Future of Fashion: the Retail Industry of Tomorrow
Fashion, by definition, is always changing. It’s an industry that needs to keep moving to survive. Collections come and go with the seasons, bringing with them a fresh wave of trends that may lose their allure by the coming year. But in recent years, more than ever, the industry has stepped up a gear.
There has been a seismic shift in the industry recently, brought on, among other things, by technological advancements and increasing pressure from consumers for improved transparency and higher social and ecological standards.
In this long-form series, FashionUnited will be taking a closer look at the different sections of the fashion industry – from sourcing to designing, manufacturing to retail – observing the way
the sector as a whole is evolving and, more importantly, where it is headed. This is the first chapter of a series.
Digital fashion collections, experiential retail, 3D printed garments, trend-predicting AI, robots, and an ever-growing awareness towards social and environmental issues. The fashion industry is changing fast. Turn away and you might miss it.
The UK retail industry is facing a prolonged period of difficulty. It seems we can’t go a week these days without hearing about another British brand falling into administration or another broken record for lowest footfall on the country’s ailing high streets. The UK lost 70,000 retail jobs in the final months of 2018 according to the British Retail Consortium, while research compiled by the Local Data Company (LDC) revealed that the high street suffered an historic loss of 2,481 stores in 2018, up from 1,772 in 2017.
So why are times so tough? While a raft of complex social and economical issues can be attributed to the UK’s poor retail environment, a few key issues seem to be at the heart of the problem:
The dreaded “B” Word. Brexit has been a talking point for the UK since the referendum results were announced way back in June 2016. Regardless of people’s opinions surrounding the choice to leave or not, its undeniable that the implications of the UK’s decision to leave the EU have already materialised.
For an in-depth insight of the potential complications a no-deal Brexit would mean for fashion companies and retails, take a look at this article published in March.
But it’s not all doom and gloom. While it may not look good, it would be wrong to say the high street is dying. The retail landscape, like every industry, is evolving. In this article, FashionUnited takes a look at some of the ways the fashion retail is changing, and we look ahead – with the help of industry professionals – at how it might look in ten years from now.
Experiential Retail: Brick-and-mortar 2.0
In recent years, retailers have taken a different approach to the way they use their physical space. Retailers are now focusing on the customer experience rather than simply looking at stores as a room full of ever-changing items of clothing. Concept stores, pop-up boutiques and showrooms are on the rise – and for good reason. As much as 85 percent of UK consumers still prefer to shop in-store, a March survey by Marketing Signals found. The same survey found that a considerable 94 percent said they research a product online before making a decision.
The struggling environment has seen the emergence of a different space – one that focuses on customer experience. According to Euromonitor, “seeing or trying a product before buying” is already the main motivation for shopping in store for 47 percent of today’s connected consumers around the world.
“Despite the belief that younger consumers are only interested in purchasing online, B&M still play a crucial role in Gen-Z shopping habits. Brands need to be innovative to remain relevant in the future and explore creating a space that connects both the digital and physical world. Gen-Z cohorts will then want to be there, immerse themselves in the experience and share it with their peers on social platforms,” Kayla Marci, Edited market analyst, told FashionUnited.
Marci continued: “Pop-up installations are continuing to trend well with younger consumers – this was evident at Coachella where every year, more brands are competing in this space. Revolve is an example of a brand that optimizes a pop-up model at the festival. This year, they translated product worn by influencers at their Coachella installations into shoppable social and email content. This leads to the evolution of social media as a retail platform.”
Head of trends at Insider Trends, Cate Trotter, agrees that physical space remains an important way for brands to create a more intimate and personal relationship with shoppers. “Experience is certainly important but not necessarily in the flashy, event-driven way that many are playing with at present,” she said. “The best experiences can be simple, but personal and value-driven. The main selling point of e-commerce is convenience. A store that can offer the same is of more value to shoppers than an Instagrammable display.”
M-commerce and the growth of online shopping
One of the biggest contributors to retail’s seismic change in recent years is undoubtedly the growth of online shopping. Never before has shopping been so convenient.
A 2018 study by Ofcom found that the average Briton spends 24 hours a week online (more than twice the time they did in 2011), and checks their phone every 12 minutes. Online sales are growing at a rate of 16 percent annually in the UK and are predicted to overtake desktop sales globally by 2023, according to the latest Global Payment Trends report by Wordplay.
Social shopping is a key example of the importance of mobile shopping today. Social media has becomea considerable part of our lives, and companies know it; it seems like every week a social platform is announcing a new feature to better engage with its audience and their shopping habits. In March, for example, Instagram introduced a feature allowing its users to buy garments directly from its app, without having to redirect customers to the specific brand’s site before purchasing.
Similarly, Zara recently tapped into the power of social influencers with their collaborative Instagram, @livingzara. A new influencer takes over the account every week to create content featuring Zara items available to shop from Instagram.
Marci believes this trend will only grow: “As the influencer economy continues to grow and Instagram makes further enhancements, we can expect to see more brands adopting these practices and purchases via social media further integrate into consumer shopping habits.”
Seamless, frictionless, omnichannel
Seamlessness, or frictionless, is the increasing tendency for a shopping experience, whether online or offline, to be as smooth and efficient as possible, and it is something that is becoming increasingly valued – and expected – by the see-now-buy-now shopper.
“The store of the future may not be a store at all. By that I mean that retail has fundamentally changed. It is not constrained by four walls, but can now be anywhere that we are. This is not just because of the smartphones in our pockets connecting us to websites, but other intuitive ways as well,” said Cate Trotter, head of trends at Insider Trends.
“Why should a billboard advert just be an advert now and not something we can instantly shop? Why can’t we open up an app and have a store pop-up in the local park? The very best brands are adopting an ecosystem approach. The store is one of many channels for connecting with customers, which all interconnect and feed into the greater ideas of ‘retail’. These ecosystems are increasingly digitally-led and there is no getting away from that. That said there is still definitely a place for brick-and-mortar, but not necessarily just as places we go to buy.”
Daan Lucas, founder of Amsterdam-based design studio, Random Studio, believes that the future of retail is about engaging the people who come to a store with a meaningful experience. Random Studios has worked with the likes of Nike, Raf Simons, Tommy Hilfiger and Ted Baker on creating innovative shopping experiences that focus on an omni channel approach. “It’s fine simply having screens in a store, but they need to engage the shopper,” Lucas said. For him, the future of retail will see technology blending seamlessly with the infrastructure of the store itself. An example of this technology already being tested is by South Korean fashion brand Beanpole and its collaboration with Samsung. When shoppers at Beanpole’s stores pick up certain items hanging on interactive hangers, the monitors above them immediately pull up the item’s details on a screen.
In this case, the screen becomes an extension of the physical space, adding practical functionality which seamlessly boosts the shopping experience.
Another application of this can be seen with the innovations of visual AI startup Syte. The company recently partnered with Marks and Spencer to create a new feature which allows shoppers to upload an existing photo or take a new one of any outfit to explore a range of similar-looking products on the Marks and Spencer website. The ‘Style Finder’ tool uses AI technology to find results with the closest match, which customers can then narrow down with additional filters such as size, price and colour.
“As retail becomes increasingly democratized, brands and retailers will need to continue to focus on the unique value they can provide to their consumers. Most of this value, we believe, will come in the form of omnichannel AI technology,” said Lihi Pinto Fryman, CMO and co-founder of Syte. “For e-commerce, this means improved customer experience with innovations like visual search, virtual try-on, smart assistants for informed size recommendations, and a full online experience that is tailored for the user. For in-store, fulfilling the actual purchase should be the last focus.”
According to Fryman, the implementation of commerce in social media applications and natively within mobile devices will be ubiquitous within fashion retail. “Most of our clients come to us because they are looking for a way to engage their shoppers, improve customer experience and enhance omnichannel efficiency and connectivity. These will be the metrics of success for retailers moving forward for the next 10 years,” he said.
Seamless retail also means a frictionless experience before the customer enters the store and after they leave. AI startup Edited uses driven data technology to inform retailers of upcoming trends and monitor their stock to ensure retailers have the right amount of a product at the right time. “Invest in data-driven technology is probably the less risky thing to do because it makes things more efficient,” Grace Hill, director of retail strategy at analytics firm Edited told FashionUnited at this year’s Pure London trade show. “So many decisions in retail at the moment are based on gut instinct and can lead to overbuying or underbuying. Embracing data and making informed, smart decisions is the way forward.”
Similarly, deliveries and returns will become more efficient and frictionless in the future. A recent study by Klarna found that 86 percent of shoppers would become more loyal to a brand and more likely to visit it if it offered free returns.
High tech becomes the norm
AI, AR, VR, digital signage, smart tags, edge computing, and robots in stores. Here’s a look at the technology which could be coming to a store near you (if it already isn’t).
Artificial intelligence (AI) and machine learning (ML)
AI is on the rise in retail. According to a recent study from the Capgemini Research Institute, over a quarter (28 percent) of retailers today, a significant jump from 17 percent in 2017, and 4 percent in 2016. But not all those using the technology are making the most of it. The same study found that while the technology could be a 300 billion dollar+ opportunity if retailers are able to scale and expand the scope of their existing deployments, only one percent of retailers using it are doing so. The majority of them, instead, are focusing the technology only on sales and marketing.
Augmented Reality (AR)
Digital signage is becoming increasingly common in retail stores. For example, South Korean fashion brand Beanpole has collaborated with Samsung to use this technology. When shoppers at beanpole’s stores pick up certain items hanging on interactive hangers, the monitors above them immediately pull up the item’s details on screen.
“In ten years time there will be robots in our stores, what they do there exactly, how they are used, I do not know yet, but they will be there, I’m sure.” That’s what Tommy Hilfiger CEO Daniel Grieder, CEO of Tommy Hilfiger, said in November at internet technology congress Web Summit. That concept is already being trialled. In 2017, shopping centre group Intu introduced the world to Bo, Europe’s first ever ‘shop-bot’ robot made to interact with shoppers at the group’s Milton Keynes shopping centre. Bo can direct shoppers to specific parts of the store and inform them about special offers. Future retail roles for robots likely include stock and transaction management and customer services.
The landscape of retail is continually evolving. Customers today are no longer satisfied with a store simply displaying merchandise; they want to be inspired and entertained. Brands and retailers must adapt to these changing expectations, and make use of the new opportunities to connect and build relationships with the modern shopper.
Homepage image: Amazon pop-up by FashionUnited
All other imagery: Heidi Law for FashionUnited
Source : fashionunited.uk