Last week I spoke at a dinner organised by Attraqt in London. The content and message really seemed to strike a chord with the knowledgeable audience, so I thought I’d commit it to the internet for posterity and so the rest of you can have a read too! – I’d love to know your thoughts….
I spend my time understanding the options available to the eCommerce business, and work out how to cut through the hype to the core of the matter so eCommerce business owners and marketers are able to make the right decisions in their businesses.
That’s what I want to do in this post. Give you a fast track to understanding the eCommerce fashion trends you should be thinking about for future success in your business. Whether you’re running an eCommerce business, working in one, or plan on starting one, my intention is that the following will help you work out which trends you should be capitalising on.
To answer the title I could run through a series of funky widgets, mobile tactics, or virtual fitting room services. Whilst those may be relevant for your business I’m going to cut through the hype and tell you about the 2 things I’d have on my radar if I was you.
- Cross border trade. (aka CBT) – an opportunity for everyone
- The Customer – how to work out your next move
Cross Border Trade in eCommerce
[warning this section is a little UK-centric- sorry rest of the world!]
The retailers of the UK (or Great Britain if you prefer) are the best in the world at eCommerce.
UK consumers spend more per person per year online than any other country in the world. (UK = £1,145, Australia = £1,011, and the USA = £715)
Our customers (the UK population) are the most discerning and skilled eCommerce customers in the world.
That means they have high expectations from their retailers – they’re savvy, they know what they want – so we (us retailers) have to be better than the global average to get their money.
Given that we’re all working with these savvy customers the competition is much more intense as well.
We’re also the best in the world at selling overseas, exporting, cross border trade – whatever you like to call it – we’re better than anyone else at it.
The UK is the only country in the world to have a substantial positive balance of payments in eCommerce. For the non-economists amongst you that means that the UK retailers sell more to overseas customers than the UK customers buy from overseas retailers.
In this country we have the best eCommerce skills, and we’re the only country who’s any good at selling across borders. So every eCommerce business should be considering how they can take advantage of this.
Right now it is a better time than ever to do so. For 2 reasons:
- The UK government likes a positive balance of payments – so eCommerce has caught their eye. And the latest program of support being offered by UKTI (the government) to encourage exporting is HIGHLY focused on our little eCommerce sector! So contact your local UKTI team and find out how they can help you with advice, research, and finance to take your products to the world.
- (and more importantly – because you should never do anything just because there is a grant for it!)
It’s easier now than it has ever been to start selling overseas.
However much research you do, you have to put your products in front of the consumers of your chosen countries to see if your business will work overseas. Once you have a short list of countries – test a selection of your products on a marketplace – Amazon, eBay, or a country specialist like Trade Me in New Zealand (particularly useful for end of season stock in fashion…)
Using marketplaces in this way enables you to get quick, accurate answers because so much of the difficult / complex stuff is done for you so you can concentrate on the product:
- your products are put in front of an audience who is ready to buy
- the marketing is all taken care of
- the local payment methods
And if you use Fulfilled by Amazon you don’t even have to worry about the shipping!
Don’t think marketplaces are for you? Several of the UK’s biggest retailers use this exact strategy to work out which country to launch in next with a bespoke site. So if it’s good enough for them….
What’s stopping you selling more by going overseas? The expertise is at your fingertips, the systems can be really easy, and there’s even government support!
(FYI there are 2 good reasons to avoid selling overseas (i) our UK business is a little wobbly right now, so we’re going to fix it first, then we’ll go CBT, (ii) I can’t keep up with the demand I already have from the UK, so I need to scale up before I take on that cool new CBT opportunity)
Understanding your eCommerce Customer
Right now in the UK only 15% of retail sales are online.
That means that 85% of UK consumers are choosing to shop offline.
Why do consumers prefer to shop offline? I believe it comes down to 3 things that offline retail does one hundred times better than the average eCommerce business:
- Convenience – a consumer can go to the shops, find exactly what they want, and know they’re going home with it at the end of the day. Instant gratification.
- The Experience – people like to shop. It’s a social activity. Just go to a shopping centre or high street (USA – read “mall”) and see how many people are walking around without any shopping bags!
- Trust – when shopping offline the consumer takes on the responsibility of all the most nerve wracking elements. They take on the responsibility of delivering the item to their home, they take on the responsibility of making sure they have the shoes in time for Saturday night, they take on the responsibility of ending up with the right size, they take on the responsibility of the blue item they pick up off the hanger being the blue (not green, or turquoise) item that they take home. Bless them for taking on so much responsibility! It makes satisfying the customer and earning their trust in physical retail a lot easier!
Given that in eCommerce we’re at such a disadvantage in these 3 areas – the trends we should care about are the ones that help us improve the conveniences, the experience, the trust involved in shopping with us online.
This does not mean trying to do what the offline world does so well. This means achieving the same end using the unique attributes of the digital world, bust first working out what will tick those 3 boxes for our customers.
Let me illustrate how 3 of my current favourite eCommerce businesses are doing it…
Solve a niche problem – Bolder Bands
Last month I was in the USA at a conference with BolderBands.
Amy and JD Crouse run a small American eCommerce business selling hairbands.
Amy spotted a problem – she likes to do active things and couldn’t find a hairband that would stay on her head. So she invented one. Word of mouth sales were so strong that her husband joined in and they launched on Shopify last year.
They now have over 460,000 Facebook fans, ship 4,000 to 11,000 orders a month, and won last year’s Shopify Build a Business competition.
How have they done it? They’ve identified who their customer is and what they want – and built a brand and a rapport with them that creates such trust and experience that their business will go from strength to strength.
Staying with the one product idea…
Subscription Fast Fashion – Just Fab
JustFab sells shoes on subscription – £35 per pair, and you get to pick a new pair each month.
This is fast fast fashion, for the millennial market. And they love it. Predicted revenue in 2014 was $400m (US and UK business combined).
They know their customer wants a lot of choice, and they want new new new – so each month they launch a new range of shoes, and the price is always £35 – so it’s really easy for the customer to buy – they can shop without worrying about the price, because it’s all the same.
Plus their stylists pick the right boutique for each customer each month – so the customer sees an edit of the shoes tailored to what they’ve said they like, and influenced by their past purchases.
Again – building a relationship with the customer, building trust, and of course creating that experience.
Save Time, Improve Results – Stitch Fix
My final example brings it all together…and takes it to another level.
[health warning – this is only available in the USA – we are very envious of you ladies of America!]
Stitch Fix was founded by Katrina Lake in 2011 who spotted a customer issue, and solved it by creating a hybrid mix of technology and human skill. Something which just a few years earlier would have been impossible to achieve.
“For the woman on the go, Stitch Fix is the affordable and accessible personal styling service that helps you look and feel your best every day”.
The customer starts by filling in a style quiz and paying a $20 stylist fee.
The algorithm looks at the answers and produces a list of suitable items – for their budget, need, and fit. This is passed onto a real live human stylist who whittles it down to 5 items that make the perfect outfit for the customer. All is selected from the 100s of brand they keep stocked in their own warehouse in San Francisco.
The box of 5 items (together with styling notes) is sent to the customer. Who can then try on in the comfort of their own home, decide what to keep or send back. The $20 fee is netted off against any purchases (so if the customer buys the stylist fee is free), and if the customer keeps all 5 items they save 25% on the order.
This year it’s estimated their turnover will be $200m.
How can you identify trends for your Fashion eCommerce Business?
So am I saying you should all go and build a subscription model? Shift your business to only sell one product? Or hire a few stylists?
No, of course I’m not. I’m saying you need to follow the same 3 steps these businesses have followed (and countless successful others in ecommerce and beyond):
- Identify your customer
- Understand what they’re looking for
- Give it to them
The solution might be a tweak to the product, a change in your delivery strategy, a website improvement or plugin service, mobile apps, or a different approach to social media. It may well be one of the big-hype-trends-of-the-moment – but don’t get excited and distracted by them, first understand what you need to do for your customer then find the best way to give it to them.
What do you see as your key next steps?