The fashion industry is still struggling with the consequences and challenges of the pandemic. It was a 26-month state of emergency that left its mark on retail everywhere. Nevertheless, the fashion industry in particular seems to be one of those that has at least mastered these challenges relatively quickly. Digitization was already in full swing before Corona and has accelerated since then. Fashion retail is inherently faster, more diverse and also more adaptable than other industries. Many processes and even entire business models have been turned upside down – but there is still a lot to do. Three key trends that are being talked about a lot these days show the continued willingness and drive of those involved in fashion retail.
1. Direct-to-consumer leaves its niche existence and becomes the standard in fashion retail
You could say: Direct sales to the consumer is the key – to success, to a forward-looking business model and to the future of retail. That’s easy to say, because in the fashion industry you hear this talk everywhere: Get rid of wholesalers, we don’t need you anymore. But where do we really stand in this change in business models? Marcel Brindöpke, Managing Director of heyconnect, says it very clearly: “Direct-to-consumer is not just an option for fashion brands. It is a mandatory requirement for surviving in the market. Relying on trading partners is no longer possible. Fashion DTC was niche because of a lack of knowledge, skills and perceived need. But Corona has turned the tide forever and changed the game forever. Brands must now abide by these new rules. Not just to survive, but to seize the opportunity to assert yourself.”
2. Headless e-commerce as an accelerator for agility and flexibility
Shopify and Salesforce paved the way for this technological revolution. The backend and frontend of a shop system are increasingly being decoupled, giving developers the ability to edit and provide updates without impacting the customer’s user experience. This is exactly the prerequisite for a dynamic device landscape beyond the “computer”. Voice commerce, social shopping and smart watch functions are already enabled by the headless e-commerce approach. But this is not just a technical issue. Ryan Mullins, managing director of Aglet, believes that consumers are looking for new ways to connect with brands and sees great potential in this: “The relationship between retail and brand is becoming ubiquitous. I’ve been saying for many years that gaming is consuming the world. Not because we’re playing more games, that’s obvious, but rather because game mechanics and immersive experiences are coming to the fore. You play in the space of the brand. So brands will likely find new ways to connect with consumers and fans that are disconnected from normal and traditional commerce.” Headless e-commerce connects traditional retail with the new world of authentic digital commerce – a development that their true power will only unfold in a few years.
3. Hybrid trade has prevailed – the omnichannel model has arrived at almost all companies
Buzzwords such as hybrid commerce or omnichannel have been making the rounds in the industry for years. The motto was (and is): brands and retailers have to be multi or omni to survive. The theory has become reality: The fashion trade has experienced the greatest change in its history and can now play with technical and logistical innovations that were hardly imaginable five years ago. Now even small brands have easier access to these technologies and innovations. This year we’re seeing an unprecedented number of tools for brands and retailers to experiment with. Felix Jahn, Director eCommerce & Digital at the s.Oliver Group, agrees, but adds another very important aspect: “Omnichannel commerce is less technology-driven than people-driven. This is the key to success. Tools are aids or enablers, but people management determines the bottom line and success. Especially the employees of smaller brands who work at a POS, for example, need to understand the tools and enjoy playing with them. The fashion industry has made a huge leap forward in the last two years. Many initiatives have shown great results when used judiciously, such as click & collect, microwarehousing or parcel terminals at the POS. It’s up to people to get the technology right for this brave new world of retail we all dream of.”
These three major trends are just a few of many that will have a massive impact on fashion retail this year and in the years to come. The transformation has only just begun. Alexander Otto
You can find more trends and topics in the ECD expert interviews.