Very significant changes are shifting the way apparel companies are keeping pace with digital competitors, while their customers’ behaviors and expectations are evolving ever faster, according to a new Apparel Omni-channel Survey report from McKinsey. The study unveils a number of important insights.
For example, six out of ten people now use at least one digital channel when shopping for an apparel garment, which has major implications for physical stores. However, for most apparel companies, brick-and-mortar stores are still essential because more of the best customers are using a combination of offline and online channels when they shop.
In exploring customer-experience and merchandising factors that drive customers’ behaviour, online leaders in consumer-facing industries, from books and music to insurance, find that customisation and personalisation are key sales drivers.
The businesses use countless data sources and artificial intelligence to customize offerings to millions of people every day, says the survey. Cosmetic department store Sephora—a best-in-class example—takes cross-channel personalisation to the next level with features like location-targeted text messages to notify customers that a nearby store has a new, limited-edition product in stock.
McKinsey's analysis reveals that personalization, such as “tailored for me” product suggestions and advice, is a key driver of trips for both monobrand and multibrand retailers across online and offline channels.
Furthermore, customers indicate that personalization gives an opportunity to differentiate from competitors and delight them.
To personalize effectively, however, brands and retailers first must know who their customer is—to link and identify the one in three shoppers who researched online before coming into the store or researched in the store before visiting the website.
Apparel companies can outcompete online-only giants at specific moments in the consumer shopping journey. According to their research, one in four apparel shoppers visits Amazon early in the apparel shopping journey. However two-thirds of those visitors buy elsewhere, meaning Amazon is critical in the search, inspiration, and discovery phases of the journey (an insight supported by its growing role as a marketing and media platform) but is less effective for evaluation and the purchase transaction itself. This creates an opportunity for apparel companies to differentiate and win the actual sale.
Photos show general retail scenes in London - © Lucia Carpio 2019
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