Online sales are continuously growing in the fashion retail sector
Consumers are decidedly future-oriented and are adapting to the mobile use of technology. However, there is a gap between their high expectations for online shopping and the reality offered by brands who struggle to provide an experience that fully meets the customers' needs. Though 75% of consumers have high expectations for the online shopping experience, only 63% feel that brands manage to fully satisfy them.
Digital and Physical Shopping Experiences Go Hand in Hand
Despite the rise of online clothing and accessory purchases, physical stores retain their relevance. Consumer purchasing journeys no longer follow a linear path. They have adopted an approach that combines online and in-store experiences when making purchases. They have become accustomed to navigating between the two channels to achieve the best possible experience. This shift in purchasing behavior underscores the importance for brands to provide consistent and complementary experiences across different touchpoints, whether online or physical.
The "phygital" trend has compelled physical touchpoints to reconsider their objectives. A Forrester study showed that 40% of connected consumers much prefer shopping in stores today than before the pandemic, but 40% say they don't rule out going to physical stores. Why? One of the reasons is frustration with online shopping.
Studies highlight two areas crucially important for fashion brands and retailers: improving the online experience and reinventing the in-store experience.
Phygital, a contraction of the words "physical" and "digital," is an emerging concept aimed at combining the best of both worlds to provide a unique shopping experience for consumers.
Integration of Digital into the Physical Environment
- Connected Spaces: Physical stores are transforming into connected spaces where consumers can interact with touch screens, interactive mirrors, and other digital devices to obtain additional information about products, check online reviews, or even place orders.
- Interactive Kiosks: Interactive kiosks allow customers to access a wide range of products, check real-time inventory, compare prices, and even place orders directly from the physical store.
Enhancing the Online Shopping Experience
- Augmented Reality: Through augmented reality, consumers can virtually visualize products in their real environment before making online purchases. This helps reduce uncertainty associated with online shopping and enhances consumer confidence.
- Chatbots and Virtual Assistants: Chatbots and virtual assistants provide personalized assistance to consumers by answering their questions, guiding them through the purchasing process, and offering recommendations based on their preferences and needs.
Data Collection for Increased Personalization
Connected Loyalty Programs: Loyalty programs are increasingly integrated into online platforms, allowing consumers to benefit from personalized perks and targeted promotions based on their buying habits.
Data Analysis: Through data analysis, retailers can gather valuable insights into consumer behavior, preferences, and purchasing habits, enabling them to further personalize the shopping experience by providing specific offers and products tailored to their needs.
Phygital offers exciting new possibilities for retail by skillfully combining the advantages of the physical and digital worlds. By integrating digital elements into physical stores and enhancing the online shopping experience, retailers can offer an immersive, personalized, and convenient customer experience. Phygital is the future of retail, allowing consumers to enjoy the best of both worlds in their shopping journeys
Messaging and Omnichannel Approach
Messaging has become a common and ubiquitous practice in our daily lives, whether it's exchanging messages with loved ones or in the professional realm. In the fashion industry, messaging has also emerged as an essential tool. This new mode of communication provides a seamless and personalized experience, placing the customer at the center of the relationship with the brand. It offers a more pleasant and less frustrating alternative compared to traditional channels like phone and email.
Due to the value of data collected from customers, brands are increasingly opting for direct-to-consumer (D2C) sales, whether online or in their physical stores, alongside certain major accounts.The rise of "direct-to-consumer (D2C) sales" involves selling products directly to customers without intermediaries, often by creating an online store and implementing effective marketing strategies to establish customer relationships and enhance the overall shopping experience.
According to McKinsey's "State of Fashion" report, for brands and retailers, in addition to improving the customer experience, the objectives of a conversational strategy including messaging are as follows:
- Increase direct-to-consumer (D2C) sales
- Develop a web-to-store strategy
Online exchanges help build trust, strengthen loyalty, and encourage consumers to maintain a multidimensional relationship with the brand. A successful online experience leads to increased interactions, including in-store interactions.
Thanks to today's technological advancements, it's possible to merge human interactions with artificial intelligence to understand customer needs through AI chatbots, creating a form of augmented intelligence. In simple terms, these virtual agents guide shoppers throughout their journey, whether they're considering purchasing clothing, seeking information about their purchases, or asking questions about previously bought products.
The Role of Conversations in the Returns Management Fashion Industry Department
In the fashion industry, brands are grappling with the challenge of returns. Changes in how consumers interact with brands and make purchasing decisions have led to an increase in the number of products being returned to sellers. The rise of online sales channels and the ease of returns (often free for customers) have altered the nature of purchases. Orders are now viewed more as a risk-free trial rather than a definitive purchase. According to McKinsey, this trend is particularly noticeable in categories such as women's dresses and shoes.
The financial impact of returns is significant, encompassing costs related to shipping and returns, as well as a decrease in revenue, not to mention the risk of permanently losing a customer due to a disappointing experience. Despite this, the fashion industry rarely addresses this issue due to its complexity. McKinsey identifies three obstacles hindering companies' efforts to resolve it:
Retailers aiming to satisfy consumers feel compelled to accept a high level of returns. Achieving efficiency in reverse logistics is challenging. A lack of data prevents companies from truly understanding and addressing root causes. However, thanks to online conversations, advice on sizes, colors, and styles is available both in-store and on websites. This interaction goes beyond simple real-time chat exchanges with a chatbot, advisor, or expert on a brand's website, now also including video calls. As a result, in-store salespeople can initiate video calls with customers in need of online advice, highlighting the phygitalization of retail.
This mode of communication breaks down the digital barrier between consumers and brands, offering a new dimension to online shopping. Video calls can be extremely helpful to show colors under different lighting, demonstrate how different items combine, or provide a more detailed description of fit. In short, they allow consumers to have a more immersive and personalized online shopping experience.
Conversational fashion brands are industry leaders in customer experience as they can assist customers throughout their journey across as many channels as necessary. In the race for customer experience, loyalty, and innovation, the "wow" effect is essential. Fashion is one of the most advanced industries in terms of conversational commerce, offering an increased opportunity for direct purchasing.
When it comes to clothing and shoes, one of the major challenges of online shopping is choosing the right size. Size recommendations are features that help consumers find the ideal size. Here's how they can enhance the shopping experience:
Reduced Returns: By suggesting the most appropriate size based on the consumer's measurements and preferences, size recommendations can help minimize returns due to incorrect sizing. Personalized Recommendations: Using size data and consumer preferences, size recommendations can offer tailored suggestions that match the consumer's body shape and fit preferences. Increased Confidence: By providing a more accurate size experience and reducing the risk of errors, size recommendations can boost consumer confidence in their online purchases.
In the constantly expanding world of e-commerce, product recommendations and size recommendations are essential tools for personalizing the online shopping experience. By providing relevant suggestions tailored to individual consumer preferences, these features improve customer satisfaction, increase sales, and mitigate issues related to sizing.
For more details on the topic, you can refer to the article at https://cleed.ai/blog/2022-08-25-the-sizing-a-major-challenge.
Live Shopping: An Immersive and Interactive Customer Experience
In the fashion industry, the growing popularity of live shopping is impossible to ignore. Lockdown restrictions and the need for brands to find new avenues for sales have accelerated the adoption of live product and service demonstrations on websites and social media. These experiences, both entertaining and commercial, have become an essential global trend and will continue to gain importance in the coming years. Brands that have embraced this approach have witnessed conversion rates approaching 30%, up to 10 times higher than traditional e-commerce.
In many ways, live shopping follows the path paved by the fashion industry's collaboration with influencers. Live events are announced and broadcasted on social media. In fact, they are typically hosted by influential personalities in these fields, also known as Key Opinion Leaders (KOLs).
Influencer marketing is closely tied to the fashion industry and has become increasingly significant in recent years. Like any digital phenomenon, the year 2020 represented both a turning point and an acceleration.
The experience must be at the heart of concerns for the marketing, e-commerce, and customer service departments of major fashion brands. It has become increasingly valuable to consumers in recent years. 84% state that the experience offered by a company is just as important as products and services. 66% of consumers are even willing to pay more for an enhanced experience.
The fashion industry, especially the luxury sector, has understood this notion perfectly. Despite the impacts of the pandemic, it has excelled by pushing the boundaries of exclusive fashion shows and offering new experiences accessible with a simple click. This new generation of shows has generated considerable excitement with over 100 million views, thanks to their online accessibility, live streaming, and on-demand features, such as the live-streamed Dior Men 2021 show from Beijing.
"Digital is not an alternative. It's a complement, offering a new form of expression for fashion houses."
Fashion brands and retailers can leverage technological advancements, including smartphones, to take inspiration from industry leaders and organize live sessions with an attractive return on investment. Through the immersive and interactive experience of live shopping, consumers can explore products from a detailed and innovative perspective (ideally in 30 to 45-minute sessions), all while enjoying entertainment. This combination is a winning formula.
Improving Transparency in the Fashion Industry through Conversational Experiences
Fashion and accessory brands are turning to conversational commerce to enhance their customers' online shopping experience, reducing frustration and enriching their digital journey.
The fashion industry is undergoing a digital transition, presenting significant challenges. Easy access to an abundance of information has generated new expectations among customers. They increasingly seek a trustworthy relationship with their favorite brands and place great importance on transparency.
According to a survey by McKinsey, a majority of 67% of European consumers consider the use of sustainable materials as a key element in their purchasing decisions. Furthermore, 63% of them believe that a brand's promotion of sustainability is an important factor when making purchases. This requirement for transparency calls for enhanced communication regarding brand commitments, not only on their websites and those of retailers but also through interactions with customers via messaging.
Product and Size Recommendations: A Major E-commerce Asset
In the realm of online commerce, product and size recommendations play a crucial role. Through the use of advanced technology and customer data, e-commerce sites can offer personalized suggestions, enhancing the consumer shopping experience. In this section, we will explore the importance of product and size recommendations in the world of e-commerce and the benefits they offer to consumers and merchants.
The Cleed.ai Product Recommendations Application: How Does It Work?
Product recommendations are intelligent algorithms that analyze a consumer's preferences.
With our tools, user data is collected from various sources, such as purchase history, browsing behaviors, viewed products, search queries, declared preferences, and sometimes even demographic data. This information is then used to create user profiles.
User profiles are subsequently analyzed using algorithms that examine the collected data to identify patterns, preferences, and similarities among users. These algorithms may use techniques like collaborative filtering (based on purchasing behavior or similar interests of other users) or content-based filtering (analyzing the characteristics of the products themselves).
Once user profiles are analyzed, Cleed.ai's recommendation algorithms seek to find matches between the profiles and products available on the platform. They use techniques like product similarity, association of frequently co-purchased items, or recommendations based on categories or tags.
The algorithms then generate personalized product recommendations based on the identified matches. These recommendations are presented to users as suggestions on the homepage, in the "recommended products" section, or when viewing a specific product.
For ongoing optimization through self-learning, our tools also collect data on user interactions with the received product recommendations, such as clicks, add-to-cart actions, and purchases. This data is used to continuously improve recommendation algorithms by adjusting models, refining matches, and considering user feedback.
Here are some key benefits of product recommendations:
- Personalized Shopping Experience: Through product recommendations, consumers can discover new items that may interest them based on their tastes and preferences.
- Increased Sales: By offering relevant and appealing products, recommendations encourage consumers to make more purchases, resulting in increased sales for our clients.
- Reduced Search Efforts: Product recommendations streamline the search process by suggesting similar or complementary products to those already viewed. Users can quickly find what they're looking for, preventing retailers from losing sales.
- Enhanced Customer Satisfaction: Personalized product recommendations show that we understand customer preferences and needs, increasing their satisfaction and loyalty to our brand.
- Catalog Optimization: Product recommendations help us better understand customer preferences and market trends, enabling us to tailor our offerings and optimize our catalog based on demand.
- Reduced Returns: By suggesting products that match customer preferences, product recommendations help reduce returns due to unsatisfactory purchases, improving our clients' operational efficiency. Improved
- Product Discovery: Product recommendations assist customers in discovering items they might not have found on their own, broadening their shopping experience and encouraging them to explore new options.
In summary, personalized product recommendations offer considerable benefits for both consumers and retailers. They enhance the shopping experience, boost sales, reduce search efforts, improve customer satisfaction, optimize the catalog, and promote product discovery.