Standing out in a crowded sector – the future of fashion retail
Fashion retail this year and in years to come will be defined by some semblance of normality. Everyone seems to be recognizing that the pandemic is here for the long term and it feels like we are at a point of recognizing how our world has changed and what we should implement or leave behind.
We have seen a return to the high street more recently, but as consumers have now adapted to a more convenient way of shopping, it is hard to imagine us ever seeing physical shopping at pre-covid levels. To stay on top of ever-changing trends, retailers should seek to apply a multichannel model, giving their consumers the best of both worlds, creating value and competitive advantage, and refusing to slip behind future thinking competitors.
Unique offerings to set you apart
In 2022, my prediction is that brands will lessen their retail footprint, but deepen their investment into the functions and services that each space has to offer. For fashion, specifically, stores will serve as style centres, propelling themselves beyond a purchasing destination and into an immersive, tangible product experience that cannot be found online. I also anticipate that retail spaces will begin to operate as individual warehouse and distribution centres, facilitating the packing, shipping and delivery of orders on-site.
One of the most visible shifts we have noticed in recent years is that online stores and e-commerce networks have become increasingly important in the fashion retail market worldwide. This has been due to modern technology, not just in enabling the creation of websites and social media networks for increased advertisement, but in the running of Fulfilment Warehouses which aid the operational running of an e-commerce network. According to the McKinsey & Company 2021 report “State of Fashion”, 30% of fashion executives saw digital expansion to be the greatest opportunity for the fashion industry at present.
We are also seeing a clear evolution in online commerce in 2022 that can be seen as the beginning of the end of destination-based e-commerce sites like Amazon, Alibaba and other legacy e-commerce players. Digital commerce is moving from being centralised and search-based to becoming ambient and built into entertainment and social experiences.
Sustainability – the only way to sustain your fashion retail business
Despite the opportunities for fashion to continue to grow, an increase in sustainability, particularly amongst younger buyers, may just halt this. According to figures published by the UN, the fashion industry is responsible for 10% of global greenhouse gas emissions. Most emissions come from raw materials, so improving the way we produce polyester and cotton could have a huge impact. Challenging the current fast fashion ethos of the industry is going to be essential in the fight against global warming. According to figures published by McKinsey & Company, in 2020 the fashion industry outweighed the carbon footprint of international flights. The fashion industry has garnered a reputation for being wasteful, polluting and resulting in overconsumption of both energy and the products they offer.
The fast fashion, or medium-priced clothing model has allowed consumers to view their clothing as disposable, which has resulted in large amounts of waste and other environmental issues. The overconsumption of clothing means that clothes discarded after some period, end up in landfills – according to research by Clean Clothes Campaign, three out of five fast fashion items end up in landfills. Additionally, it has been found that less than 11% of fashion brands have recycling strategies implemented – considering the size of the fashion market, this is incredibly low and shows that while environmental attitudes and efforts are shifting the process is slow. The most competitive fashion retailers will know that now is the optimal time to create a sustainability strategy, but most importantly implement in a way that is transparent, effective and impactful.
For retailers looking to engage in a more sustainable offering, one of the best ways to do this is to look to the future and consider the benefits of technology – allowing part of their business to exist in the metaverse.
Moving into the metaverse – a more tech centric approach to fashion retail
The involvement of tech within the fashion industry will continue to allow rapid growth for many businesses. We have already seen the addition of AI chatbots for e-commerce and aid customer service. AI has also started to be deployed to make e-commerce shopping experiences and curate a more personalised affair through the virtual visualisation of products.
With fast fashion posing a threat not only to the environment but a business’ offering, tech can be of aid in reducing the volume of returns and increasing customer satisfaction. The implementation of AR/VR technologies, particularly for ecommerce retailers, which can allow the buyer to see what an item may look like on before the point of purchase – an almost virtual dressing room – can help slow the fashion cycle by limiting returns and helping shoppers decide what they really want to purchase.
Retailers are beginning to look outside the scope of traditional experiences and offer consumers a futuristic approach to their shopping experience – most notably with the integration of blockchain technology for things such as bitcoin payments, and the possibility of being able to sell NFTs via their e-commerce platforms.
The term ‘metaverse’ and what we can do within it has continued to gain traction within the business world, with many sectors now looking to see how they will fit in. The metaverse is still in its own early stages, and for forward-thinking retailers it is best to grow with this new concept, learning the new possibilities and advantages that this technology may provide their business offering.
Gen-Z, the same generation that have made their stance on sustainable clothing clear, are also the market for metaverse’s offerings, having grown up online and spending a huge proportion of their days on the internet – according to figures from 2020 Gen Z spent an average of eight hours per day on screens.
In a crowded industry, future thinking may be the key
It is the retailers who have their finger on the pulse that will continue to perform best in the years to come, adapting to new tech, new ideas and embracing the changes that COVID-19 made to the industry. Ecommerce is booming for now, but it is not enough to lean into one offering and refuse to explore new and exciting concepts for an exciting, but crowded sector.
Fergal O’Carroll is the chief revenue officer at delivery management company, Scurri, with responsibility for sales strategy and execution.
His prior roles include EMEA vice-president for commercial sales with Teradata for eight years; prior to that, he was managing director of business intelligence solutions with Avnet Client Solutions for 13 years.
Fergal holds a BA in Business Studies from the University of West London and is a native of Dublin, Ireland.
