After the disruption caused by the coronavirus pandemic in 2020, the global fashion industry is retracing its steps back to normalcy. The fashion business has always been significant, and now it’s all set to boom and become colossal in the coming years.
The size of the global fashion market reached USD 1.9 trillion in 2019 and is predicted to cross USD 3 trillion by 2030.
Fashion comprises the largest segment of the B2C e-commerce market. In 2020, the global fashion e-commerce market was estimated at USD 550 billion. It is expected to grow at over 13% annually to attain a total market size of around USD 1.9 trillion by 2030.
By the end of this decade, more than 60% of the global fashion industry will be driven through e-commerce!
Current State of the Global Fashion E-commerce Industry
E-commerce will be the future of fashion; however, there are particular challenges that fashion brands face, limiting their expansion in the online realm. Some of the significant challenges are:
- Soaring ad prices and customer acquisition costs
While the global economy is striving hard to recover from the pandemic, the dominance of reigning social platforms like Facebook, Instagram, etc., and Google has resulted in rising advertising rates and, thus, customer acquisition costs.
According to Marketplace Pulse, advertising on Amazon costs approximately USD 1.2 per click at the end of 2021, up by 30% from USD 0.93 at the start of the year.
- Creating an attractive experience and retaining customers on the platform
As digital technologies become more sophisticated, the demands of modern customers have also touched the roof.
The attention span of customers has declined drastically, and it does not take more than a few seconds for them to build a judgment towards any website. Almost 40% of customers tend to leave a website immediately if they find it unappealing. Brands need to ensure that their digital experience is highly impactful for users to reduce friction and add value to the customer buying journey.
Providing an omnichannel, personalized experience across the web, building engaging and relevant content, and providing frictionless checkout is essential to increase conversions and encourage repeat purchases.
- Jostling with platforms like TikTok to build a loyal user base
There are over 4.62 billion users on social media. The user base has grown by 12% annually over the last decade. Further, social media has added 1 million users every day since last year. Moreover, an average user today is spending close to two and a half hours on social media.
Popular social media platforms like TikTok, Instagram, etc., have taken on the mantle of becoming a gateway for social commerce.
According to eMarketer, social commerce users in the US are expected to grow from 80 million in 2020 to 96 million in 2022, a whopping 25% increase in just two years, constituting 36% of all internet users in the US!
Legacy brands may have a tough time building their user base and competing with digital-native brands, which are highly prevalent on these platforms.
- No access to first-party customer data
Customers spend an increasing amount of time on the web – be it the brand’s website, e-commerce marketplaces, or social media. Digital marketers are constantly looking to understand the customer journey and finding ways to simplify product discovery.
As per Statista, 83% of digital marketers are heavily dependent on third-party data (cookies) for understanding customer behavior and use it to personalize their experiences. For this purpose, digital marketers require third-party data, or what we commonly know as cookies. The cookies are tracked when the customer visits the website and consents to share their information.
E-commerce marketplaces and social media platforms like Amazon, Google, Facebook, Alibaba, TikTok, etc., have built highly advanced systems that extract insights-rich data (second-party data) across each customer journey stage on their platforms. Thus, they can now effectively pre-empt customer preferences and sell relevant products and services. However, fashion brands selling on these platforms are not privy to this information.
These brands often rely on cookies to target the right customers, build relationships, and ensure business growth. However, Google’s recent announcement of phasing out third-party cookies to provide greater data privacy is causing many headaches to marketers. Without these rich data sources, brands will be at a loss in gauging customer behavior.
Hence, brands need to think about building systems that guarantee data ownership.
- Keeping costs down due to supply chain issues
The global COVID-19 crisis led to unsolicited lockdowns inciting supply chain issues, from sourcing raw materials and manufacturing to transporting finished products across continents.
To gain a competitive advantage, the fashion brands are perpetually striving to minimize supply chain disruption and keep the costs down amidst the intense competition.
Recently, Benetton turned away from low-cost manufacturing locations in Asia to bring them closer to home in Eastern Europe and North Africa. This strategic move will help the brand cut down on the delivery timelines and have greater control over the entire supply chain.
- Innovation in the experience to cater to GenZ
GenZ is the latest generation to join the consumer bandwagon. However, compared to the previous generations, GenZ uses various digital platforms to engage with brands. They want the fashion brands to ‘speak to them’ and provide them with a satisfying experience, which they can share with others too over social media.
Case in point, 32% of millennials and 23% of GenZ in the US currently use some AR technology.
Therefore, fashion brands need to engage in fabulous storytelling, avoid cookie-cutter digital approaches, and create unique, personalized experiences to connect with young patrons and build a solid consumer base.
Future of Fashion
To overcome the challenges and stay ahead of the technology curve, fashion brands should look at formulating a comprehensive Livestream shopping strategy.
The success of video-led social media platforms like TikTok, Instagram Reels, etc., has brought important insight into the consumer demand for an immersive experience.
Livestream shopping combines the joy of shopping, entertainment, and education in a very seamless fashion. Consumers can experience a completely immersive shopping environment where they interact with brands and form an opinion about the product or service by connecting with other users while having an enjoyable experience throughout. Further, the integration of commerce and content is already happening.
Finally, the massive success of China’s Livestream shopping model, which is contributing USD 363 billion in 2021, has caught the attention of fashion brands worldwide, and we will get to see a lot of them jumping on the bandwagon in the coming times.
This is the future of fashion, and brands need to be ready. Here’s a quick guide on how to crack this opportunity.
- Integrate content and commerce with shoppable videos and live stream shopping
Brands are well-aware that content plays a critical role in e-commerce in building brand authority, boosting site traffic, and improving conversions. Simply adding videos to the brand website isn’t working out anymore.
Brands must integrate top-notch content and e-commerce with Livestream shopping to create a unique shopping experience and address the instant gratification of customers.
For example, FMCG major Heinz showcased a Livestream on their website and across social media to promote their first-ever Halloween pop-up event across the country. With the shoppable video feature, it was able to get a 7% Livestream engagement rate, while the entire campaign received over 16 million impressions across all platforms.
- Personalization: One-to-one live stream shopping, especially for luxury brands, made-to-order products
For luxury brands, enabling live stream shopping isn’t the answer. They need to up their game and offer an immersive video shopping experience to elite patrons keen to splurge on opulent products.
The luxury brands can elevate the customer service by providing one-to-one Livestream shopping opportunities and leveraging AR/VR technologies for the consumers. This unique, personalized experience can give consumers the feel of the exclusive ambiance that they get in physical stores.
Gucci became the first luxury brand to introduce the concept of ‘remote clienting’ with a shoppable video interface called Gucci aLive. The brand successfully replicated its in-store shopping experience for its premium clientele – enabling real-time conversations with well-dressed staff, leading to a highly bespoke experience.
- Create vertical videos for your e-commerce fashion brand with swipe features
Swiping left for ‘NO’ and swiping right for ‘YES’ is a remarkable feature that e-commerce fashion brands can adopt to increase engagement.
The swipeable video shopping interface allows users to select the preferred product or pass it through a simple swipe. The vertical video content simplifies the browsing experience and enables the shoppers to check out more products per visit. This leads to higher conversion rates.
For example, Purple Panchi, a made-to-order premium Indian ethnic wear label, experienced an 18% increase in click-through rate on its ‘buy’ button page after incorporating an endless carousel feature and stylish product videos to keep the users engaged.
- Influencer Marketing: Turn nano influencers into key opinion leaders
E-commerce fashion brands must focus on leveraging nano influencers to create the highest level of engagement through Livestream shopping.
Celebrities and macro-influencers are usually very expensive to hire. Still, the success of a campaign is not guaranteed due to lower engagement rates. Instead, according to a survey, a nano-influencer with a few thousand followers can lead to 10X more engagement than their more famous peers at considerably lower costs.
Nano-influencers, who are likely to have a real-life connection with their followers, can be turned into KOLs (key opinion leaders) to achieve higher conversions.
- Regular Livestream campaigns as a habit-building exercise
Scheduling Livestream shopping campaigns is essential to create customer engagement and experiment with different products. Track the campaign performance using various KPIs to enhance the live commerce experience for the consumers.
Taobao Live, the world’s largest Livestream shopping marketplace, allows influencers of all sizes to market various kinds of products and services. Their scale is such that over 60,000 live streams happen every month. The influencers conduct more events regularly so that their users stay habituated to the whole concept of Livestream commerce.
- Focus on seamless payment integration with live stream shopping
One-click checkout experience minimizes the chance of a shopper getting distracted and stalling the purchase of the chosen product. Fashion brands need to implement seamless payment integration with their shoppable videos and Livestream shopping to improve conversion rates.
- Create an authentic shopping experience that enables interaction with other shoppers, brand representatives
Brands should look at enabling a complete live commerce experience that replicates an in-store purchase. Shoppers must be able to interact with other shoppers over video shopping to gauge each other’s preferences and reasons for opting for a particular product.
They should also be able to interact with brand representatives who can provide factual information on the products and guide the customer towards completing the purchase.
- Leverage social media and the open web to get traffic back to your site
Today, consumers prefer to check out a brand’s website before completing a purchasing decision. The website has become most shoppers’ starting point in the product search and purchase journey. In fact, as per a recent survey, around 40% of the consumers prefer finding a product on a brand’s website, compared to ~25% of customers who would search on an e-commerce marketplace or an internet search engine. Since 2019, higher purchase intent and conversion rates have been observed on retailer/brand websites, not online marketplaces or social media.
Therefore, fashion brands must make conscious efforts to redirect and regain user traffic back to their website from the various social media handles and the open web.
One effective way is to run a live stream simulcast where the same shoppable video is streamed simultaneously across their website and social media.
Brands can also consider running video advertisements on social media, enticing probable customers to visit their website for a better live commerce experience.
How Firework can transform your fashion brand’s growth
Firework is at the forefront of globally enabling the live commerce experience for brands and retailers. Through Firework’s industry-leading platform, brands can:
- Use the Firework Studio tool to build customized, mobile-optimized shoppable videos and swipeable web stories
- Leverage advanced analytics to track the performance of their Livestream shopping content
- Create vertical video ads for effective website monetization
- Host high-quality live streams which facilitate real-time customer interaction
Power their live commerce experience through Firework’s expert consultation services.