Displaying items by tag: ECommerce

future of retail automationAs we wave goodbye to another decade, it’s time to assess where we’ve been and what the next 10 years will have in store for the retail sector. It’s hard to think back to 2010 and not somehow feel it is closer than it really is. Nine years’ later and you’d think online had virtually replaced traditional retail, but it is still under 20% of total retail sales. About 7% of total retail sales were online in 2010 rising to 19% by 2019 as a percentage of total retail sales.

At the start of the decade, in June 2010, there were 1.97B internet users, by 2019, that figure had reached 4.54B users, 58.8% of the world’s population. Virtually all adults aged 16 to 44 years in the UK were recent internet users (99%) in 2019, compared with 47% of adults aged 75 years and over.

And this is before the roll out and connectivity of 5G. We’ll probably look back and feel we were living in the dark ages when it came to internet speeds when we finally have uninterrupted data and mobile signal.

Left - Autonomous vehicles will be the future of deliveries

While online sales have grown nearly 3 times as a proportion of retail sales over the decade, it’s interesting to look at the growing monopoly of the internet. In the USA, the top five online retailers own 64.7% of sales, (data via Statista).

While online retail sales growth appears to be slowing nobody knows the final plateauing retail mix in numbers yet. One recent report by the analysts ‘Retail Economics’ for the law firm Womble Bond Dickinson, says online shopping could more than double its share of the retail market by 2028. The internet is expected to account for 53% of retail sales in 10 years’ time as younger people who have grown up with the internet become more than half the UK’s adult population according to the report.

Richard Lim, of Retail Economics, said: “Successful retailers have always had to reinvent themselves to stay relevant. However, the pace of change will inevitably prove too fast for many. It definitely feels like the digital retail revolution is only just getting started.”

Arguably the most important revolution in the coming decade will be automation and automated vehicles. Take the human out of something and it instantly becomes far cheaper and more flexible.

future of retail automationThe automated car is coming, it’s just a matter of when. Elon Musk, CEO of Tesla said that he anticipates completion of fully autonomous technology by the end of 2019 with their self-driving vehicles being so advanced in 2020 that the driver can basically take a nap. He said, “I think we will be ‘feature-complete’ on full self-driving this year, meaning the car will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention this year.”

There will be rigorous testing and legislation for this to happen, which will take time, but once vehicles become fully driverless and trusted we’ll be able to have everything delivered at anytime for very little cost. It will revolutionise delivery and the volumes of deliveries. Things will no longer be a hassle to return and as such, will be easier to buy. You'll never be out when you know exactly when your delivery is to arrive.

Right - Secure and cheap deliveries without the human

Fashion will become a service. We’ve seen the idea start this year with the rental and secondhand markets growing recently, but it will be with automation when the business model will make sense. Fashion companies will sell ideas and consumers will buy or borrow those ideas. At the end of life, these items will be returned and disposed or recycled responsibly. The new affordability automation allows will make it cheaper than buying regular clothes. This is when the idea will reach a tipping point.

Having large fulfilment centres servicing larger numbers of people will also be more efficient and reduce wastage, particularly in food. The idea that every supermarket has to guess what that individual store will sell that day or week and it doesn’t leave that store unless it is sold, reduced or thrown away makes no sense in the 21st century. Retailers and brands will like this reduced wastage and more full price sales. Consumers will get fresher items and greater convenience.

The environment will become increasingly important and efficiencies will be driven by green ideas. I think it’s naive to expect consumers to buy less and retailers don’t want that either, it’s going to be about cycles and closing the loop on goods and services.

future of retail automation

It will be about knowing more with regards to what to make and when, with fewer sales and less wastage. When The H&M Group is estimated to sell three billion articles of clothing per year, made in 40 countries, using 275 factories in Bangladesh alone, the scale and potentials for efficiencies is huge. Consumers being able to order exactly what they want and it will be a boon for retailers as well as the environment.

Left - What will the first automated vehicles look like?

How fashion dictates how we look throughout all this will be anyone’s guess, but luxury brands are getting bigger and more dominant, though never underestimate consumer’s desire for change and the human characteristic of becoming bored and moving on relatively quickly.

Whether we will still be wearing sportswear in 2029 is yet to be seen…but the future will definitely involve less humans.

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Published in Fashion

boring mono luxury websitesWhen was the last time you felt truly inspired by a luxury brand’s website? Regardless of the cute little illustrations or achingly cool ad campaign flipping past, mono-luxury e-tail hasn’t really moved on over the past decade. It’s as though they still feel the brand is enough. 

People don’t dress like this, and just to replicate the physical store online is to create a glorified warehouse or catalogue, which doesn’t take into account the element of personality, pampering and leisure which makes physical shopping a pleasure for many and the reason most people desire these brands in the first place. It’s not seductive.

Left - Celine.com - Have mono-luxury sites moved on in the last decade?

During this same time period, multi-brand luxury retailers such as matchesfashion.com, Far Fetch and Net-A-Porter have grown their turnovers into the hundreds of millions of dollars thanks to their ability to tap into people’s desires for newness and vast amounts of choice. These retailers are basically online fashion department stores just minus the fridges and toasters. People like to skip between brands and cherry pick items across them in the most efficient use of their time. Going onto individual, mono-brand websites, especially if you don’t know what you want, feels like a blinkered process and like you’re not getting a full view of the fashion landscape. It also feels, on the majority of sites, as though there isn’t much on there. It is just isn’t very satisfying.

Last week, Farfetch Chief Executive, Jose Neves, predicted that brands would pull out of multi-brand retailers online and operate as e-concessions on marketplaces instead, much as they have done in bricks-and-mortar department stores. And, last year, Kering announced it would take some of its biggest e-commerce websites in house, by the first half of 2020, putting an end to a seven-year joint venture with Yoox Net-a-Porter (YNAP).

Kering’s online sales made up just 6% - this is against 18% of UK retail as a whole - of its 6.4 billion euro turnover in the first half of 2018, but it did grow by 80 percent in the third quarter, faster than revenue growth in department stores or its own shops. If these brands want to reflect general online retail sales they will need to double or triple the percentage of sales coming from online.

Taking back control of the Alexander McQueen, Bottega Veneta and Balenciaga websites will allow Kering full access to information such as client data.While this is great for the brands and the back-end, tech side, customers will notice little difference unless they have a radical rethink of how they present their brands on the front-end. Consumers are used to scrolling and discount incentives to drive sales which many of these brands, outside of sales season, won’t offer. It can also feel very clinical.

According to a report by Deloitte “Big data may help luxury brands to provide personalized and superior customer service through consumer segmentation, behaviour and sentiment analysis, and predictive analytics. Several luxury brands, such as Louis Vuitton, Burberry, Tommy Hilfiger, Dior and Estée Lauder, have already started to take advantage of these technologies, using AI-powered technologies, such as machine learning and analytics, to offer more personalized and timely customer services. They implemented their own AI-powered chatbots and now can sell products using targeted marketing, personalization, and timely automation.”

boring mono luxury websites saint laurent

In November 2018, Kering created a data science team at group level to improve the service and shopping experience of its clients. Kering intends to get real-time 360-degree view of its customers to deliver rich and personalised experiences and meet their specific needs. LVMH, doesn’t break out separate online sales information, but they did reveal that the group's online sales rose by more than 30 percent in 2018. Ian Rogers, the first ever chief digital officer of the LVMH group, told Wired, last year, that he doesn’t like the word "digital" and he has the very tricky job of matching the luxury online customer journey with the pampered, indulgent experience IRL.

“It’s not the case that luxury shopping becomes self-serve on the internet: if I do buy something I expect a high level of service, even if I’m remote.” he said “You can see it's definitely strategic for us to invest in remote customer support, and it's directly downstream of our Internet strategy. There's this nonsense land of digital transformation where people wave their hands and they talk in impractical terms. Keep drilling until you have something practical that works and then rinse and repeat. Lose these nonsense words like "digital", like "data", like "social media". You have to get rid of this digital umbrella because it's just too broad. When somebody says, "We're really behind on digital", my response is, "You're behind in every aspect of your business?” he said.

Right - Spot the difference - YSL.com

According to Kering’s Chief Client & Digital Officer, Grégory Boutté, “Digital can be many different things at once - a distribution channel; a platform for offering seamless omni-channel services to clients; a driver of brand image and visibility; and a tool for engaging with customers in a personalized way. Digital technology, data science and innovation provide a way of offering our customers the best possible experience – on every touchpoint” he said.

Online and off-line isn’t separate, most brands now offer services such as check availability, reserve in-store, make store appointment, pick-up in-store, return in-store, exchange in-store, and buy online in-store. Kering said it will continue to develop partnerships with third-party e-commerce platforms "when relevant", but we’re seeing the beginnings of a power struggle between brands and retailers. They both need each other.

Now these luxury groups are focusing on their websites they need to rethink the entire thing. Their rigid ‘aesthetics’ and branding doesn’t allow for personality. Mono-brand luxury sites are restricted by the volume of product and while it changes, it doesn’t change often enough to the levels today’s customers have become used to. 

Brands, such as Prada, Saint Laurent and Celine, also sell a lot of black, which doesn’t shoot well and doesn’t make the most inspiring of online images. Add in ‘collab. fatigue’ and these brands really need to develop a new idea for websites if they want to increase sales and move away from multi-brand sites.

Luxury brands have built themselves a boring digital straight-jacket and need to start thinking differently. They could offer FaceTime with sales associates in people’s local stores, or offer a live view way of browsing in-store and matching to items online. It’s going to be about making the virtual real and vice versa. There are many possibilities, but they need to unthink the “brand”.

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Published in Fashion
Thursday, 15 September 2016 16:32

ChicGeek Comment Does Style.com Stand A Chance?

style com thoughts ideas the chic geekSince its inception, e-commerce has been a difficult nut to crack. When it was growing fast and taking market share, from offline, it was easy to justify spending vast sums laying the foundations for something that you will reap the benefit of later on.

Today, the luxury market is contracting, so trying to grow, whether offline or online, is particular hard, at this moment in time, especially when you're not in control of the choice of products.

Luxury fashion was slow to get fully behind e-commerce and only now are the brands giving it the attention and respect it deserves. The reasons for the change being companies like Net-a-porter and matchesfashion.com having pioneered this area and shown the riches to be made and also being able to communicate with a future consumer and grow a direct database.

Publishing house, Condé Nast, has just launched its e-commerce offering in the form of style.com This has been coming for the past couple of years and has been put back and put back and then, it surprised me, two weeks ago, by appearing on my Twitter timeline. A reported £75 million has been spent - The Times - and with over 100 employees - The FT - this is a big commitment. 

There’s always room for something different/good or both, in any form of retail and the idea to combine trusted editorial with shopping is a good one, especially in a tastemaker environment like this. It makes sense.

Unfortunately, the launch site looks nothing different from a luxury site from 10 years ago. The choice is limited and being run on affiliates - which means they earn a commission on each sale - all the items are distributed from various sellers at different costs in different locations. It’s going to be a nightmare for Condé Nast to deal with returns. They want the money, but don’t want to get their hands dirty. Don't we all?!

The biggest surprise is, where is all the editorial? People have tried shoppable magazines before, they don’t work. That’s fine. But, use the budget and teams of Vogue and GQ and give me the best of the season’s images and shoots and if there’s only one shoppable product, then so be it. It’s the magic that people buy into. It’s the world that these magazines live in.

It feels as though the editors aren’t playing ball and have washed their hands of it. It probably doesn't help that style.com is based in Camden and the magazines are over in Hanover Square.

After the delayed launch, the launch now feels rushed. I think they would have been better off keeping style.com as it was - runway reports and party pictures - to keep the traffic up and instead, now, they have to cannibalise digital advertising, which is hard to generate money from at the best of times, in order to push shoppers over to the site from the magazines' individual websites.

It launched with free shipping on orders over £350, very generous! Now, it’s free shipping and returns on all orders. Clearly taking some feedback. (Mr Porter had the same issue when it launched). It has only launched in the UK, atm, and there is nothing on there you can’t get anywhere else. It's interesting too that Condé Nast invested in FarFetch.com, another high-fashion portal, and is, now, technically a competitor. Maybe the two will merge?

I think style.com is too little, too late. They’ll spend the next 18 months finding out that this business model is particularly hard to make money from, while blowing millions and millions of pounds. They'll be lucky is they ever make a profit. This could be the Ocado of fashion! In hindsight, it would have been better to have had a chat with Natalie Massenet about 15 years ago.

Published in The Fashion Archives

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