Sustainable-growth-in-an-industry-on-the-cusp-of-disruption

Sustainable online growth in fashion retail

How to thrive in a varied and challenging ecommerce landscape

If you’re looking for something to scratch your head over, take a look at Amazon’s recent leap into fashion. Amazon has leveraged its Prime membership to quickly overtake Walmart as the number one clothing retailer in the US. It has also made no secret of its desire to dominate the industry by designing its own line-up of fashion brands. 

But rather than worry about the growth and potential disruption of Amazon, fashion brands and retailers need to be inspired and look at all of the possibilities for growth in online commerce to see where their own advantages lie.

Apparel brands have four major avenues to sell online: online retailers, marketplaces, social media platforms, and direct to consumer (DTC). Each has compelling advantages and disadvantages and none of them should be ignored.

Selling Direct To Consumer

The hardest shift in fashion (apparel and beauty) is moving from business to business (B2B) to DTC, using a brand’s own direct-to-consumer channels, including websites, apps, and integrations with other platforms. But these channels cost money and are outside a company’s core competency – so some brands are reluctant to go there.

However there are big advantages to DTC such as the ability to collect valuable first-party data and provide a great brand experience. The former is key in the race to deliver the personalisation consumers increasingly demand; the latter allows the brand to differentiate itself and create value perception in a competitive market.

Retailer sites versus Amazon

The advantage of selling through online retail partners lies both in the increased reach and the on-brand experience they offer. Most brands work hard to show up first in Amazon search, where it’s difficult to have a more compelling presence than their competitors. But they pay little attention to sites like Target or Nordstrom. Brands could see outsized returns on investment if they optimised their presence across multiple retailer sites.

The pros and cons of Amazon

For most brands, marketplaces mean Amazon, but they could also include Jet.com or even eBay. It’s relatively straightforward to make the case for Amazon: it dominates product search; it greatly reduces the complexity of online trading; it provides service that is as good as or even better than any brand offer; and in many geographies, it is the only way most brands can reach a consumer in two days or less.

What’s more, you can be on Amazon and still retain some control over your customers’ experience. Amazon has worked with companies to create branded spaces inside Amazon.com. For example, if you go to the J.Crew store on Amazon, most of the Amazon content disappears once you scroll down, leaving you in a J.Crew world.

The downside? Amazon is a walled garden. It keeps your data and can, at any time, use that data to launch its own brands that compete directly with yours. If you go 100% with Amazon, it may end up knowing your customers much better than you do.

Shopping on social media

Instagram has recently enabled shopping within its sites and apps. Given the heavy role the platform plays in fashion, this is a massive new avenue for clothing brands to sell online.

So, what can you conclude?

  1. Inspire growth on all platforms. You need DTC for data; retail partners for reach; marketplaces for sales and visibility; and social media because that’s where your customers are. 
  2. Do not ignore Amazon. Amazon is far too disruptive and successful to do that. Gain experience with the platform and keep tabs on it so as not to get swept away by an unexpected development. 
  3. Know your brand and what it stands for to create great branded experiences online. DTC is a great place to express your brand and turn casual shoppers into loyal customers.  
  4. Look for growth in social. Social media buying represents the biggest future avenue for growth for clothing brands. Launch social commerce on Instagram as soon as possible and be aware that Snapchat and Pinterest won’t be far behind.

The brands that take an omnichannel approach with a close eye on social will likely come out ahead in a varied and challenging ecommerce landscape. Those that keep doing what they’ve been doing are sure to be left behind.

Anthony Reeves

Chief Creative Officer, Wunderman Thompson

published on

27 November 2019

Category

Commerce

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