The fashion industry’s business model for clothing sold through e-tail channels is still in its infancy.
The fantasy of the future of eCommerce is tiled with drones and virtual reality. Right now, however, there are companies that don’t sell their clothing online…….Chanel being the most famous of them. Even for apparel companies that don’t sell online, there are many aspects of their businesses that will be affected by the internet whether they choose to embrace them or not. In the past, branding happened in a limited number of places, and sales happened in person, in stores. Branding now happens in magazines, newspapers, YouTube, Facebook, Instagram, blogs, Periscope and many other places. Content on social media platforms becomes an integral part of branding. Content on these platforms is not only a part of branding, but it is also a part of selling. In addition to branding and selling, it should be noted that content on social media is a large producer of trends.
Ecommerce is now every fashion house's goal and every department store’s Holy Grail, although there are costly obstacles to e-tail for the sale of clothing in particular. One of those obstacles is that no eCommerce site can be designed without consideration of social media. Even for clothing companies that don’t participate in eCommerce; the influence of social media on trends cannot be ignored. There isn’t any section of the industry that can exist in a vacuum separate from social media.
TECHNOLOGIES FOR SELLING FASHION VERSUS CLOTHING WITH EMBEDDED TECHNOLOGY
Many venture capitalists who invest in fashion are eager to find clothing companies that have a promising strategy to combine technology and fashion. Fashion and technology sounds very cool doesn’t it? The cool-factor of combining fashion and technology isn't enough to overcome the need for a thorough analysis of each individual business model though. And an investor looking for these two factors combined also must first decide which category they are interested in.
There are two categories of fashion and technology because there are two main ways to combine technology and fashion. One way is to marry technological innovations with eCommerce such as developing online relationship strategies, harnessing selling tools for direct purchasing on social media platforms and adding videos to E-tail product pages. The other way to combine technology with fashion is to build technologies into garments. Some consider the Apple watch to be fashion combined with technology. It is indeed wearable technology, but it isn’t technology that changes the experience of the wearer from head to toe. A garment that could change color with the push of a button would truly be a new kind of fashion experience. To me, the Apple Watch is a just a very cool wearable gadget.
I believe our closets will become “smart” before the majority of companies begin to invest in technologies being built into clothing and accessories. We have Nest thermostats, ovens that turn themselves off after cooking a meal, lights and alarm systems that can be controlled through our phones etc. We even can purchase clothing with RFID tags. Technically clothing with embedded RFID tags IS technology being built into fashion. But this particular technology of radio-frequency-identification is more about social media and tracking garments than about garments that transform like Hussein Chayalan’s famous collection from 2007. Right now, the most rewarding and exciting innovations for combining fashion and technology are coming in the form of eCommerce of which social media is a huge part of.
THE CURRENT STATE OF ECOMMERCE FOR FASHION
Many clothing companies are investing in eCommerce for the future. Right now, selling clothing online is more costly than selling clothes through brick and mortar retail channels. The reason that the investment in eCommerce can exceed the ROI is because of the need for extensive product photography & videos, social media influencer outreach, online advertising, and customer acquisition. However, there is no denying that the percentage of business made up by online sales will continue to grow as issues of fit, fabric, quality, color etc. are overcome for the goal of smoother online transactions. The result will be customers buying more online and fewer returns. As these issues are worked out, return-on-investment will increase.
The current reality of eCommerce in the fashion world is a mix of clothing companies that are creating unique online shopping experiences, companies that don’t sell online at all, and companies that are somewhere in the middle ground which is to say that they are laying the groundwork for the future. These middle-of-the road companies sell online, but it’s a smaller percentage of their business than most people would probably guess. Retail customers and people hoping to run an eCommerce site are often surprised to learn, in this day and age, that there are a number of successful clothing companies that don’t sell online. As I mentioned before, Chanel has resisted selling online, however they have admitted that this will change in the future. It’s difficult to take the current temperature on the niche industry of the sale of luxury goods through eCommerce. Multiple sources indicate that around 6% of luxury fashion items are sold online. Individual companies keep their specific percentage of eCommerce hidden though. Of course, there are companies who ONLY sell online, so the potential to develop a successful online strategy is there for the taking.
The fashion and clothing industry presents with some fairly unique issues when it comes to eCommerce. Despite Levi’s unique fitting system, Neiman Marcus’s customer service reps who will measure garments while on the phone with customers, Rent-The-Runway’s willingness to send multiple sizes and garments that are being designed with more flexibility in the fit, customers are still endlessly surprised by factors neither they nor the companies they order from can predict. As someone who has worked with many different factories, I have seen first-hand that garments coming out of one factory can be two sizes larger or smaller than another factory. This is something incredibly difficult to control for.
No matter how accurate a fitting system for eCommerce is or how well produced the pictures and videos are, sometimes customers don’t know what is flattering for their face shape and figure type. When customers say that an item didn’t fit, this could mean many different things. Perhaps companies should be investing in creating clothing that is more flexible in the fit, and the tools for helping customers make decisions about their purchases online should focus more on the rules of which design characteristics flatter different types of faces, and figures.
HOW & WHAT FASHION ITEMS CONSUMERS ARE BUYING IN THE DIGITAL AGE
People generally like to buy luxury clothing items in person. There are so many reasons for this. Many people can’t imagine what the clothing will look like on their own body: having videos of models wearing clothing such as Net-A-Porter gets consumers closer to being able to envision items. Issues of fit and alterations are still a huge obstacle for consumers of fashion, especially online. But the fact that we live in such a digital age has brought about items with an easier fit. I attribute this trend in comfortable easy fit clothing to the ability to sell it online and also customers desire to live in a cerebral manner through their gadgets. Of course we all want to be wearing comfortable clothing while we peruse social media.
As many challenges that occur with selling fashion online people still love to shop for clothing over the internet and are happy to make purchases using this format. It can be very exciting, shopping online, receiving the item in the mail and unwrapping incredible packaging. The other factor to consider is that consumers many times check out stores or individual brands online before making a trip to a brick and mortar shop.
With our selfie obsessed society and makeup tutorials on YouTube, cosmetic companies are selling products that become a part of our "look" or outfit. Cosmetic companies are also selling quite successfully online due to within-reach price points and products that are an easy size for shipping. Makeup is a huge part of social media and an important accessory for fashion as well.
Decades ago, models did their own makeup. There are now teams of makeup artists at fashion shows, behind Instagram shots and for eCommerce content creation. Much of what I’ve learned about social media comes from Jenny Smith and Katya Bychkova. Jenny is the lead makeup stylist for Nars and is featured in many of their tutorial videos. Katya is a fashion and beauty blogger ......her site is www.stylesprinter.com. Also checkout Jenny's and Katya's Instagram accounts @jennyatwoodsmith @stylesprinter.
Net-a-porter, which I believe has one of the strongest eCommerce business models for fashion, has no Periscope account (periscope is a mobile social media app for live-streaming). It’s interesting for me to brainstorm how Periscope or another live-streaming platform would have to change in order for it to be valuable to net-a-porter. And one thing to note is that Facebook live-streaming is probably more appealing to Net-A-Porter at this point in time because they have a fan page. But one could also argue that the Twitter connection to Periscope has to have made them at least consider incorporating Periscope in their social media arsenal.
I believe Net-A-Porter will eventually embrace live-streaming. Live-streaming is the next evolution in social media. I believe how and when they approach this unique type of social media platform will set the stage for many other curators of fashion who want to follow in their footsteps.
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