The apparel and fashion industry is one of the major mainstays in the Australian economy. While retail as a whole and many industries have experienced significant downturns of late, the apparel industry has remained relatively stagnant, with only small drops in sales post-GFC. The Australian clothing, textile and footwear industry is valued at close to $3 billion with the industry generating a continual flow of capital that is increasing every year1. While the European fashion market is not immune to the problems being experienced within the continent, many international franchises are looking to Australia as an opportunity for growth. Recent examples include Spanish fashion giant Zara’s successful local opening, with other major chains such as Swedish retailer H&M confirming expansion plans to the Australian market.
In order to successfully exploit the diverse Australian market, many retailers and fashion brands will need to embrace multi-channel marketing. From Melbourne to Montreal, Sydney to San Francisco, the advent of multi-channel retail has been profound. Because modern retail customers can initiate a transaction by going into a store, phoning a call centre or accessing a website, the retailer’s response to each encounter has had to evolve to fit the channel but remain consistent across the entire brand experience. It is all about making it easy for a consumer to purchase a product in whatever way is most appropriate.
Then along came mobile technology, further accelerating this multi-channel trend. Armed with a smartphone, iPad or even just a mobile, consumers can cross channels with ease. Some browse and buy online and pick up the item at a shop. While in the store, they look up a friends Facebook page or a fashion blog to find out more about what they are looking for. They can search for varying product reviews. According to a Cisco study2, 48 per cent of consumers worldwide use or would like to use a smartphone to shop while in-store or on the go.
The pay-off for apparel retailers in adapting to this environment is not just survival, it is healthy growth. Because while it is more challenging to achieve effective cross-channel marketing, a multichannel shopper is – on average – likely to spend 15 to 30 per cent more than someone who only uses one channel. This is becoming even more important as the proliferation of smartphones dominates Australia. According to the Australian Media and Communication Authority's new Smartphones and Tablet report3, one in two Australian adults now own a smartphone – 8.7 million to be precise.
The good news is that fashion retailers and brand owners start with a set of advantages in e-commerce and m-commerce. Clothing and footwear is the largest category of money spent (62 per cent) in a recent large survey of European online consumers.
So what does this mean for a company’s holistic software systems? A great customer experience via mobile is a positive for consumers, however it is important this also links back to back-end systems. This integration is critical to ensure accurate, up-to-date product choice, availability and pricing information. In addition, it provides visibility over an entire supply chain inventory, which can help reduce total inventory levels, minimise stockout situations and shorten delivery lead times. One of the lessons of the mature European m-commerce is that if an e-commerce application is integrated with inventory applications or ERP, it is much easier to create, maintain and exploit these links with customers.
Commerce has changed greatly in the last 15 years of internet usage. This trend will continue more rapidly over time, and it is essential that fashion retailers stay at the forefront of consumer needs and demands. With the sophistication of many fashion businesses ERP and back-end systems, the extension to mobile will open up previously untapped consumer opportunities.
Robert McKee is director fashion industry strategy at software solutions company, Infor.