London Fashion Week 2021 will serve as a useful litmus test for where the UK stands in 2021. Is the mood optimistic for a full recovery? COVID-19 has hastened many nascent developments but which ones are here to stay? The rise of e-commerce and the role of social media in the fashion industry have had a significant impact on consumer habits and behaviours. Earning brand loyalty is now paramount in the same vein as the promotion of values guided by sustainability, equality, diversity and inclusion. A personalised and intuitive consumer experience can mean everything when it comes to securing sales. The disruption to the status quo brought on by the pandemic offers tantalising opportunities for direct-to-consumer (DTC) business models that are able to build and nurture their communities from scratch.
Staying ahead of the game in a changed economic landscape
The fashion world by nature must stay ahead of the game. Household names, big time players and breakout brands must all lead rather than follow if they are to remain relevant and avoid being left behind. But this does not fully explain as to why the fashion industry is currently evolving so fast. Tastes no longer simply change with the seasons but are now also driven by an ever-growing number of internet trends. Fads have always come and gone, but technological developments mean this rate of change can sometimes make it hard to keep up. For many UK online fashion retailers, COVID-19 propelled a decade of growth into a single year. Yet such levels of expansion also means that profit forecasts are at risk of plummeting almost as quickly as they peaked in the last 18 months. Navigating these choppy waters requires a precise understanding of what has changed, and what will likely happen in the months to come.
With the September edition of London Fashion Week 2021 just around the corner, several lessons can be learned by comparing how the February edition was celebrated just six months ago in the gloom of the second wave of the pandemic.
Technology is changing the goal posts: Are hybrid approaches here to stay?
Some mainstays of the February event like Victoria Beckham opted not to participate whilst other British fashion designers such as Molly Goddard pushed ahead with adapted plans for the virtual format. Burberry, perhaps the most recognisable London fashion brand, not only accepted the challenge of presenting its Spring/Summer 2021 collection online but embraced it, creating a Burberry show to remember with an entire film set in the middle of a forest and broadcast live on Twitch. Streaming platforms are moving the goalposts offering a tantalising alternative to consumers who have been subjected to lockdowns and restrictions in movement.
The British Fashion Council’s partnership with TikTok as part of its NEWGEN campaign further underscores how emerging platforms are playing a crucial role in digital strategies and are an essential tool if new and young target audiences are to be reached. Clearpay’s continued sponsorship of London Fashion Week this September is also revealing in two ways. It highlights concerns about the need to encourage consumer spending in the wake of the economic downturn but it also reflects the digital shift driven by tech solutions as the Clearpay Group allows customers to “buy now, pay later”. It is not all digital though. Just as music festivals have sold out up and down the UK this summer, the hybrid nature of London Fashion Week shows there is still an appetite for physical events and that the digital experience, however well-choreographed, is not yet capable of replacing entirely the unique buzz of attending a live event.
To complement this blended approach the British Fashion Council is marking the reopening of London by relaunching a city-wide celebration across the city. By making the best of British fashion accessible to consumers it hopes to support the retail sector get back on its feet and as well as connect London Fashion Week with new audiences and communities.
Underlining Retail Trends: Robust and increased growth
According to Deloitte’s Retail Trends 2021 report, online sales are proving remarkably robust and they are expected to continue to grow at above market rates for the foreseeable future, driven by both consumer demand and retailer investments. Thankfully for the fashion world, this seems to have been heard loud and clear as the e-commerce side of the fashion business has been billed to grow to $1 trillion globally by 2025. Meanwhile in the UK, it already represents 20% of the market share. Clothing accounts for 67% of these sales whereas footwear has an 18% share and Bags & Accessories sales cover the remaining 15%. The top three online stores in the UK, Next, ASOS and John Lewis, account for a market share of 16% within the online fashion retail sector. But, compared to the UK e-commerce market across all sectors, where the top three stores account for 22% of the market volume, the online fashion market has a relatively low market concentration suggesting opportunities exist for smaller brands to make it too.
This new reality has seen the rise, or more the resurgence, of the direct-to-consumer (DTC) business model. Decades before the internet, the DTC model was favoured by companies looking to eliminate the middlemen. A win-win situation for consumers and brands because it lowers costs by bypassing third-party retailers. So why all the fuss now? The dominance of third party platforms such as Amazon have helped drive the current 2021 levels of e-commerce as they have connected consumers with brands that otherwise would not have the funds or infrastructure to create and promote their own platforms. Cue the rise of social commerce or s-commerce on platforms such as Instagram.
The DTC approach has been able to take on a whole dimension in 2021 with the prominence of branded and personalised content made possible by the collection of user data. The storytelling and community management side of DTC is fundamental as the brand is often sold just as much as the product as it becomes essential to communicate a brand’s values clearly, including holding a clear view on sustainability, social responsibility and inclusive practices. Indeed, 63% of shoppers now research a brand online before making a purchase, according to Think With Google. This can prove to be a distinguishing factor compared with legacy brands who have struggled to move with the times.
Empowering and enhancing the Customer Experience
As new trends and changes keep emerging, customer experience remains one of the main differentiator in the fast-paced fashion industry. So why is end to end CX so important? Delivering exceptional customer experiences ensures higher customer loyalty and retention in the competitive online retail and delivery sectors. The higher the customer loyalty, the more likely the customer will return to purchasing a product or service. For DTC companies in particular, the CX must be placed at the very heart of a company's mission to include a beginning to end holistic service and should be agile, simple, transparent and competitive. And with the high increase of online transactions, delivery and shipping management has become a key concern for online fashion retailers wishing to offer an outstanding experience to their clients. That's why at Packlink, we assist and empower companies in this process, by allowing them to integrate entirely with their existing platform suppliers and whilst enjoying the benefits of a multi couriers setup that allows them to choose from the full range of national and international delivery services at competitive prices. That way, we help them streamline their shipping processes to offer their clients an easy and smooth delivery, that enhances their customer experience.
Whether following the glitz and the glamour or looking for an indication of emerging behaviours in e-commerce, the fashion industry can be trusted as a frontrunner of trends in both the economy and culture. Driven equally by consumers and creatives alike means it can offer real-time insights into what we can expect in the coming months... Let’s see what London Fashion Week has in store!