What: Learning from the UK, where online penetration reached 75% in 2020 and is likely to climb to 85% over the coming period, according to a survey conducted by McKinsey.

Why is it important: While online will continue growing, customers’ highest priorities go to the basics of retailing: value for money, stock availability, efficient delivery proposition and reliable product information.

Online penetration

Some 90% of UK consumers under 34 yo have shopped for fashion online in the past year. And 64% of the over-65 yo say they are comfortable with online purchases. Across all age groups, the average online spend as a proportion of the total spend is 55 to 65%. Among the key fashion categories, athletic apparel and loungewear have proved most popular over the past year, reflecting the global trend toward athleisure. Accessories such as handbags and belts have also seen rising demand.

The new fundamentals

As fashion consumers become more accustomed to e-commerce, retailers must ramp up their capabilities with respect to four key pillars:

• Discovery. Customers want brands to stay in touch via interesting news and offers and provide timely and relevant online advertisements.
• Browsing. Features cited as important include appealing product content and relevant recommendations.
• Purchasing. Customer priorities are focused on value for money, accurate sizing, a selection of brands and products, and considerable discounts.
• Experience. Seamless delivery is a highly rated attribute, and customers value being able to return or exchange products easily. Loyalty programs are perceived positively.

Looking forward: Six vectors to stand out

In an era of digital disruption, retailers should remember that customers are not focused solely on innovation. Indeed, consumers continue to place high value on traditional qualities such as reliability, value, and excellent service. With that in mind, McKinsey sees six themes to aid retailers’ in executing their e-commerce strategy.

Reinforce the value-for-money proposition. Because online consumers find it easier to compare prices across fashion categories and brands, focus on finding the right price points and assuring customers that they are getting excellent value (although not necessarily the lowest prices).

Curate intelligently. Invest in cutting-edge segmentation techniques to ensure that your assortment will appeal to your target groups. Leverage advanced analytics, as well as internal and external data, to generate deep insights into customer priorities and behaviours.

Balance inventory and availability. Interrogate data to more effectively manage availability and visibility. Direct customers to where there is stock and redirect them when stock is unavailable. If something is not immediately available, let customers know and make contact when it is back in stock.

Stay connected. Forge ever-closer partnerships with your customers, leveraging omnichannel engagement, nudges, and fresh ideas. However, don’t be indiscriminate.

Design websites purposefully. Outstanding content goes a long way toward inspiring purchasing decisions. Prioritize great photography and sharp copy.

Get it right on the road. Logistics are a key element of e-commerce business models and a significant driver of costs. Put more emphasis on guaranteeing that deliveries are speedy, on time, and reliable.

Six vectors of success in online fashion