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What's in Store
for 2013?

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The Digital Issue

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Apparel

By Bertrand Chovet

Apparel

The dynamism of consumer needs and desires is defying business as usual in the apparel market. From collection design to seamless services, from social media to brand attractiveness, from sales activation to store development, responding to emerging needs and implementing solutions fast is more important than ever. However, the opportunities in emerging retail markets, such as the BRICs or CIVETs, mirrored the fragile recovery of many Western economies.

Recent research from Vente-privee.com found that when 100 fashion apparel purchases were made offline in Europe, 109 were online. This trend will continue as people are planning to buy more online. But let’s keep in mind that e-shoppers don’t give the cold shoulder to in-store shopping. The distinction between online and offline preference is affected not only by the customer’s gender, taste or lifestyle, but also by the maturity of retail models and their ability to deliver a business conversation with consumers. The performance of brands such as Gap, H&M, Lululemon, Nordstrom, Uniqlo, Urban Outfitters, Undiz, Vans and Zara illustrate this point in many geographies and many ways.

Whatever the channel, in the eyes of shoppers, the speed of change is highly visible due to the plethora of challenges and opportunities the apparel and fashion category is facing.

ANTI-COMPLEXITY
Competitiveness is increasing, while fragmentation of players is high. It results in a complex market with different organization types (brands, retailers) representing alternative business models and capabilities and extremely reactive wide offers. For all, brand is playing a key role both in contribution and in risk adversity. Attention to brand proposition and brand management will continue to grow and deliver better business results.

Agile and mobile shoppers are expecting less complexity and more transparency than ever. Clarity of the brand is crucial. They expect a clear and definite point of view from a brand, whether it’s a merchant or a branded retailer. Trendsetting, fashion interpretation, lifestyle incarnation, in-store experience, digital connectivity and activation, collaborative branding, direct interaction, exclusive platforms and offers, will all be key elements to build differentiation and loyalty in 2013.

It will be also about building relevance and consistency: understanding of the purchase funnel, anticipation of customer needs, rationalization of best selling items, and simplification of the range will provide drivers for growth.

Beyond logistics, we can predict that RFID will play a key role, bringing visibility and accuracy to merchandise, but also re-engaging consumers all along the value chain and helping apparel brands enter into full digital retailing.


"By bringing the authentic core of their brands to life and offering merchandise that is relevant to the specific preferences of their target markets, apparel brands will inspire a desire to shop, a desire to wear and, above all, they will provide an opportunity for consumers to become their best, most beautiful selves..."



THE IMPORTANCE OF AUTHENTICITY AND RELEVANCE
In the digital era, consumers have the power. Seeking best oppportunities, shoppers are trading up or down across categories and channels. On one hand, after a good experience, shoppers are more committed to buy products and services. But after a bad experience, they will tell their community, who will then transform a destination store into a store to avoid through word of mouth and their social graphs, whether that store is phyical or online.

Beyond all digital interaction, it will be about delivering a unique and differentiated experience in a consistent manner. That is where brand will have a robust proposition to express and to deliver, while staying relevant to customer needs.

Because what we wear reflects who we are, the apparel and fashion category has the opportunity to reach the hearts and souls of consumers by helping them find numerous ways to express their individuality. In 2013, the conversation and the connection that apparel brands will be able to build will strengthen their business model as well as their performance.

By bringing the authentic core of their brands to life and offering merchandise that is relevant to the specific preferences of their target markets, apparel brands will inspire a desire to shop, a desire to wear and, above all, they will provide an opportunity for consumers to become their best, most beautiful selves.


"Revenue generated by web/mobile continues to grow rapidly, which means that digital is no longer a nice 'extra' —it’s mandatory. "



THE OMNICHANNEL ERA
Despite a tough 2012, the virtuous cycle of online shopping driving store traffic has given many apparel brands a boost. In Europe and the Middle East, 40% of major retailers are looking to expand their online coverage next year (versus 28% last year). Despite expansion of online offerings, however, stores still matter and the battle for space in the best locations is still on. The flip side, of course, is more showrooming: customers checking out items in-store and then heading online or to their smartphones to seek a lower-priced item elsewhere.

Revenue generated by web/mobile continues to grow rapidly, which means that digital is no longer a nice "extra" it’s mandatory. It will be a critical platform to stay connected and maintain a conversation with consumers. Overall, the omnichannel era provides apparel brands with promising new opportunites to create stronger loyalty.

In 2013, turning customers into advocates will be an absolute necessity for apparel and fashion brands. In order to accomplish this, ease of shopping, creating enjoyable in-store or online experiences (built on the key attributes and personality of the brand) and seamless service between the brick and click must be top priorities. From garments to mobile, brand presence in the hands of shoppers will weave greater loyalty.

TODAY, ETHICS MATTER
American Apparel has faced an advertising ban by various countries’ advertising authorities. H&M has been under pressure over forced labor cotton. Two-thirds of high street garments tested by Greenpeace contained potentially harmful chemicals. In repsponse, environmental activists have pressured numerous apparel brands to commit to "Zero Discharge" of all hazardous chemicals by 2020. Uniqlo has signed on to Greenpeace’s campaign, joining other top high street fashion brands that have taken its Detox pledge including Adidas, C&A, H&M, Levi’s, Nike, Puma and M&S.

In 2013, scrutiny of the digital sphere will increase, making exemplary corporate citizenship practices fundamental to protecting brands from adverse risks. Because apparel and fashion mirror both the individual and society, representing our taste, values and aspirations, these brands are under unique pressures to make ethical choices. As such, the role and responsibility of global players to deliver on sustainability continues to grow in importance as consumers become more aware—faster than ever through the internet and social media—of both mishaps and new initiatives. Consumers now expect a meaningful change in practices, from supply chain to all touchpoints.

Whether the issue is authenticity, relevance, transparency or sustainability, if there is anything apparel brands can do to elevate brand loyalty in 2013, it is this: be what you are, do what you say, and say what you do.

FYIQ

  • ABOUT Bertrand Chovet
    Bertrand Chovet is Managing Director, Interbrand Paris.

    Bertrand.Chovet@interbrand.com
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