DRESS Melbourne

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Category: Market Research

“The last few years have been interesting times for online retailing in Australia. Just as there have been claims that there are rivers of gold to be made online, there have also been claims that there is no money to be made in this manner and that anyone who thinks differently is throwing money away.

There have been some interesting launches in the online retail space and certainly there is a lot of talk that major bricks and mortar retailers are on the verge of  entering the multi-channel world. Big W went live in May, The Good Guys also went online with a ‘pick up in store’ offer just last month and more are set to follow as we head into the Christmas season.

While this has been happening here in Australia, in the USA and the UK we are seeing the likes of Best Buy, Tescos, Walmart and many others reporting significant revenue through their online channel.

At a financial level there are two parts to the equation that need evaluating. These are the top line revenue that can be made and the costs associated in realising that revenue. The costs element varies significantly from business to business but can be established with a reasonable level of accuracy. The issue for online retail has been quantifying the top line opportunity. With very little local Australian data to reference, there has always been a question as to whether Australian consumers are in some way different to their overseas counterparts and the impact any differences might have on revenue.

That was until very recently.

Now two reports have given us some insight to the market that we haven’t seen before and the results may surprise you.

The first report was a presentation made by Patti Freeman Evans (VP, Research Director for Forrester) at Online Retailer in July. Freeman Evans reported that Australians are on average more likely to purchase online than Americans, and only slightly less than the British. And that isn’t all. Conversion rates in Australia are higher than the US, cart abandonment is lower and the average basket is higher.

I have to say that when I first saw this information it didn’t feel right. My experience when moving to Australia from the UK nearly 4 years ago was that I couldn’t get anything like the range of products I was used to purchasing online and that those I could get didn’t offer the savings I was used to seeing via the online channel. And I don’t feel things have shifted very far in the last 4 years. So where are these people spending all their money?

Until I read a report from Frost & Sullivan, I was concerned that Freeman Evans could have got things wrong. The Frost & Sullivan report – simply titled ‘Australian eCommerce Market 2010’ – made an interesting discovery: 40% of all online expenditure by Australians happens on overseas sites. In my view, the reason for this is that Australian retailers aren’t meeting the needs of Australian consumers. In their press release, Frost & Sullivan were more direct: “A key reason for the lag in local activity is the lack of online presence by many of the large retail chains and department stores.”

So, customers are exhibiting mature online purchasing behaviour (so mature that they are sourcing products internationally in large volumes), it is just that the local retailers aren’t servicing them.

Several estimates place the current Australian domestic online market at around $12 billion a year. That means that Australian consumers are spending approximately $20 billion a year online. The amount spent domestically online is increasing every year and is predicted to rise to  around $18 billion in 2014 (according to the Frost & Sullivan report). Compare that to June retail sales that saw a year on year fall of 0.7% and while it may not be rivers of gold, it would suggest to me a significant opportunity for a retailer to drive top line growth.

However, in a market where online revenue is increasing when the total market is relatively stagnant, the issue of channel cannibalisation rears its ugly head. For my thoughts on that you will have to read my next blog article. But for now, suffice to say the revenue opportunity for the online channel is certainly a very real one.

Of course top line growth does not necessarily equate to profit. Introducing an eCommerce channel into a retail business is much more than ‘opening up another store, just online’; it is truly business transformational. In a presentation at Online Retailer, Russell Harte, Head of Business Development & Delivery for boots.com, talked about how they are only just getting the Boots online model right after 10 years of multi-channel retailing. Learn from these companies and invest smartly. Leverage the global understanding that has been developed in this space to avoid the costly mistakes others have made. Because heading down the right path now could well lead to those rivers of gold, while going down the wrong one could be a costly exercise.”

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Social Medias impact from http://socialnowpr.wordpress.com

 

“Fashion has often been thought of as an esoteric industry full of anorexic beauties, fabulous designers, and editors with more strappy sandals than common sense.  However, the industry has been undergoing a makeover of sorts as a result of our highly digitalized age.  Specifically, the vast majority of designers stream their runway shows to the major social networks, thus allowing us plebeians to get in on the action.  This immediacy means the masses are viewing, judging, and interpreting trends in a matter of minutes instead of a few months.  This has led to the rise of the fashion blogger, as well as discount chains capable of churning out near replicas of this season’s wrap dress in mere days.  In fact, it’s worth examining how social media has influenced fashion and just who benefits from the explosion of Twitter, Facebook, FourSquare, Tumblr, and Google+.

First and foremost, girls and boys devoted to fashion have existed since the industry began, but they were often viewed with ill-disguised amusement. After all, an appreciation of fashion is oft considered indicative of intellectual decay, but the current generation has propelled willowy bloggers to astronomical heights of popularity.  The creators of blogs suddenly have access to the privileged world of fashion; in fact, these bloggers enjoy the same privileges that used to be reserved exclusively for fashion editors.  Consequently, their blogs become saturated with specific brands and websites because corporations are now advertising their wares on these style making sites. While this is undoubtedly problematic, the fact remains that fashion bloggers offer a new eye with which to observe trends through.

However, another segment of the population benefits from fashion’s high accessibility and visibility: discount giants.  Fashion retailers such as Forever 21 and Charlotte Russe, along with department store behemoths, including Macy’s, often “borrow” heavily from the runway.  Designers are quick to call foul on this practice, but companies accused of cheating deny that they’re doing anything wrong.  Furthermore, this position is supported by customers who buy the couture-inspired dresses and coats en masse.

Ultimately, social media’s impact on the fashion industry is similar to what social media has done for the world: it opens it up, allows us to interact with others regardless of distance, and gives us a sneak peek at the other side.”

 

http://socialnowpr.wordpress.com

Online 1: Store: 0

I saw this article in the Age today, literally just after i got home from purchasing a coat from my local shopping center. It further highlights how the retail and fashion world is changing. Even though I did not buy my new coat offline I did search ASOS prior to making my purchase however this purchase was considered over about two weeks, and I waited until it came onto special. Furthermore it highlights they way we shop can be fashionable not just what we buy.


Read more @ http://www.theage.com.au/lifestyle/fashion/winter-shopping-spree-a-hit-online-and-offshore-20120322-1vmzr.html

The New Consumer

I visited the New Consumer fashion industry forum as part of the Loral Melbourne Fashion festival to gain an up to date insight into the modern consumer. There were a number of key speakers who each had differing views on the area of the new consumer. Below are a number of key points, images and a bio on each of the speakers.

 Adam Ferrier 

http://www.nakedcommunications.com.au/

Adam Ferrier is a consumer psychologist and founding partner of Naked Communications one of Australia’s most awarded agencies.  He features on the ABC radio, The Gruen Transfer and writes for The Australian.

Key points include:

  • People are the same technology is changing
  • To succeed in business is to change behaviour. People will only change behaviour if there is motivation and ease.
  • Advertising is desire and permission. For example the creamy footage of an ice cream is the design and the 98% fat free is the permission
  • All things must be easy for the consumer otherwise they will not bother
  • To change a behaviour you need to frame and target the exact behaviour you want to change
  • Actions, feeling thought method of behaviour change inefficient as there is a us and them mentality
  • Awareness doesn’t lead to action – KONY 2012
  • Benjamin Franklin effect, do gain a relationship with the consumer get them to do you a favour. The act of them doing you a favour is them investing something in your brand. They will also have a bond.
  • Example Art series hotel “Steal Bansky” & Witchery Man campaign
  • Switch also an example. Has friends of the company who promote and advertise through blogging which in return they ‘friends’ get 25% off all products all the time

Lorna Hall 

http://www.wgsn.com

Lorna is a senior retail analyst at WGSN, a global trend analysis company that monitors cultural indicators, consumer moods,behaviors and attitudes. 

  • There is a changed consumer. The retailer is at the back of the pack with the consumer “at the front holding an ipad.
  • Moving digital more so than ever before. Apple made a hybrid product. Currently 19% of Adults have a tablet device will be 30% at the years end.
  • “Etailing”
  • Consumers are researched up. Women are shopping like men. They do their research before then even enter a store to purchase.
  • Consumers ‘Edit’ then want the retailer to further ‘edit’ for us
  • Pinterest is social media ‘editing’ where by the consumer see what their network thinks before making a purchase
  • Inventory Magazine , ‘edits’ for the customer
  • Consumers are sick of the clutter – must edit down. Can be seen all over Europe (except ASOS) however their magazine is a form of editing down
  • H&M current campaign is 10 key items = example of editing down
  • Australians are saving more, they are making only considered purchases. The 10 key items is a way of validating the purchase by saying these items are versatile and you will get your moneys worth
  • Zara – no more 4 way racks again a example of editing down
  • Think before purchase
  • Fashion Diet Sanne Jansens
  • New Balance 30 year celebration
  • Importance of provenance
  • Honest By (As seen already on my blog)
  • “Retail Nomads” changing designations, any place any time, what is the purpose of a store? The rise of the pop up shop over the last 10 years
  • Example – Tesco Home plus retail store on a wall in a subway
  • Products now come to you
  • Magazines buy off the pag
  • Business loung shopping facilities , no products just couches and Ipad in London
  • Stores will become less permanent, we will see a move to flagship and pop up opportunity. The locations and way these store will run will be crucial

Howard Parry-Husband

Howard Parry-Husband works in marketing research specializing in brand positioning and is a founder of Pollinate and Soup, expert communication companies. Pollinate works to create societal change to influence peoples behavioral change. Howard is dedicated to developing successful solutions for society. 

  • If you asked the average consumer what’s wring with Australian fashion retail they would most likely say nothing
  • Fashion is differentiation / imitation
  • 60% prefer to buy cheap items that are of poor quality
  • They type of consumption has not made consumers happy. There is a level of guilt about where the clothes came from whilst also the financial burden of keeping up with the trends
  • Sustainable doesnt work well in marketing
  • The more you understand about sustainabilty the less you buy green
  • People are tied of cheap choice, unsatisfying
  • Legacy items don’t exist anymore
  • Brands need to engage users through values

A favorite quote from the day:

People don’t change. Society does.

Cake fashion?

I baked a marble cake over the weekend and was surprised about the response to this modest marble cake, flocked with extra fluffy frosting. Of all the images I’ve posted of travels around the world, my social life or other goings on and i receive the most ‘likes’ of a picture of a cake. Proof fashion can really be ‘a piece of cake’.

Fashion is?

Fashion is?

                                                                                                                Fashion is being unique.

Fashion is designer.

Fashion is handmade.

Fashion is a favourite brand.

Fashion is subjective.

Exciting news!

I’m running my own Camberwell Market stall in May. Hopefully I will gain some experience into one of Melbourne’s most ‘fashionable’ markets. It will be a fantastic opportunity to talk to Camberwell market shoppers and gain some insight into this segment of consumers. Are they sustainable,simply love vintage fashion or do they love a bargain?

 

Shoes?

Today I hunted around building 88, home to Industrial and Landscape designers. I asked “Whats your most fashionable item?”, expecting to see Iphones and fancy gadgets however shoes came in a clear winner with only one laptop being recorded. When asked why, individuals eluded to the fact that footwear is one of the few components that can be completely individual and it not overly restricted in terms societal expectation. Furthermore with the rise of fast fashion  shoes can often be a cheap means of adding depth or personality to an outfit while accentuating the individuals personality.

Whats your most ‘fashionable’?

I’m looking to find what products people would consider to be their most fashionable and why? It could be a favorite item of clothing, a product such as an Phone or even taking a gap year to travel around the globe.

Please comment below and explain.