Stage 1 of the retail customer Journey for fashion
Stage 1: Awareness and Research, is where retailers and brands attempt to connect with customers across a multitude of physical and digital platforms, in a much more tailored, targeted and meaningful way.
Big data, artificial intelligence (AI), and insight mining are at the heart of the retail revolution. The availability and quality of consumer data enables retailers to personalise their communication to enhance their chances of building customer loyalty.
However, there are challenges to manage the balance between value versus intrusion, convenience versus privacy, and choice versus influence fatigue.
Thanks to the internet, the last decade has seen greater transparency in price, service and quality. Not only has the variety and range of products widened, but the power dynamic has shifted from the retailer into the hands of the consumer.
This report takes an in-depth look at the key factors influencing stage 1 of the customer journey for the fashion industry. It touches upon the role of technology, consumer behaviour and trust, and comments on how trends will evolve in the future.
The impact of disruption technologies
The eight key technologies below are at different stages of development, but forecasts suggest that by 2023 the vast majority will be integrated within the retail value chain to varying degrees, causing significant disruption.
Impact of disruptive technologies table
Source: Accenture, World Economic Forum
“Retailers able to integrate the physical and digital realms will have the competitive edge over their rivals, particularly for higher-value purchases.”
One of the most recognised applications of data use is accurate product recommendation. Although AI-powered recommendation engines vary greatly in sophistication, advanced algorithms can account for real-time variables such as:
- customer preferences
- purchasing habits
- gift purchase dates
- social media content
- location and weather
Issues of trust
While brands invest heavily in digital technology to achieve the goal of personalising experiences for every consumer, research indicates that customers – particularly older shoppers – have concerns over data security and how their personal data is used.
55% of respondents in our survey indicated that, as online product recommendations are typically inappropriate, they do not see the benefit of providing more personal data.
With only 4% of respondents trusting retailers when handling their personal data, it’s clear to see why customer information care has become a priority for retailers and brands.
Tangibility
The in-store experience has become a crucial differentiator of choice for shoppers. Ultimately, retailers that create engaging and meaningful experiences can build customer loyalty, boost frequency of visits and enhance lifetime value.
As the purpose of stores evolves, traditional performance metrics such as sales per square foot will become increasingly superseded by new metrics such as ‘experience per m²’.
Successful retailers will have to provide physical and online platforms that function over a multitude of channels such as stores, online and social.
“The in-store experience has become a crucial differentiator of choice for shoppers.”
What lies ahead?
Today’s customer journey for fashion is truly unrecognisable from a decade ago. The key challenge for retailers is in the sophisticated use of technology, data science and creating meaningful experiences for consumers.
Furthermore, the new age of retail will need to incorporate different metrics such as:
- in-store social sharing
- brand buzz
- engagement
- ‘in-store-on-the-go’ customer interconnectivity
Retailers that modify their business models quickly to a more digital and experience-led approach will command a larger share of both spending and the attention economy. As the decade continues to unfold, we will witness a complex rollout of technologies that support these themes; and retailers who are innovative in their implemention are sure to capture the imagination of consumers.
We hope you found this article interesting. For more insights and industry analysis be sure to connect with us.
About this report
This research was conducted by Retail Economics in partnership with Pennigtons Manches Cooper and forms part of a wider piece of research that focusses on the initial stage of the retail customer journey for the fashion industry (stage 1 of 4). It unpacks the key themes that influence consumers and retailers here and identifies future trends in this space. Retail Economics supplied the data sets, collected from a consumer survey of over 2,000 nationally representative individuals in Q1 of 2019.
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