The global apparel consumer is changing dramatically and companies must be well-versed in their needs and desires in order to succeed.
In a presentation Tuesday morning, Aimee Kim, partner at McKinsey & Co., said it wasn’t too long ago that retailing was “straightforward,” but today’s options are “mind-boggling,” both in terms of brick-and-mortar and online.
This reflects the drastic change in shopping behavior as well.
Among the most important things to know, Kim said, is that 68 percent of today’s apparel consumers shop both online and offline before making a planned purchase.
The growth in overseas travel also plays a part, she said, noting that high-net-worth consumers travel an average of 4 percent a year, which also impacts their shopping habits.
Kim said that today’s consumer is “hyper-informed,” and 66 percent of shoppers with mobile apps search for promotions regularly and “religiously.”
This includes luxury consumers, she said. Although it’s well-known that Millennials are always comparing prices, this is also “among the most important online benefit for luxury shoppers.”
While only 6 percent of luxury purchases are being made online today, this number is expected to triple to 18 percent by 2025, she said, meaning that luxury as the “last frontier” for brick-and-mortar retailing may soon be a thing of the past.
Even so, she said, “you still need to invest in stores, but it doesn’t mean laying down a lot of cement.”
Investments in brick-and-mortar will be different in the future. “The physical store is still the primary touchpoint for the luxury consumer,” she said, noting that 80 percent of luxury consumers say that’s where they still get their main brand experience.
But those stores have to be special.
She pointed to the recently opened Dior flagship in Seoul as an example, saying that it, and others like it, provide the “ultimate experience” and are worth the investment.
But it’s not just high-priced emporiums that are connecting with consumers.
Kim said something as simple as a pop-up shop or a brand experience center like Bonobos’ Guide Shops, can also help a brand’s online business flourish. For example, 43 percent of mobile shoppers said they feel better informed after visiting a store, Kim revealed, adding that investments in brick-and-mortar are justifiable in these cases.
Turning to department stores, which have been losing market share over the past several years, Kim reminded the audience that they still represent an “overwhelming part of the market” in many countries around the world.
“Iconic” retailers such as Harrods in London and Lane Crawford in Hong Kong are still major tourist attractions, and brands considering partnering with stores such as these are on the right track, she said.
The same is true for certain malls — particularly those in emerging markets such as China and the Middle East where The Dubai Mall attracts 80 million visitors a year.
Successful multibrand stores such as My Theresa or Farfetch can also provide a label with global reach, she said. and reaching out directly to consumers — or “C to C,” as she called it — still has a place as well, depending upon the market.
Kim said the three most important suggestions to take away from these findings are to: redefine your legacy store portfolio; identify the winners in terms of format and partner with them, and always ensure a consistent brand image regardless of where and how your product is sold.