Consumers are starting to spend again in the fashion sector but brand loyalty is not top of their agenda. How can retailers make themselves stand out from the crowd and catch the shopper’s eye?
As London Fashion Week approaches next Friday (13 September), brands have upped their sponsorship of this year’s event significantly, according to organiser the British Fashion Council.
And while brands are warming to the idea of spending on fashion, so are consumers, according to the latest analysis of fashion trends by research company GfK. It has surveyed 2,436 UK consumers aged 16 to 65 and finds that shoppers are still in the mindset of cutting back because of the recession, but encouragingly there is a softening of this attitude and fashion is one category where the signs look positive.
“We have had a period of stability economically, we haven’t had any big financial shocks or big [high street] names going bust recently, particularly in the retail sector, and bank rates have stayed the same,” says Helen Roberts, senior director, consumer and retail.
“I think people are starting to get used to living as they currently do and because there haven’t been those big shocks they have become a bit more settled and confident in their household situation as it now is.”
The proportion of consumers who say they will spend less on buying new clothes decreased from 37 per cent in May 2012 to 23 per cent in December 2012, according to the latest figures available, and they also believe that the downturn will have less effect on the money they can spend – in May 2012 63 per cent said it will have an effect while in December 2012 that decreased to 55 per cent. The respondents are also less concerned about debt, with 23 per cent saying they will have more debt at the same time a year later when asked in May, which decreased to 18 per cent in December.
However, the effects of the recession highlights new challenges for the retail sector. The research shows that shoppers are promiscuous in their behaviour, shopping at many different retailers – mixing high street with online, supermarkets with catalogues and department stores with discount retailers.
For example, of the 32 per cent who shop at discount retailers, 39 per cent also shop in department stores and of the 13 per cent who shop from catalogues 48 per cent also shop in supermarkets.
Jon Owen, retail director at Very.co.uk, says: “Retail is an extremely competitive market and, in order to grow loyalty, players must develop a distinct proposition and couple it with great customer service.”
Distinctiveness is also another challenge for brands, as the study reveals that brand awareness is almost universal for many fashion labels, among both men and women. Retailers therefore need to stand out in order to convert that awareness to brand consideration.
The data shows that over half of the respondents know about mail order company La Redoute, for example, but only 9 per cent have looked at its website or catalogues. This contrasts with Asos, which scores a lower level of awareness at 45 per cent but 23 per cent have visited its website.
Next and Primark both have high awareness and purchase levels with 88 per cent awareness for Next and 20 per cent have shopped there in the last 12 months and Primark at 89 per cent awareness and 35 per cent purchasing from the retailer in the same period.
Retailers also show differing strengths in the study with a divide in fashion and ranges, and value and affordability. Primark, H&M and Zara perform well in terms of value and affordability. Zara, Asos and Next perform well in having latest fashion and selection of clothes, but Abercrombie & Fitch is not recognised for offering affordable or value-for-money clothes.
Fiona Lambert, brand director for George at Asda says its fashion range is very targeted. “It’s about listening to customers, having a unique selling point and then consistently delivering. At George, we concentrate on what mums want and what they want to buy for their families, also delivering newness and fashion. The reality is people aren’t spending their money to replace what they have already got, they are looking for newness.”
One of the opportunities listed in the research for stand out is customer service and convenience, which is also a threat for retailers. Only around half of shoppers rate any of the brands as good for customer service, therefore improving this is key, especially given the variety of alternative retailers for shoppers to go to if they are unhappy with the customer service of a particular retailer.
However, the idea of convenience in retail has changed over the years. Roberts at GfK believes that it has always been important but now shoppers are more demanding as there more ways to make shopping convenient.
Roberts says: “Convenience used to mean opening on a Sunday, opening later or having things delivered to your home. Now convenience means that people want to shop whenever, wherever they are, be that in store, on a phone while in-store or on a tablet on the train. We’ve had our minds opened to ways that suit us.”
For example, Next has introduced a service where people can order at 9pm for delivery the next day – and if you live within the M25 there are a range of brands that will deliver to consumers the same day. “Once your mind has been opened to that as a possibility, people start to expect that as the norm. If it is not offered, it’s deemed to be inconvenient,” adds Roberts. “The balance is to not offer too many different solutions and scenarios because you blind the customer with choice.”
Next day delivery is quite important for 25 per cent of the respondents and very important for 12 per cent. Being able to choose a nominated delivery day is quite important for 37 per cent and very important for 14 per cent of consumers.
Convenience in terms of free delivery and return options seem to be of greater importance for shoppers. Almost 60 per cent of those surveyed say that free standard delivery is very important, 63 per cent want free returns when shopping online, and 45 per cent say it is very important that they can return items to a store
Owen at Very.co.uk believes that customer service is crucial, particularly for remote retailers. “When it goes wrong, it can create a really bad experience and an extremely poor impression for the customer. But when it goes particularly well, there is a massive upside to be had in terms of creating a highly positive perception and true brand advocacy.”
One way that brands can discover whether these services are being picked up in a positive or negative way by consumers is looking at social media conversations.
According to the research, fashion is talked about more than any other category with 20 per cent of consumers on Facebook discussing and sharing content around fashion brands. Also, 41 per cent say they would go with a recommendation from a friend when considering which brand to buy from.
Since the study shows that brand awareness is universal among the respondents, converting to purchase could be helped by creating and listening to conversations around brands and retail.
Very.co.uk joined forces with make–up artists Pixiwoo, beauty expert Tanya Burr and fashion blogger Zoella, who between them have more than 3 million YouTube subscribers, to develop a 12-week series of summer style videos showcasing its own– label fashion collections.
Owen says: “It’s extremely important for fashion brands to be talked about. But more important than that is brand differentiation. It’s one thing to create an environment for conversation to take place, but it’s no longer enough to expect shoppers to seek you out or simply to engage with one another about your brand. Developing a personality that customers want to engage with is crucial, as are having a point of view on fashion and creating interesting and unique content.”
We’re starting to see early signs of customer confidence returning in certain product categories and womenswear in particular is experiencing notable increases in sales growth.
Retail is an extremely competitive market and, in order to grow loyalty, players must develop a distinct proposition and couple it with great customer service. At Very.co.uk, we’ve focused on both of those factors since we launched in 2009, developing our ranges and collaborating with fantastic fashion and celebrity designers.
We’re emerging from a highly promotional trading period in which many retailers have been clearing stock. That’s created market conditions that are among the most competitive we’ve seen in years, which affects brands and retailers at all points of the value spectrum.
Fashion brands and retailers are involved in a race to make it quick and easy for customers to find the ranges that are most appropriate for them. For the winners, the prize will be increased sales and customer loyalty, so the pressure is on.
George at Asda
We work hard to listen to our customers and we know they shop around, people are researching and budgeting more carefully and choosing where they want to spend their money.
We’re a brand that has been going for 22 years but I think we’ve constantly listened to our customers, we respond to what they tell us and then we are consistent about it, that is key to delivering loyalty. For example, with school wear we listened to the key three things that customers wanted: durability, availability and styling details, and built that into the range. It’s very important to us in how we build loyalty.
Customer service is one of the key reasons people will shop with a retailer and good service has to be multichannel by also making the shopping experience great online and responding to any queries or reviews from customers. People can give us feedback on George.com through reviews and using the online forum.