Certilogo fashion observatory: the shift to eCommerce is here to stay.
The pandemic is reshaping the fashion industry and the way consumers view their luxury purchases. But now that countries are slowly getting back to normal, all players in this field are wondering what this new normal is going to look like for fashion businesses.
In a recent article, Boston Consulting Group (BCG) reported that “…14% of consumers in the US and 17% in China bought fashion online for the first time because of the pandemic…” BCG analysts forecast that channel shifts will accelerate and with more people shopping online, the role of retail stores will change.
Successful fashion companies will be able to find a new balance between the role of their offline and online channels and their ability to deliver a full omnichannel experience in this new world.
Data collected by Certilogo’s authentication platform help the Fashion and Luxury industry understand the channel dynamics at work and identify upcoming trends.
The shift to ecommerce is here to stay even after offline stores reopen
A comparison of data collected by Certilogo over different periods, i.e. before, during and after lockdown, clearly shows that the share of sales by channel has definitively changed from 2019 to 2020 due to the pandemic. June 2020 data suggest that the growth we’ve seen in the distribution of sales in online channels is here to stay, even after lockdown:
- Authentications of products purchased on ecommerce channels – a category that groups both brand sites and all other ecommerce players - were 62% of total authentications in Apr 2019, but they grew to a record high of 83% during the COVID 19 peak in April 2020 and stayed at an impressive 79% of the total in June 2020, after physical points of sale reopened.
Brand sites are experiencing the highest growth
In the second quarter of 2020, authentications on products purchased from the brands’ e-commerce channels experienced the highest % growth compared to the same period in 2019. In June 2020, branded online stores were the only retail channel to show a positive growth compared to the same period of last year (+55%), while authentications generated by sales performed in directly operated offline stores were down almost 40% down compared to last year.
The restrictions currently in force in some countries, the absence of tourist and travel retail traffic and the safety measures negatively impacting the shopping experience in physical stores are still strong barriers to the recovery of offline sales; on the other hand, the complete recovery of logistic and delivery processes means that brand e-commerce sites are able to develop their potential.
What happens next?
BCG analysts suggest that “…with more people shopping online, the role of retail stores will change. Many directly operated offline stores will remain for brand image purposes, but the majority of physical locations are likely to be smaller, sell merchandise that’s customized for the area, and be set up to fulfill online orders. Some will also serve as hubs for community activities. To grab customers’ attention, brands will need to strengthen their online presence through customization, community-building, and superior online-shopping interfaces and deliveries.”
We expect this new environment to cause significant changes in the way store staff is trained. New skills will be needed; store managers will be asked to deliver a new sales ceremony and leverage the value of a more advanced set of information and tracking data both in relation to the product and to the consumer making the purchase.
At the same time, because the interaction with in-store sellers will be missing, the product will become more central to the purchasing experience. When it reaches the home of ecommerce buyers, the fashion product should be able to tell the brand story and reinforce the brand's allure. The unboxing ceremony will become a critical moment of truth to communicate with newly acquired and returning customers and provide a great opportunity for the brand to deliver ancillary digital services.
In the "Rising Value of Real" survey conducted by Certilogo in 2019, 1.500 fashion consumers interviewed in 5 top countries stated that they would value the possibility to interact with their connected products to access additional services such as “Certificates of Authenticity” (52% of the cases), “Registration of ownership” (39%), info on the ”Product’s raw materials” (41%), “Sustainability information” (32%), “Brand history & current activities” (36%) and Exclusive extra content (33%).
Our recommendations
- Use connected products to support your in-store personnel as they handle multichannel consumers: allow them to access traceability and product authentication data. Authentication becomes crucial when managing returns, both for online and off-line purchases.
- Engage new and existing customers during the unboxing ceremony offering them an amazing authentication experience and allowing them to access exclusive content to feel connected with the brand they love.
- Provide new services, information and promotions to your consumers, no matter where they buy: your product is your most enduring touchpoint and the most impactful vehicle for the brand experience, so consider using connected products as a meaningful touchpoint in your digital journey to increase engagement and loyalty.
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