According to a survey of 100 companies by the Federal Association of German Textile, Shoe and Leather Goods Retailers (BTE), the digitization of the industry cannot be forced: Even if many fashion, shoe and leather goods retailers had to expand their online sales activities due to the pandemic, around Half of the companies surveyed still do not use this sales channel.
The main reason given was the associated costs: 61 percent of the survey participants stated that their own web shop was not economically viable for them. 52 percent stated this with regard to platform sales and still 39 percent with regard to social media. In addition, high return rates are a deterrent.
Online sales too expensive and unprofitable
Another reason was the low sales success of online activities: In 2021, these accounted for less than five percent of total sales for half of the textile, shoe and leather goods retailers surveyed. For 23 percent of them, the online share was between five and ten percent; at 13 percent between ten and 20 percent. Another 13 percent achieved a share of over 20 percent with their online sales.
11 percent rated their own web shop as at least “partially worthwhile” or useful for achieving a contribution margin, 36 percent rated online platforms and 27 percent social media. Only a quarter of those surveyed considered their own web shop to be “clearly worthwhile from a business point of view”; for sales via social media it is almost a fifth (19 percent) and for sales via platforms only a good tenth (11 percent).
Own web shop and online platforms are at the bottom…
More than 100 companies were surveyed, including more than three quarters with a focus on clothing. A quarter of them (25 percent) already had their own online shop before 2021; 15 percent only set it up last year, while 7 percent are still planning a web shop. However, the vast majority (53 percent) currently rejects it.
27 percent of the retailers surveyed were already selling via online platforms before 2021, and another 13 percent did so last year. Another 7 percent want to “set up this sales channel soon”, but a large majority (also 53 percent) are currently not planning any sales via platforms.
… social media a little further up
When it comes to sales via social media channels, things are looking a little better: almost a third (32 percent) were doing this before 2021; 17 percent only started this last year, while 11 percent plan to do so in the future. However, the majority (40 percent) have no corresponding plans.
Conclusion: “Online sales are not a panacea”
Hence the conclusion of the BTE: “Online sales are not a panacea for weakening business models and must be constantly analyzed and optimized if necessary. Quite a few outfit retailers seem to use it primarily to smuggle away leftovers. In addition to the costs incurred, the decisive factor for commercial success is above all the return rate, which experience has shown to be significantly below average for articles without fitting problems.”
In a similar survey, the BTE recently found that many fashion, shoe and leather goods retailers see 2021 as a “lost year”.