It’s fine simply having screens in a store, but they need to really engage the shopper,” Lucas said. Random Studios has worked with the likes of Nike, Raf Simons, Tommy Hilfiger and Ted Baker on creating innovative shopping experiences that focus on an omni channel approach. Lucas believes that in the future, screens could play an integral part in a store experience, blending seamlessly with the infrastructure of the store and reacting seamlessly to shoppers behaviours.
An example of this technology already being tested is by South Korean fashion brand Beanpole and its collaboration with Samsung. When shoppers at Beanpole’s stores pick up certain items hanging on interactive hangers, the monitors above them immediately pull up the item’s details on a screen.
In this case, the screen becomes an extension of the physical space, adding practical functionality which seamlessly boosts the shopping experience.
"In ten years time there will be robots in our stores, what they do there exactly, how they are used, I do not know yet, but they will be there, I'm sure." That's what Tommy Hilfiger CEO Daniel Grieder, said in November at internet technology congress Web Summit. That concept is already being trialled. In 2017, shopping centre group Intu introduced the world to Bo, Europe’s first ever ‘shop-bot’ robot made to interact with shoppers at the group’s Milton Keynes shopping centre. Bo can direct shoppers to specific parts of the store and inform them about special offers. Future retail roles for robots likely include stock and transaction management and customer services.
The retail landscape is continually evolving. Customers today are no longer satisfied with a store simply displaying merchandise; they want to be inspired and entertained. Brands and retailers must adapt to these changing expectations, and make use of the new opportunities to connect and build relationships with the modern shopper.
Homepage image: Amazon pop-up by FashionUnited
All other imagery: Heidi Law for FashionUnited