Fashion industry: when brick and mortar boosts online business

NewsFromThePlatform | September 21st, 2016

The relevance of online fashion shopping is increasingly supported by research. Online fashion is a serious business, especially in Italy, since – as shown by the eCommerce B2c Observatory of the Milan Politecnico University – it is worth over € 1,8 billion, with a 25% growth over 2015. And that’s not all: fashion eCommerce is worth 10% of the total Italian eCommerce industry and the influence of eCommerce in the fashion industry equals 5% of the whole retail market (1% more than 2015). Besides, if you consider the industry evolution over the last 5 years, the average annual growth rate of online clothing has approximately amounted to 30%, which is double the average annual growth rate of the eCommerce industry as a whole (+15%).

On the one hand, these figures come from a change in the attitude of Italian consumers, now accustomed to digital shopping, on the other, they are the result of a wider supply: not just commercial and low cost retailers have gone online, but also big luxury brands that now see their digital offer as a point of strength of their business.

In short, selling on the web is a necessary step for the fashion business. What is more, today’s fashion industry innovation begins directly on the web, thanks to young start-ups that decide to move their first steps online, without having a brick and mortar store at all. By doing so, in fact, they succeed in disintermediation and go directly to the end consumer, providing high quality items at competitive prices.

However, the new digital fashion brands have come to understand that in the era of “fashion experience” the web, by itself, is not enough: you need the physical store, the place where you can touch the products, live the real store experience. For this, even if it might seem they are going backwards, the digital fashion brands are creating real-life spaces where customers can go to try the items on and be assisted by a style expert.

For example, the eyewear design startup Warby Parker started its online business before opening its store in the heart of SoHo – selling original and quality eyewear at extremely competitive prices. The result? When, in 2012, they opened their first boutique, Warby Parker was already a cultural symbol: just in the first three weeks over four thousand people crowded the store, with customers queuing on weekends. Or Bonobos, the New York based manswear eCommerce par excellence, one of the first online retailers that has also opened physical “guide shops”: these are stores where you can find a collection of samples of the items that are sold online and try them on. After each appointment, customers receive an email with the expressed fit and style preference, so that they can finalize the purchase online. This strategy does not just help companies to get close to clients, also, it enables them to keep their shops within a smaller size than any other retail store – as they won’t need storage space. This hybrid formula has thus enabled them to increase sales and halve marketing costs.

In Italy, a similar reality is that of the eCommerce start-up company Velasca, that sells Made in Italy quality shoes at affordable prices. Velasca has recently opened a store in Milan and a temporary shop in Monaco, and is aiming at starting other twelve stores: in London, Paris, Rome, Turin, probably in New York and Sweden, Norway, Denmark and Germany.

In short, the web is definitely a crossing point for traditional brands and the starting point for young players, which, however, have now well understood that a visual and tactile shopping experience boosts sales and, more importantly, is an essential part of a well-rounded brand experience.