MILAN — Exceeding consumers’ aspirations by creating engaging, immersive experiences emerged as one of the key topics discussed at the two-day digital-focused Decoded Fashion Milan 2017 Summit, which closed here Wednesday night.
The matter is relevant for both traditional entities, such as luxury labels and department stores, but also pure digital players. In fact, as 24 Ore Business School academic coordinator Annamaria Tartaglia highlighted, the market is defined by “an ageless question for being fully engaged. In this sense, there is one costumer, since social values transfer to the different generations.”
What are the strategies the protagonists of the fashion industry are embracing to reach the ambitious goal?
High-quality service is definitely a pillar for Russian department store Tsum, which according to its chairman Andreas Schmeidler, expects next year to double its e-commerce sales, which currently account for 10 percent of the company’s total turnover. The executive also said that Tsum forecasts to double turnover within five years both consolidating the Russian market and expanding its business in the former Soviet countries.
“We have dedicated personal shoppers establishing tight relationships with clients,” he added, revealing that, along with developing a deep sense of loyalty in shoppers, they are also able to increase the value of every single order of between 25 and 30 percent. “The strategy is to put the same DNA of the physical store in the online commerce.”
“On Net-a-porter, 50 percent of the purchases are made by 2 percent of the customer base,” said YNAP president of online flagship stores Paolo Mascio, highlighting the relevant role of personal shoppers in the process.
“The future of retail is about service and how to execute it,” said Jennie Baik, chief executive officer and cofounder of Orchard Mile, an online marketplace devoted to designer and contemporary collections. The entrepreneur, for example, explained how after the launch of the “My Mile” personalization program, which enables users to browse a selection of products and brands fitting their preferences, Orchard Mile’s conversion rate increased 20 percent.
“The merger of recognition, loyalty and data definitely enable companies to provide a data-driven real-life experience,” Baik added.
During the summit, the conviction emerged that the digital revolution will help solve the problem of overproduction and overstocking.
“I think that institutions have the responsibility to support emerging brands in the creation of their own online community,” said Camera Nazionale della Moda president Carlo Capasa. “In this way, upcoming designers will have the chance to sell directly to their customers by reducing the investment in stock. In addition, limiting the production of garments, the impact on the environment will be less dramatic.”
Digital native fashion label Away to Mars is actually taking advantage of the potential offered by the web. Instead of developing a traditional internal structure, the label is based on a digital cocreation platform, where designers from all over the world can upload their sketches. The selected ones are produced and sold online. The brand is opening its first bricks-and-mortar boutique in London on Nov. 27. “We decided to open a shop to give people the chance to actually see and touch the clothes,” said Away to Mars founder and ceo Alfredo Orobia. “In addition, I think it actually gives credibility to the brand.”
Retail also seems to be a credible point of reference for Miroglio Fashion’s customers. “Thirty percent of the online orders made at our brand’s online stores are picked up at our boutiques,” said the Italian fashion group’s ceo Hans Hoegstedt.
But how can traditional stores transform to meet the needs of their audience of increasingly demanding costumers?
According to Saisangeeth Daswani, head adviser — fashion, beauty & APAC at innovation, research and trends advisory firm Stylus, we have entered the era of “liquid retail,” an omnipresent retail where “individualization is king, reflexivity rules the roost and ‘pulsating’ brand relationships are vital.”
For example, along with suggesting companies engage customers online with live auctions and video, she also showcased the potential of physical environments designed to have flexible and dynamic set-ups able to house events and in-store initiatives.
In this scenario, customized CRM activities become essential for brands to engage customers and drive traffic to the online and bricks-and-mortar stores. For example, eyewear giant Luxottica has developed bespoke newsletters where potential customers see a rendering of their faces with the latest frames introduced by the company.
In addition, along with customization, Google luxury industry manager Emily Hopcroft highlighted the importance of speed to be competitive in the digital environment.
“A web site cannot take more than three seconds to upload on mobile,” said Hopcroft, adding that an upload speed of one second guarantees the best conversion rates.
According to Franck Negro, managing director, Southern Europe at digital advisory firm Yext, brands’ web sites are not the ultimate destinations of online users anymore. “Brands now exist in so many different platforms and they have to be present and visible within the entire digital ecosystem through the different touch points,” he said. “You can’t actually master the customer’s journey but you can take control of the data to provide your customers with the best information possible,” he said, highlighting the increasing importance of voice search services. “By 2010, 50 percent of the searches will be done through voice systems.”
Among the multiple customer touch points, mobile applications, including Instagram, emerged as fundamental to establish solid relationships with the public. In this environment, the role of influencers continues to increase.
Even though there are designers like Fausto Puglisi, who said that he prefers to work with artists such as Madonna and Jennifer Lopez, “since they always have a creative approach,” many brands are relaying on digital influencers to boost their visibility and business.
“The reason why the influencer phenomenon is so powerful is that influencers have a real, physical and personal experience of the product and they share it with the industry,” said Riccardo Pozzoli, cofounder with Chiara Ferragni of TBS.
Establishing tight relationships with celebrities, such as Pharrell Williams and Kanye West, as well as online influencers has been crucial also in the revamping of the Adidas brand.
“We never tell influencers what to do; we ask them to talk with us,” said Tommaso Saronni, Adidas Group director digital, PR & Social for Italy. “We want them to live our products and try to express how they feel when they wear them.”
“Please do not underestimate the power of real-world experience and think how to bring the real experience into the digital world,” said Levi Strauss & Co. Europe vice president brand marketing manager Anit Van Eynde, closing her session, where she showcased the denim brand’s activities focused on engaging customers at a deeper level. These include customization projects, as well as initiatives featuring a profound social impact.
During the summit, presented by Pitti’s digital arm e-Pitti, the Flowbox start-up, enabling brands to easily source contents from social media, won The Frow contest.