Apparel companies are hanging by a thread as consumers spend less moneyon stocking their closets, preferring to express themselves through social media rather than by what they wear and favoring weekend getaways over new clothes.
Apparel companies at both ends of the spectrum-big name brands to new wave upstarts-are folding as people buy less clothes. As noted by Bloomberg, apparel’s decline has been in progress for decades: four decades ago, clothing accounted 6.2% of U.S. household spending, according to government statistics, but today, it’s only half that.
People would rather travel, dine out and have more experiences rather than buy more clothing, and more money is going toward media content and data charges too, noted Bloomberg. But regardless of the reasons for the shift in shopping habits, the remaining apparel and fashion companies are facing a retail landscape that’s more competitive and cutthroat.
The key question is, how do they win the smaller share of disposable income consumers are willing to spend on clothing?
Take a tailored approach
Apparel companies might want to stop trying to be all things to all people. Instead of looking at the customer base as monolithic group, they might want to takea page from Walmart.
The retailer continues to ramp up to compete with Target and Amazon in part by shaking up its approach to apparel. As reported by Retail Dive, Walmart has revamped its lines for women, plus sizes and children with more focus on style. It’s also offering new private brands in store and online at Walmart.com, as well as more upscale offerings, including apparel, shoes, accessories and jewelry from Lord and Taylor.
Apparel companies might want to stop trying to be all things to all people.
Walmart’s multi-pronged apparel approach follows in the footsteps of Amazon’s private label efforts, which has led the e-commerce company to enjoy rising apparel sales. Target has also revamped its private-label apparel lines for men, women and children, including plus sizes available in stores.
Coresight founder/CEO Deborah Weinswig told Retail Dive this approach is a fundamentally strong strategy as the closure of more than 3,300 apparel stores and almost 700 department stores over the past year puts billions of dollars of apparel spending up for grabs.
Be more digital
It’s not enough just to have effective e-commerce strategy. Apparel companies also need to bolster their overall digital strategy, and that requires having experienced people to spearhead their efforts.
J. Crew, for example, recently tapped a Starbucks executive VP to be its president and chief experience officer for his knowledge leading the coffee chain’s digital operations. Like Walmart, the struggling J. Crew is responding to Amazon’s success in the apparel business by leveraging its own iconic brand and building world-class customer experiences across every touch point, including digital platforms and in-store.
Investing in digital has helped other consumer goods sectors, including beauty and retail, so it makes sense for apparel brands to learn from their success. The recent rise of the chief digital officer (CDO) isdriven by digital transformation efforts across all business sectors. One apparel brand that’s already embraced the CDO role is Nike, who took charge of all products and services across Nike.com and Nike+, as well the brand’s other digital platforms.
Ultimately, to succeed, apparel brands will need to successfully integrate digital platforms with the in-store experience.
Rethinking your return policy
Technology is not the only thing apparel companies need to recapture the disposable incomes of consumers. As more people buy more clothing online, return and exchange policies become even more critical.
Accepting any and all returns is not the answer, however, as L.L. Bean learned the hard way. Its generous, lifetime satisfaction guarantee was kiboshed after abuse of the system cost the company $250 million over five years. Apparel companies should consider some flexibility that balances profitability and customer satisfaction by mixing their online sales and physical locations.
Zara, for example, is testing an online-focused store concept. Its click-and-collect pop-up allows shoppers to pick up their online orders the same day, and if necessary, make returns or exchanges.
The apparel industry is undergoing a significant shift driven by changing consumer priorities. If apparel brands want to keep a sizable piece of the shrinking pie, they need to adapt to the current environment. By understanding customer expectations and using customer intelligence to revamp their strategies, companies can better attract consumers’ disposable income.