As retailers prepare to release fourth-quarter earnings, analysts will be eyeing the impact of holiday promotions, online sales and in-store traffic on results. Analysts and investors will also be tuning in to changes in consumer spending patterns — and noting if these will continue this year.
For retailers and fashion apparel brands, the task of meeting consumer demands has its challenges and opportunities. Consumers seem fickle, and less brand loyal. But technology is helping companies leverage data to better meet the needs of shoppers. Last month, the Council of Fashion Designers of America teamed with Accenture on a program to help brands and designers use data and technology to bolster sales.
Here, Jill Standish, senior managing director of retail at Accenture, discusses consumer trends impacting the market as well as how fashion brands are using various technologies.
WWD: The see-now-buy-now trend seems to be the latest consumer demand in a redefined landscape for retailers and fashion apparel brands. What other consumer behavior trends are shaping the market?
Jill Standish: The informed and connected consumer is one notable trend. The social side of shopping is still alive and well — but it is changing. In today’s digital age, consumers (particularly Millennials and Generation Z) like to feel connected to each other as well as to brand ambassadors in order to discover trends and obtain advice and/or feedback.
Instagram, Snapchat and YouTube are all places where consumers get their inspiration, whereas historically they looked to print and TV advertisements.
Another key trend is about experiences. As disposable income is trending toward spending on experiences, consumers are driven by “events” both in-store and via digital interactions. Celebrity visits, trunk shows, custom makeup, etc., are all good examples of how retailers are appealing to consumers’ desire for engaging interactions, leveraging their store footprint to drive consumer traffic.
At the same time, custom is also key; tailoring a product and making it unique for the consumer appeals to today’s individualism culture. In addition, delivery expectations are at an all-time high driven by e-commerce-only retailers. Consumers can shop to compare price and delivery options and clearly use this as a method for selection.
Finally, consumers are more price conscious and promotion driven than ever before, as we experienced this holiday. They do not expect to pay full price if the item is not “rare” or “only available for a limited time.”
WWD: And how are these trends impacting business?
J.S.: It is creating an imperative for retailers to build stronger emotional connections with their customers. Going forward, adding both targeted and hyper-personalized offerings and also nurturing the engagement through a more refined, redesigned retail experience will truly matter.
More specifically, brands will need to create unique products and experiences to be in a position to maintain full price. Launching products that are only available for a limited time in a limited market creates such a buzz that consumers have been known to form lines outside of stores to get their turn at a limited-edition footwear or clothing line.
WWD: What role does technology play in this market today? Who’s using it the right way?
J.S.: With advances in AI, IoT [the Internet of Things] and big-data analytics, among others — humans can now design technology that seamlessly anticipates our needs and delivers hyper-personalized experiences, enabling a new era of invention and human amplification that will result in unimagined levels of creativity, ingenuity and productivity.
By focusing on “Technology for People,” leaders can be proactive and responsible in leveraging new models and technology approaches to ensure positive impact. Further, retailers who adopt services that are “living” and “human-centric” will be the ones who gain the biggest and most loyal consumer following. They must look outside their own industry for examples of how these liquid expectations are being met by leaders in consumer experience.
Uber is a great example of a company that has removed barriers such as receipts and cards and this has changed how consumers expect to check out of a grocery store or department store.
WWD: How can fashion apparel brands and retailers leverage technology and consumer behavior insights to better navigate this challenging market?
J.S.: The digital revolution today is an age of human empowerment: rapid advances have created a people-centric technology environment where the power lies with people to shape technology as they see fit. In terms of skills, retailers will need to up-skill to create an agile workforce that can operate efficiently and drive fast innovation through fluid projects and organizations.
Fashion apparel brands and retailers can leverage technology in a number of ways to become more competitive and navigate this challenging market. They can leverage systems that can gather data from across the enterprise. Understanding profit by product, by store and by customer is the holy grail for retailers. Understanding how levers such as price, promotion and free shipping affect profit, as well as how these interplay across the assortment, customers is too complex for spreadsheet analysis. Providing data-driven decision making will allow today’s retailers to become better operators by navigating complexity.
Hyper-localization — the ability to understand consumer desires by city, state or region — will also be key to the survival of brands in the future. Localized assortment and having services or events that attract the local consumer will pave the way for driving brand devotion and loyalty.
Fashion apparel brands and retailers can invest in technologies that facilitate gathering of consumer insight and/or enable them to adapt the merchandise planning processes — these solutions are available today.