FASHION RETAIL AND 2023 TRENDS. FROM SOCIAL MEDIA TO ADVANCED CUSTOMER CARE SERVICES.
We identified the main trends in the eCommerce sector and in particular in Retail Fashion for 2023: social media as direct sales platforms, highly personalised and engaging shopping experiences, new hybrid business models, more payment options with digital wallets and Buy Now Pay Later, advanced customer care services, Re-Commerce, BOPIS(Buy Online, Pick up in Store), more sustainability and less greenwashing.
The recent McKinsey report Errore. Riferimento a collegamento ipertestuale non valido. devotes an important chapter to hyper-connected and creative digital environments where users work, play, socialise and shop without interruption. Interactive spaces are becoming a natural evolution of people’s daily lives, as they spend more and more time online: while in 2020 an average presence of up to 8 hours a day was estimated for members of Gen Z, today 55% of Gen Z use smartphones for more than 5 hours a day and 26% use their phones for more than 10 hours a day. Sales models and paradigms must therefore be adapted to the needs and requirements of consumers belonging to the new generations, not least because of their particular familiarity with the digital sphere and their focus on personal expression and creativity: fashion is one of the top three categories in which the very young are willing to spend more on an extra purchase as a treat.
A highly customised shopping experience: Social commerce
One of the main trends is certainly the creation of ahighly personalised and frictionless experience: the effort for brands is not to interrupt the online experience, be it social platforms, gaming, entertainment, events, and to already concentrate the moment of choosing and purchasing the products within the social platform. Global sales through social media platforms reached USD 992 billion in 2022 and forecasts suggest that social commerce will reach approximately USD 2.9 trillion by 2026.
Platforms such as TiKTok and Instagram are already overtaking Google as the preferred space to search for Errore. Riferimento a collegamento ipertestuale non valido.and to decide what and how to make purchases. 40% of Gen Z users prefer TikTok and Instagram to the Google search engine. The relationship between consumers and brands, however, is becoming less and less one-way: for some time now, user-generated content (UGC) featuring a brand is proving to be more powerful than the brand’s own marketing content. It is estimated that on TikTok, UGC videos are 22% more effective than advertising content. While 41% of consumers look for promotional content on brand sales and discounts on social media, as many as 97% of Gen Zuse social media as their main source of inspiration for shopping
Personalising the customer experience
In addition to being an important resource for customer care, through the training of chatbots and models for 24-hour customer support and assistance, artificial intelligence will be of great support in customising the shopping experience.
According to various industry studies, revenues for customisation-focused retailers will increase significantly, by, up to 40% more.
For 75% of decision-makers, customising the customer experience is no longer just an option, but the element at stake. Consumer surveys confirm this: 60% say that a personalised shopping experience is reason enough to become a repeat customer and 76% say they are more likely to buy from brands that can strongly personalise the experience.
For the Wakefield Research study commissioned by ElasticSearch this number is even higher:88% of consumers – not only Gen Z but also Millennials – prefer to buy online from brands that provide a customisedcustomer experience, such as immersive experiences in virtual spaces that allow users to try on and mix and match clothes and accessories or that offer recommendations from algorithms that take into account the user’s previous purchases, their sizes and preferences.
Already today, consumers interact with 3D product images almost 50% more than with static ones.
Fashion eCommerce: predictions for 2023
What will users look for in 2023 in the fashion industry?
Due to rising energy costs and inflation, they might considerably reduce their purchases and turn to the second hand and outlet market; conversely, high spenders will continue to look for reputable brands (the luxury market will continue to grow, between 5% and 10% in 2023, up to 14% in China and the US). The average consumer might look at Fashion Renting and decide not to buy, but to rent an important dress for a ceremony or special occasion.
Gender-fluid fashion: changes in society are reflected in fashion, and vice versa. For many retailers, gender identity and its expression, blurring the boundaries between men’s and women’s clothing, will require a decisive reorganisation of the product design, marketing and shopping experience.
A crucial issue for McKinsey is ‘future-proof production’: disruptions in supply chains due to pandemics and the geopolitical situation are no longer to be regarded as occasional emergencies. There is a trend towards new supply chain models based on vertical integration, nearshoring and small batch production and the need to invest in leaner and geographically closer production systems.
Other critical roles in marketing will be those played by creatives, to renew the strategy both in the physical world and in the metaverse, and by sustainability experts: brands must avoid greenwashing by demonstrating beyond propaganda that they are reckoning with the environmental and social impact of the industry, in this case fashion. Indeed, consumers are becoming more and more sensitive to the issue: virtual fitting rooms and technologies for trying on garments and accessories could turn into opportunities to reduce the costs and waste related to return logistics and stimulate a virtuous process of more reasoned purchasing decisions.
The desire to act in a way consistent with reducing environmental impact is also reflected in the second-hand clothing trend. The re-commerce phenomenon not only stems from the need to save money: Gen Z members focus in particular on supporting brands that are more committed to sustainability and recycling, as well as those brands that reduce the amount of plastic in their packaging or choose less polluting shipping methods.
Consumers want to give a second life to the objects they no longer use: Vinted, Depop, and Wallapop are particularly successful, as are platforms offering second-hand and guaranteed used products. 65% of all buyers use a resale service.
Other trends that will continue to grow according to McKinsey include shopping from mobile devices (which now account for 71% of all retail traffic, generating 61% of all online purchase orders). By 2024, global mobile-commerce sales are expected to reach almost USD 4.5 trillion and account for 69.9% of total retail e-commerce sales. While brands have been designing mobile-first experiences for years, these need to be made even more personalised and user-friendly, for instance by offering the right payment options that are more compatible with the mobile checkout process.
The choice of payment options is a factor that heavily influences the purchase decision: one of the main reasons for cart abandonment is a check-out process that is complicated, non-intuitive, or offers few payment choices. The use of digital wallets will continue, such as PayPal, Apple Pay, Samsung Pay, and Google Pay, which are already used for 50% of eCommerce transactions globally. Smartphone payments are growing steadily, as is the use of dedicated and banking apps, which are considered safe and reliable. Formulas such as buy now pay later andhire purchase, already implemented by many platforms, seem to be arousing interest and could become commonplace.
It will be crucial for every sales strategy to offer customers return processes that are as simple and flexible as possible and an efficient customer care service (probably one of the greatest strengths of a giant like Amazon, for instance) as well as an up-to-date data system capable of reflecting the situation in physical shops in real time and cross-referencing it with the customer’s account details. The numbers ofonline purchase with pickup in the physical store are also growing: globally, the buy online, pickup in store model is expected to account for a market worth $703 billion by 2027.
The quality of customer service will be increasingly relevant. According to recent research by UJET,87% of consumers say they will spend less or stop buying altogether from brands that do not offer good customer service. The simplification of return policies also makes a difference in purchasing decisions: 67% of shoppers carefully check the applicable return policies before shopping, and if the return process is perceived as quick and easy, as many as 92% of consumers say they will buy again.
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