Cathy Polinsky, CTO of online subscription and personal shopping service Stitch Fix; Florian Jansen, co-founder of e-commerce venture Lamoda; Josh Luber of resale platform StockX; and Jill Layfield, co-founder and CEO of Tamara Mellon, came together at Web Summit to share their thoughts on the modern retailer.
In 1997 clothing accounted for 6.2% of the U.S. economy, but in 2018 it’s less than half of that. But it’s all relative, the speakers assured. Whilst this might suggest a decline in clothing, consumer spending has witnessed an overall increase, with the surplus going into other industries such as technology, travel and experiences. Also take into consideration that price points have decreased, and clothing is more universal — you can now wear jeans and a T-shirt whether you’re going to a park or heading a board meeting.
Yet despite these changes we are seeing an increase of traditionally online retailers shifting into brick-and-mortar spaces. And is it any wonder? The algorithm that makes the online experience so efficient at optimising to purchase, if harnessed well, can revolutionise the physical space. Consumers are demanding a different experience for the apparel industry and there is no reason why the physical experience cannot be curated by an algorithm, much like it is online.
The shopping experience must now include elements that consumers can’t find anywhere else. That can range from access to a personal stylist with whom the consumer develops a close relationship, or conversely creating a gamified experience with anonymous users that trade items as commodities. Experiences can even make customers feel like part of a community that then becomes a force when retailers have one-off events or application-only sales. This sense of community allows people to feel connected to a larger purpose.
A shared set of values, or a purpose-led company, is something that consumers are looking for more and more. In this sea of choice, consumers are shifting their purchasing power towards brands they feel are helping the world. Nowhere are their voices more evident than in the social space; it effects the influencers retail brands use (micro vs. celebrity) and the level of interaction the brands receive. Obviously, having someone like Meghan Markle wear a pair of your shoes moves the needle tremendously for any clothing brand.
Clothing brands also need to be careful with data. If it is the right mix of technology and human touch, consumers will see the value that their data is bringing in. For example, understanding demand for new sizes through data, or the use of Messenger to speed up the consumer journey. At the opposite end of the scale are companies like StockX, which is totally technology-led and all about supply and demand. People buy and sell sneakers like they do commodities, which can result in huge quantities of consumer data for brands. (Nike recently sold their new sneaker completely on the platform.)
The future of retail needs to focus on personalisation, whether digital or physical. The curation and discovery of new products will also need to improve for retail to grow beyond the current drivers of growth. Currently, in countries like the US and the UK, online sales only account for 15-17% of total clothing purchases, so physical spaces won’t be disappearing from malls or high streets any time soon — but there is certainly a lot that both channels can learn from each other.