Editorial / Hot Topics
Is Fashion As We Know It F#@ked?
- 21st September
- Grant Arnott 209
The ‘Perfect Storm’ of current retail conditions described by many as the worst in 30 years in Australia has crushed an alarming number of fashion brands in 2011. Is it merely a cycle as some suggest, or is fashion retail as we know it gone forever?
One retailer’s annus horribilis is another’s goldmine. While the popular business press is peddling the misery of fashion retail and the alarming rate of company closures, online retailers are revelling in the new climate. Just yesterday private shopping club OzSale kicked a few more already-down retailers just when they needed it, announcing it had attracted nearly 4.3 million shoppers last month. “Our sales in August were what we had forecast for November – Christmas has certainly come early,” bragged Jamie Jackson, Founder and Chairman of Ozsale. Jackson also countered the view that Australian customers have reined in spending habits, stating that shoppers are simply “choosing to go online to get the best deals on international and Australian brands.”
So where does that leave the traditional fashion retailer, blaming tough economic conditions for the fact that sales are down? A few weeks ago 60 Minutes aired a segment on the online fashion shopping boom, highlighting what you reading this have long known – Australians are more than comfortable shopping for fashion online, and more than comfortable buying goods from international retailers and having them delivered to the doorstep. In fact, more and more Australians are being convinced that the online fashion shopping experience trumps the in-store version.
It saddened me watching that segment and seeing David Mendels, Managing Director of the International Fashion Group and one of the retail coalition leaders, expressing his nostalgic love for the touch and texture of fabric. Unfortunately, those he leads into retail battle are going to be mauled – outmoded thinking is unsustainable, and protection ain’t coming. Right now, many traditional fashion retailers are hanging their hopes on a couple of myths, and the sooner they realise they’re living in a fantasy world, the sooner they can get on a track to take advantage of the tectonic shifts in fashion retailing.
Myth #1: Customers want to see and feel the product first. This is simply no longer the case, and the ever-increasing richness of media available to enhance the online fashion shopping experience (like the example at right showing close-up of texture from ASOS) will further erode this outdated argument. It’s not only the pictures that provide a rich experience, but the customer ratings and also comments around sizing, etc. that help confirm the online shopper’s decision. In fact, more online shoppers rate the reviews of their peers over the recommendations of the store person.
Myth #2: Online shopping is only a very small percentage of retail sales. That may be a snapshot right at this point in time, but online revenues are growing exponentially in Australia and around the world. At the Shop.org Summit in Boston last week, keynote speaker Bill Bass predicted online sales will level out at an average of 30% of retail revenues. There is huge growth ahead, and there is absolutely no reason why this would subside. Online shopping is still improving – and fast – meaning that what was a so-so experience a year or two ago is now pretty good and set to become excellent in the next year or two. Any retailer who believes otherwise is in denial, and deserves to fail.
Myth #3: The government has to do something to protect the retail sector. The ill-fated lobbying by the Retail Coalition drew nothing but derision from both the Australian public and the Federal Government, whose Productivity Commission delivered a two-finger salute to the retail sector. The message was “Get your shit together retailers and compete in the modern global market!”, conveying no sympathy for retail struggles. That has been a boon for international retailers – I just returned from the Shop.org Summit, one of the premier digital retail conferences in the world, and I can assure you EVERY retailer there knows of the favourable $1000 GST threshold on imports in Australia.
So what is the future of fashion? How many more retailers need to bite the bullet before we see a shift in strategy? Where do fashion retailers start if they want to be competitive online? How do you make the transition from on-the-rack to pick-and-pack without killing profit? Who’s doing it well and setting themselves up to survive and thrive?
We’re discussing this hot topic with a panel representing a cross-section of industry next week in Sydney, which is free for all expo attendees at the Online Retailer Conference and E-Commerce Expo. It’s at 12.30pm next Wednesday 28 September in the Big Ideas Theatre in Hall 6 of the Sydney Convention and Exhibition Centre, and features David Briskin, CEO, Sass & Bide, Martin Newman, Director, Practicology, Assia Benmedjdoub, Editor, RagTrader, and Daniel Jarosch, Director, BrandsExclusive.
We want to hear what your thoughts are on the future of Australian fashion retailing – with ASOS landing last week and increasing competition from abroad, what will Australian fashion retail look like in 2012-13?
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I was coming to the Expo but now cannot make it. Is there any chance that the Keynote by Jon Kamaluddin from ASOS and the Fashion Forum can be arranged to be streamed or recorded for viewing later? I think that they would both be invaluable for the Fashion Industry to hear.
I wonder if the bricks and mortar retailers asking for govt support to help “protect aussie jobs” will also be happy for government support to also go to online retailers (like yours truly) who are ‘creating aussie jobs”?
Wow! This is a very strongly positioned opinion. I’m not conjvinced that customers no longer want to see and feel the product first. Yes, a close up of a bit of cloth can be shown and it’s a worthy attempt to address the lack of tangibility involved with e-fashion products, but really, does that provide information on weight, fall, texture to touch and subtelty of colour..not to mention fit. Not very well is the anwser.
But not just that…store shopping is a very human activity. It’s often done as a social exercise. When retail (particularly fashion retail) is done right, it’s a sensory experience, in that multiple products are viewed and felt in a single trip, engaging and knowledgable staff are interacted with, a beautiful store with sexy lighting and great music and intriguing design touches is enjoyed.
And if the retailer has grappled the digital realities properly, touch-screens can interactively showcase product origin, applications and uses, back-story , provide social sharing, upload to mobile for later review, loyalty sign-up or even on the spot e-purchase to be delivered the next day.
This is the model for the future that we’re working on at Emstream; it sees the on and offline worlds integrate and it recognises that fashion is not simply a commodity, it’s a highly emotive and involving category where effective delivery of brand promise will continue to be key.
As for Myth 2 …I generally agree the share of online spend will increase and it’s no surprise to see the ecommerce boys talking up their future prospects! It’ll come down to how well retail re-invents the customer experience.
And Myth 3…I couldn’t agree more.
Nice article Grant. I think what you missed out is that some retailers and mostly the larger chains have some of the worst customer service that we have ever been exposed to. So in a way they are their own worst enemy. Recently I picked up a few hundred dollars in shirts in a store and then waited for 10 minutes or more for someone to take my money. I gave up, left the shirts and bought online. There seem to be a lot of staff in some of the stores that are trained specifically to avoid customer contact. Maybe they need a wake up call and declining sales is a big alarm clock.
Touch and feel is important and I don’t believe we have nailed this down online yet but we are getting better.
The panel discussion is a good idea so well done. Interesting to see how many of the traditional retailers will be seen attending.
Online retailers who offer 100% money-back guarantee and plenty of customer reviews are doing well because they reassure the buyer that they can’t really go wrong. I’ve bought clothes from Gap on sale many times because customers provide huge detail about the cut, style, size, fit and colour about the clothing item, giving you enough to make your decision.
I think the real issue about retailers failing is that there is far too much fashion world concentration on skinny little Gen Ys and Zs and they’ve ignored the cashed-up Gen Xers and Baby Boomers who want something flattering!
And they seem to hire too way many surly, eye-rolling shop assistants who are too busy adjusting their flat-ironed hair and Adele-style eyeliner to give me decent service.
The article is right on the money. Traditional retailers will continue to disappear while online sale sites like ozsale etc selling at up to 70% off RRP will prosper.Prices will need to drop prices to compete with OS retailers, All this means lower retail sales, lower profits for all but the winners, which in turn = less $ collected by the government in company tax and duty and GST lost from OS purchases. I love capitalism, but there will be a cost associated with all these inevitable changes.
Elizabeth Hall (above) is completely correct. We have factory outlets full of sizes that don’t sell (the waste there alone is deplorable) … and yet people like me can’t find what we’d be happy to pay full retail on in the B&M stores. I am a cashed up IT professional whose proportions sit outside the norm (narrow back, big bust, smaller than average feet, etc.) – so price for me is not the driver, its finding a product that I can actually wear. I have money I’m happy to spend, but the stores here (and apparently the designers) focus their efforts and manufacturing (and egos) on slim, flat chested, giant-footed girls aged between 13-29. I simply cannot find clothes and shoes to fit me in the B&M stores here in Australia. Its the prerogative and right of stores/designers to create and sell what they like to who they like, but like much in this life, you can’t have it both ways – i.e. cater to specific markets only AND collect a lion’s share of consumer dollars. Retail, if you want my money … come get it, its right here … but don’t be surprised if I ask in return that you provide me with clothes, shoes and underwear that fit me. Until you do that, I will continue to purchase things that meet my needs EXACTLY elsewhere … wherever that may be.
Have you tried birdsnest.com.au Cate? They have an excellent Style Finder that might answer your prayers.