As fashion’s future threads itself more intimately into the digital domain, fashion firms try to remain competitive through these times of fast change. Nearly everyone in fashion thinks that to succeed even in seasons of upheaval, brands must focus more on e-commerce. According to the McKinsey 2021 State of Fashion report, 70 percent of fashion executives predict more than 20 percent growth in their e-commerce channels. Indeed, the world’s leading fashion gurus deem e-commerce “the biggest opportunity by far” for businesses. And with firms scrambling to establish their imprint in the digital sphere, traditional retail suffers. Compared to 2019 levels, offline shop sales in Europe would likely drop by 8 to 13 percent, and U.S. offline sales are predicted to decline by 22 to 27 percent.
However, despite fashion firms are seeing decreasing levels of offline sales, brands still acknowledge the necessity of their retail base. Physical retail remains vital to a brand’s growth plan, believes Laura Pomerantz, a Forbes writer and professional retail real estate strategist. “Investors are demanding that shops rethink their real estate to maximise their space,” adds Pomerantz. But to maximise their retail space, how could fashion firms use manufacturing, especially in a time when online sales surpass in-store purchases?
Focus on an Omnichannel Customer Journey
Traditionally, a retail store’s performance hinged on how much stuff sold within the four walls of its retail area. But with the internet’s rise in the 1990s, brands rapidly realised they should create several channels of access through which customers could purchase things, including online stores. Through the multichannel shopping experience, brands gave consumers the option to engage on the channel they preferred.
And after a buyer chose their preferred channel, brands enhanced the purchasing experience within that channel specifically in order to increase customer engagement. Customers at this stage had access to a number of different shopping channels; however, these channels were not always integrated with one another. As a result of treating channels as if they were separate silos, the multichannel strategy severely restricted the possibilities for increasing engagement across channels. As a result, companies shifted their focus to the omnichannel strategy, which enabled them to combine the multichannel strategy with the omnichannel strategy and provide customers with more personalised goods, deals, and communications.
Because customers need a compelling reason to purchase offline, fashion brands need to substantially improve their in-store integration of omnichannel shopping in order to make the most of their retail space. They are accustomed to purchasing a diverse selection of goods online, and consumers won’t shop at traditional retail stores unless fashion firms give them a compelling reason to do so. In the next phase of industry expansion, McKinsey considers integrated omnichannel shopping experiences in physical stores to be “table stakes.” According to the results of a survey administered to executives working in the garment industry in the United States, 76 percent of respondents intend to strengthen omnichannel integration in stores. The following should be taken into consideration by fashion firms in order to drastically speed up this integration:
1. Reevaluate the function of the store. – Given that customers need a compelling reason to visit a store, fashion firms have a responsibility to examine the store’s position as more than just a venue for doing transactions. Instead, retailers should work to improve the ways in which customers may locate things while they are in the store. This process of discovering new products could include increased access to limited-edition wares (for example, by acquiring products that are available “in store only”). In order to provide a more exclusive shopping experience and maintain a high level of exclusivity for customers, it may be necessary to reduce the amount of store space available.
2.Maximize in-store pickup. – Consumers are placing a higher level of importance on the availability of contactless fulfilment alternatives, and retailers have the potential to play an essential role in the process. Consumers are able to have a more personalised shopping experience thanks to the fact that sales employees are able to communicate with customers while they are picking up their online orders from alternatives such as in-store pickup or curbside pickup. This helps improve omnichannel integration.
3. Customize the in-store touchpoints that customers have access to – It is important for employees working in stores to have access to consumer data such as loyalty and purchase behaviour in order to attract the attention of customers before they enter a store. Important consumer data collected prior to a customer’s visit to a physical location can contribute to the creation of a more personalised product discovery process that begins online but concludes in-store. This results in a shopping experience that is more cohesively integrated.
When it comes to in-store omnichannel integration, fashion firms are currently taking these practical steps.
They will need to consistently reevaluate their store layout in order to accommodate today’s savvy and ever-more-complicated consumer. If fashion firms are able to react to their customers in an appropriate manner, they will be able to convince clients who prefer to shop online to buy more and to make extra in-store purchases.
Creating a Production Plan with Your Manufacturer Will Help You Make the Most of Your Retail Space
In order to best enable omnichannel optimization, how should fashion firms design the processes that make up their supply chains?
In addition, what are some ways that companies may include digital innovation into the process of designing supply chains and speed up these decisions?
When dealing with the predictive approaches that assist in making these faster decisions, fashion firms should consider shortening the planning period and engaging with smaller producers. By taking this step, fashion firms may make themselves more adaptable to the frequent changes that occur in the sector and gain a better understanding of which sales channels they should prioritise.
Not to mention the fact that smaller manufacturers are frequently more accommodating to the alterations in production planning that a fashion brand requests. This is especially true when considering the fact that smaller manufacturers concentrate more on quality standards than volume limits. In addition, smaller firms typically keep a relatively closed network of suppliers and other manufacturing professionals that have been well screened. Fashion firms gain access to such insular networks as well as the more collaborative culture of the industry as a whole by forming relationships with smaller manufacturers. This is possible because smaller manufacturers retain a network that is built on both vested and personal interests. Therefore, these smaller manufacturers have the potential to play an essential part in the manufacturing success of a fashion brand. This is because they are able to provide fashion brands with more individualised solutions, demonstrate a greater willingness to go the extra mile, and even troubleshoot with fashion brands to find potential manufacturing solutions.
Fashion brands should make excellent use of crucial client information in order to properly plan production with manufacturers, particularly in the continuously changing climate that the fashion sector currently finds itself in. Given that the customer is placed ahead of the product as the primary focus of the omnichannel strategy, fashion firms should eventually keep in mind the importance of placing the requirements of their customers as their top priority. It is important for fashion companies to have a strong and in-depth awareness of the requirements of their customers, both in the present and in the future. Because information about customers will help fashion firms select which channels to serve, which items to serve, and where to offer them, having this in-depth insight plays an essential part in the process of achieving excellence across all omnichannel sales channels. Important customer information “should be combined with customer behaviour insights culled from customer interviews, observations, and the latest research from market experts, as well as analyses of competitors’ e-commerce offerings,” states a report published by McKinsey on the future of retail operations. Fashion brands are able to gain a clear understanding of the expectations of their customers, anticipate the changes in those expectations, and respond appropriately by leveraging this multidisciplinary analytic approach. All of this can be accomplished without running afoul of tightening online privacy regulation.