With the current economic turbulence, many sectors, including fashion, have experienced significant global disruption. The fashion retail sector in particular has seen profitability move south in recent years, we have seen many high street brands simply disappear from the radar. This stems from two main factors, namely the challenges of online technology and also due to the fact that fashion is an elastic sector and is duly affected by economic downturns.
In the past eight years we have seen an increase in the number of trendy ecommerce platform startups. Many have survived and many have simply “disappeared into the ether”, but this trend continues to grow exponentially. Since Natalie Massenet, former CEO and founder of Net-a-Porter, launched the phenomenal power of luxury fashion online, she has sailed thousands of ships of converts from fashion startups.
However, every two weeks there are rumors that fashion startups are “exploding”, that the fashion ecommerce industry is simply a saturated, too easy to pick up market consisting of ripe fruit. Furthermore, it is thought to be very capital intensive to maintain, innovate, and even more expensive in terms of marketing requirements for customer acquisition.
So is there a magic formula? A significant number of fashion start-ups fail and very few survive without significant angel funding or venture capital. Everyone seems to be looking for the next explosive formula. Maybe there is no great design and maybe the answer is right under our noses. It could simply involve keeping up with the times.
We have seen the bottom line impact of social media in many industries. Perhaps these methodologies should be used? It shouldn’t be about shopping anymore, it should be about social shopping. Women are the largest demographic in terms of online shopping and we all know that they are a “social species” when it comes to shopping. The advent of Facebook and Twitter has eased the strain on marketing overhead a bit and some relatively new companies like Farfetch.com have gained a significant proportion of their user base from Facebook, so social commerce appears to be a way to advance.
The fashion ecommerce sector is like any industry and will fluctuate with tastes, credit availability, and the economic climate. There are still opportunities at stake; the market is expected to grow to $ 380 billion in 2015. More than 20% of fashion purchases are made online by 72% of women. So is it absurd to think that returns will constantly elude this industry’s onlookers? Perhaps the answer is to potentially look for new and innovative ways to monetize the industry as opposed to the purely rigid top-down techniques that the fashion industry constantly uses. In addition, to create models that allow flexibility, that can be easily rotated and reversed if necessary, so that they are less virtual and more attractive, and to apply in action the information obtained through the mechanisms of customer feedback.
