Changes To The e-Commerce Fashion Space
The fashion sector has always been fluid. Whether you look back centuries, decades or even just a few years, journalists and historians will be able to accurately date paintings or photographs simply based on what clothes the people are wearing. In the 20s we have the luxury (more so than ever before) of having an international wardrobe at our fingertips. You can literally search the internet for any style, theme, or item and there is bound to be an online business that can deliver it to your door!
Moving on from this growing access to unique fashion anywhere, anytime, there are reports that the eCommerce fashion space will grow to at least $1 TRILLION by the year 2025... that's just 3 years away. So, 2022 is a pivotal point in that upward journey. In 2021 the market was already valued at $759.5 billion, apparel, footwear and accessories have become the largest eCommerce sector in the world.
As we mentioned in our blog "Changes To eCommerce In 2022" the market is now in the hands of the consumer. There's not a panic-driven need to buy 'essentials' online any more, and so the potential customer is looking for a business that can provide them a bespoke, independent feel at a fraction of the high-street cost. The way that brands are positioned in front of consumers is going to be one of the main focusses of the new year.
As creatives get more complex, and algorithms more intricate, tailored adverts and sponsored search results are going to be the key to keep people buying. Let's be honest here, if you see a generic advert for an Amazon Basics brand, but below it you see an 'independent business' unique brand with friendly fonts and styles, the latter is more likely to catch your interest in an over-saturated marketplace. Getting a potential consumer to click on an ad is only the first step.
If they have questions about the product, you can be sure in 2022 there won't be a team of call centre agents waiting by their computers for a chat window to pop up. A study carried out by IMRG & Hive predicts that around 75% of online fashion brands will invest in an AI over the next two years. By the end of '22 Gartner has even predicted that 85% of consumer retail transactions will be completed without interacting with a human at all!
There will always be a place in the physical high street market for people looking for a special outfit, or someone that needs to urgently buy an item of clothing. However, it seems that this area of the fashion sector is shrinking. If you think about it, a customer-facing shop needs to pay overheads such as rent, business rates and maintain the premises so that it is appealing to their users. A drop-shipping company or warehouse DTC can invest that money elsewhere. Of course, they still need to pay for their premises, but they don't need to have a city centre prime location or make it customer-friendly. This change is reflected in the geography of the fashion sector in 2022.
In reports from 2020 (bear in mind the pandemic was at its height), the eCommerce fashion space was heavily biased towards China. The sales of apparel in China outweighed the USA, UK, Germany and Japan combined. Having the available urban areas for vast warehouses, and a seemingly unlimited amount of industry work force, China can produce garments, footwear and accessories at an incredible rate. This drives the prices down for their goods, and tempts customers to click on 'off shore' company ads. A combination of appearing to be a bespoke small business through clever advertising, and hiding country of origin, consumers may not realise they are buying from China until they receive the delivery timescale estimate or check their order confirmation email.
Based on the latest data it appears that the trending areas of the fashion sector are; accessories, luxury goods and footwear. Luxury goods have been growing at over 10% per year for the last two years, so they are definitely something to keep your eye on in the coming months. Revenue from luxury brands is predicted to hit $75bn or more in the global market this year.
More than ever up-selling and cross-selling are coming into play. As well as having a multitude of sales channels through social media, the drive to keep consumers loyal comes from creating a 'need' for your products. This will increasingly be carried out through suggested 'added value' items and creating styles from many departments of the same online brand. For example, in the past you could display a range of jeans on a carousel ad, and maybe have one photo of a model wearing an outfit. In 2022 you'll be looking at a carousel which focuses on a fully styled outfit, and displays each item with its benefits, along with accessories, jewellery and perfume. Brand collabs and sponsored limited edition apparel will entice the customer to shop in one place. With carefully times follow-up marketing emails that company could potentially become a person's 'one-stop-shop' for their entire wardrobe.
Expressing such a vast and noisy market, the fashion sector really is the new 'Wild West' of the digital age. People need clothes regularly, you can't leave the house without wearing even the most basic of outfits. So, whether it's underwear and off-brand sneakers, or it's luxury goods and accessories, there's all to play for in 2022.