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Closing the Gap on Consumers

Closing the Gap on Consumers
Closing the Gap on Consumers
Closing the Gap on Consumers
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Published date
22 October 2018

Part of a series of guest posts from the Centre for Fashion Enterprise (CFE) – words by Bethany Greer, Fashion Tech Project assistant at CFE

Step 1: Don’t make it all about the sale

Brands need to prioritise personalisation in an age where new digitally-native brands are popping up every day and the competition for wallet share is fierce. This means that they first have to know exactly who their audience is – down to where they eat on date night and what they’re watching on Netflix. It may sound extreme, but is essential considering that the number of fashion labels emerging has grown exponentially, while the capacity for which consumers have to remember (let alone shop) these new brands has not. Emerging businesses must now take a holistic approach to find and engage their target audiences, with the goal of establishing long-term authentic relationships. According to Rahul Kulkarni, Product manager for Shopify’s point of sale team, this means getting to know your customer in person.

Kulkarni, whose Shopfiy team worked on the retail strategy for pop ups with brands such as Kylie Cosmetics and Beast Mode, recommends that brands invest in offline strategies in order to drive traffic online. He notes that in-person engagement can be the most effective way to gather customer insights, “The thing I would recommend is after [gathering] that customer information, when you’ve met your customer in-person, don’t make it all about the sale,” he goes on to point out that, “there’s actually a really unique opportunity that you have to take all this customer information to understand what their challenges are, what their needs are and hopefully you can track them from your emails or content back to your online to really engage your audience. The goal there is to drive traffic to your online store, but the real reason of that physical event or that IRL is to engage your audience.

Converting browsers into buyers

Many fashion labels who start out online find it difficult to covert browsers into buyers, especially in the case of luxury fashion when there is a high price tag attached to each item. Establishing trust between brand and customer is one of the most challenging yet essential tactics to ensure ongoing client loyalty.

Direct-to-consumer giants like Everlane and Glossier, who have managed to scale brand transparency, are prioritising physical retail not only to increase brand awareness, but to inform their product development. Rahul notes, “I think one of the benefits that brands at Shopify – who are in the fashion industry trying to develop their products – there’s a tremendous value to actually engage with customers and understand their needs and feed that to the product. I think that’s the number one reason why companies are trying to engage offline, is to try to engage individually- understand their needs and understand where they’re coming from.

Brands must make shoppers feel a part of their brand narrative rather than aspire to it

Building a brand community, where customers become self-identified brand ambassadors, is also essential for staying power. Companies who have been successful in creating long-lasting consumer communities take the conversation away from selling entirely. New-kid-on-the-block label Outdoor Voices (OV), for example, is one such brand that has been attracting women from all over the U.S. with their active wear created for everyday recreation rather than competition. For OV, it’s not about exercising to be the best, it’s about being happy and healthy. Since launching direct-to-consumer in 2014, they have put this mantra into action through inclusive nation-wide climbing clubs and jogging groups- nothing fancy but an initiative that is clearly working; in just under five years, they’ve raised $54.4 million in venture funding and are set to take on the likes of Lululemon and Under Armour, all without losing authenticity.

OV exemplifies Rahul’s notion that it is becoming increasingly important for brands to be involved with their customer outside of the store in order to anticipate what they will want before they even step foot inside.

Creating seamless online/offline experiences

For businesses who have limited budget and resources to invest in in-depth digital analytics, offline experiences can also provide an easy way to track Return on Investment (ROI). Kulkarni notes that Shopify has seen brands find great success to transition their online/offline presence through the use of promo codes, “What’s really unique is you can actually have an ad campaign, let’s say an Instagram campaign, include one of these promo codes, advertise that shoppers are eligible to bring this promo code in-store, and every time you see someone in-person it engages your brand offline. You can actually now tie your paid advertising spend to how many sales, through that discount code to answer the question, ‘okay this is how much I’ve spent on paid advertising, how much did I actually make?’”

Designers should consider, “for the online store, you want to know what the lifetime value (LTV) of a customer is and you want to make sure that it’s higher than the cost of customer acquisition. We [at Shopify] believe that there are tools like promotion codes or discount codes that are applicable online and in-person, you can start answering that LTV and customer acquisition question.”

Another way to enhance digital experience and foster brand loyalty, if executed properly, is live-chat. Kulkarni says, “I think live-chat is a really good opportunity, again, to provide a more authentic experience. If you are trying to get people to be representative of your brand, you can help answer questions and facilitate the sale online. You know, the most unique thing about a brand using live-chat is again, not focusing on and sales so much as to offer real value, right?.. it’s a great way to raise engagement and authenticity through your online store.

The Future of Retail

Many fashion retailers and brands are starting to experiment with experience-led shops, navigating how to best reach their customer. Some aren’t even selling their product in store and instead are focused entirely on building brand awareness. Rahul comments, “I think that really benefits shoppers and benefits brands, you’re going to see the retail having a much more authentic feel to it and it’ll be driven largely by the fact that people are buying everywhere and the goal of the brand is just be where your customers are where they want to purchase.”

From his vantage point at Shopify, he believes that “You’re going to see a lot of digital metrics that people are using in their e-commerce store and apply them to in-person. So, ‘what’s my traffic, what’s my IRL impression and of course, how do I attribute the traffic with wherever they purchased?’ Whether in the end they purchased through e-commerce, Instagram, or Facebook, I think you’re going to see brands say, ‘I really just want to create a really compelling reason for people to come into my store.’”

For creatives and designers who are perhaps intimidated by the technology and logistics of running a successful business, Rahul says that Shopify is “…trying to equip brands with tools and technologies so they can focus on running their business and creating great product. We’re trying to make purchase online and return in-store incredibly simple for brands to operationalise.” They’re looking to simplify “…that area of technology so that brands can really own that experience; build a community, build a product that people love and how curate a real authentic brand experience without technology getting in the way.

Rahul was interviewed for a Facebook Live hosted by Centre for Fashion Enterprise in collaboration with FashionTech Toronto.