The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
This article first appeared in The State of Fashion: Technology, an in-depth report co-published by BoF and McKinsey & Company.
It’s no secret that fashion brands need to make highly personalised customer experience a cornerstone of their digital businesses. Their customers expect nothing less. Consumers have had their personalisation expectations redefined by the likes of Netflix, Spotify and Amazon. Shoppers expect brands to provide them with product choices and experiences that are tailored to their individual preferences. Indeed, 71 percent of global consumers want companies to deliver personalised communications and products, and 76 percent are unhappy when this is not offered.
Not so long ago, a personalised experience in fashion was something only very high-end, luxury shoppers could receive. Luxury boutique associates would lavish attention on key customers, manually recording an individual’s personal tastes and shopping habits in notebook after notebook to help them tailor their service. Building a long-lasting rapport with these shoppers was an exclusive, elaborate, not to mention inefficient, exercise.
Fast forward to today and brands are facing a convergence of factors that make personalisation a priority. Declining brand loyalty among customers and increased competition for attention from social media platforms, along with tightening regulations and moves by Apple and Google to modify access to third-party data, are all impacting the ability of brands to connect with customers online. Now more than ever, personalisation can hold the key for brands to capture market share.
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Shoppers expect brands to provide them with product choices and experiences that are tailored to their individual preferences.
That said, the fashion industry today generally confines personalisation to marketing recommendations for customer sub-segments, based on past purchases or online browsing history, held back by talent and technology constraints. There’s scope to go further. For the first time, businesses have tools that enable them to work with all types of data across channels in real time.
This is evident in e-commerce, where platforms powered by cloud-based technologies could run AI or machine learning algorithms to accelerate the processing and analysis of Big Data on customer behaviour. The result of these analytical capabilities would mean brands are equipped to provide hyper-personalised, one-to-one experiences — similar to those of the sales associate in an exclusive boutique, but available to customers across all fashion segments, from high street to luxury.
Offering hyper personalisation will require companies to reimagine how e-commerce operates. Search-based shopping is likely to shift to the individualised discovery of products and styles offered in the right size and fit. All customers will have a curated experience on their own versions of brand websites and marketplaces, from landing page to payment, akin to their experience on social media feeds. With this, companies will use personalisation technology to build experiences that drive customer engagement and, ultimately, loyalty.
Fashion retailer Zalando has taken steps towards this vision. It uses data analytics to offer its customers millions of tailored “Zalando interfaces.” By incorporating preferences into its algorithm, product displays are automatically tailored to each customer, from size to their favourite brands. The retailer is also exploring 3D body scanning technology to enhance size and fit selections.
Another company embracing this opportunity is The Yes. The fashion marketplace has built an extensive product taxonomy while also deploying machine learning and computer vision to synthesise hundreds of data points for each product. The algorithm then translates shopper preferences into a personalised exploration feed.
Meanwhile, styling service Stitch Fix tailors products to customers’ tastes and needs and uses a discovery tool called “style shuffle” to help users indicate designers they like. Fast-fashion player Shein offers each customer a scrollable feed of products powered by a real-time recommendation algorithm informed by myriad data points across social media and other channels.
Offering hyper personalisation will require companies to reimagine the way that fashion e-commerce operates across platforms — a potentially complex, fast-evolving challenge.
Looking ahead in the luxury segment, hyper personalisation is set to also play out in physical stores. Store associates can leverage first-party data to provide customers with a unique experience no matter which store they enter, taking in-store clienteling to the next level. What’s more, as technologies advance, it is feasible that brands will be able to create digital wardrobes for each customer along with personalised styling recommendations.
Offering hyper personalisation will require companies to reimagine the way that fashion e-commerce operates across platforms — a potentially complex, fast-evolving challenge that can overwhelm brands. This can be managed by:
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Accelerating first-party data collection
Creating a 360-degree customer view
Aligning the ‘human touch’ and AI
Scaling personalisation solutions
A priority for executives should be to establish hyper personalisation as a core competency. Brands will need to invest strategically across all their data and analytics activations, from collection to cross-channel implementation. In many cases, this will mean setting up a dedicated cross-functional team, comprising product managers, marketing domain experts, software engineers and data scientists. Brands that set themselves up to win will hone their ability to deliver intelligent, targeted marketing and e-commerce solutions for every customer.
The special edition of The State of Fashion report by The Business of Fashion and McKinsey & Company explores the great tech acceleration gripping the industry. Download the full report to understand the key imperatives that are spurring top brands and retailers to ramp up investments in technologies from AI to blockchain, to both address pain points and boost their competitive edge.
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