January 17, 2019 How is eCommerce Changing The Fashion Industry? Stats & Trends
2018 was a successful year for online retail. Although brick-and-mortar stores still retain the biggest market share, the truth is that they are losing ground, while online stores are gaining it.
Fashion is one of the main fields in terms of innovations and breakthroughs. Let’s take a closer look at this industry to analyze what happened in 2018 and what’s ahead for 2019.
Main 2018 Fashion eCommerce Stats to Keep in Mind
It is said that eCommerce accounted for “only” 12% of total retail sales in 2018. However, this number should not be disregarded. eCommerce market share has been growing during the past few years at a fast rate, and valuations of online retail players are much higher than those of traditional retail companies.
In the online Fashion segment, the percentage of market share has already reached 27%, according to Forrester reports. UK, one of Europe’s most mature online markets, has experienced the biggest year-on-year growth in clothing, textile, and footwear eCommerce sales, at 16.5%. In fact, 266 of the top 1,000 internet retailers are apparel brands.
Even more shockingly, the percentage of consumers who made a purchase online grew in the past year to 58%, half of them in the fashion retail segment.
But if there’s one trend to highlight during the last year is mobile commerce. Accounting for over 65% of the online fashion traffic, it also earned 57% of the total online sales.
Top 2019 Challenges for Online Fashion Retailers
One of the biggest challenges fashion retailers will face in 2019 is how to increase eCommerce conversion rates.
According on Fireclick index findings, conversion rates for fashion and apparel are at a 5.9%. Boosting this rate will involve employing all sorts of strategies, from personalization, AI and SEO optimization to design. This will help reduce abandonment, which in 2018 reached an average rate of 69%.
Product positioning and discovery
Product data will become even more critical, as competition grows stiffer. This is why Product Information Management systems (PIM) will help retailers bring all product data into a single platform to later output it to different channels.
Plus, solutions offering comprehensive product attributes and categorization of products will be key to ensure a good product positioning. Let’s not forget that the average number of organic results that Google displays on the first search engine results page only accounts for 8.59% of the total search results, so winning the SEO game is key.
Brand trust and loyalty
With a stiff competition, you can never be sure customers will return to your website.
Increasing brand trust and retention can be done through loyalty programs, consistency in your brand image, projecting values like transparency and sustainability and a great user experience (both on mobile and desktop).
High return rates
Return rates for online purchases are currently as high as 50%. Most importantly, 80% of first time customers who need to go through a product return experience never shop at that retail website again.
Therefore, retailers should fight this pain by offering exact sizings, highly detailed product specs and top quality images that are true to the real product. This is how customers can get an actual idea of the product and retailers can avoid customer disappointment.
Fashion eCommerce Predictions for 2019 And Beyond
Experts predict great things for fashion eTailers this year. eCommerce market share of total fashion retail sales to keep growing. According to the latest Forrester report, by 2022 it will have reached 36% of total retail sales.
This is driven by the fact that more and more consumers turn to their smartphones for online shopping. In fact, 65% of them use these devices when they feel the need to buy something.
Other reasons why customers increasingly choose online over offline is a greater assortment, better promotions, and higher convenience. As it happens, millennials have already made it their preferred choice, with a 67% of them choosing this channel over physical stores.
Fashion companies will need to keep adapting and disrupting their businesses in order to succeed. As it happens, digital-first eTailers will most likely thrive, especially those investing in new technologies and advocating for social causes. Hence, there will be a need of powering interactions with their customers using voice, visual content and direct messaging. In this context, AI will continue rising as an essential tool.
Main eCommerce Technologies & Trends for This Year
AI goes mainstream
2018 was definitely the year of the AI boom, with thousands of applications and use cases for this technology. Artificial Intelligence will keep consolidating itself throughout 2019. In fact, companies will improve data in order to avoid bias and will involve humans in the AI activities to get better results.
From price intelligence to sales assistants or chatbots, AI will find its way to the retail core. Actually, companies like Amazon, Privalia, Alibaba or Myntra have already implemented the technology in different areas of the value chain.
Higher level of automation
We are heading towards a world where tedious and repetitive tasks will be done by machines. This will be increasingly the case in fashion retail, where some tasks will be automated. For example, the process of manually adding product information to apparel and garments can be automated with solutions like Catchoom’s.
Personalization is key
Product recommendations based on behavioral aspects are shaping the way retailers display their products online.
There are many ways to personalize an experience, for instance, by suggesting products the user has previously visited. Similarly, it is possible to guide the user to products bought by other visitors with a similar profile or display products similar to the one the customer is taking a look at.
Sustainability is the new cool
Consumers are becoming increasingly conscious about the impact their purchases have on the environment. As a matter of fact, one in three shoppers have already started to incorporate such values and principles into the way they shop. This means brands and retailers will need to integrate this culture into their operations and management.
Another key to successfully boosting sales in 2019 will be to better optimize online channels for mobile devices.
With an increasing percentage of shoppers turning to their phones, the need to reduce friction and facilitate smooth purchases from all devices is essential.
Consumers are getting more savvy and they need more and more information to feel convinced to buy a product online. Therefore, the need for comprehensive and consistent product information has arisen.
This is why technology companies have taken a proactive approach and provide tools to automatically tag fashion products, paving the way for retailers to easily meet their expectations.
New search experiences will keep transforming the way consumers find products and buy them. From voice or image search to natural language processing in eCommerce search bars, these experiences will determine how visitors feel about brands and how they will convert.