The digitization of retail has deeply changed shopping experience, especially for what concerns the apparel business. The consequence is that now the store is everywhere: in the shopper’s pocket, in his house and office or at the mall. With more and more sales shifting online each year, most fashion retailers are facing one of the biggest challenge of the new millennium: how do they satisfy consumers’ expectations of a seamless shopping experience? This work will try to answer to this question. At first it will be analyzed, both qualitative (with a survey) and quantitative (with results analysis), how consumers have changed the way they shop, how they make purchasing decisions and what they expect from fashion retailers. Shoppers are becoming more indifferent about which medium they use to make a purchase. When they purchase online, for example, they expect their orders to be processed straight away, and be shipped to their home as soon as possible, or, if they are shopping in a store, they expect to easily and quickly check for promotions or lower prices in a kiosk, without having to ask to a store employee. All it matters is to have the right product at the right time in the right place. As a consequence, I’m going to investigate best practices and how fashion retailers must find new ways to meet consumers demand regardless of the channel in order to boost sales, by implementing a cross-channel offering, one in which the consumer can move between channels without any resistance.
1. UNIVERSITÀ COMMERCIALE LUIGI BOCCONI
2012/2013
HARMONIZATION OF THE DIGITAL AND
PHYSICAL SELLING ENVIRONMENTS:
CROSS CHANNEL STRATEGIES IN
FASHION RETAILING.
Dissertation by: FEDERICO NARDINI
University Number: 1343623
Supervisor: SILVIA VIANELLO
MSc IN ECONOMICS FOR ART, CULTURE, MEDIA AND ENTERTAINMENT
2. LITERATURE REVIEW
WHAT IS CROSS CHANNEL RETAILING?
MULTI-CHANNEL
RETAILING
CROSS-CHANNEL
RETAILING
OMNI-CHANNEL
RETAILING
Ipsum
Consumers can shop across different channels
which function separately from one another,
operating in technological and operational silos
fashion
retailers are 4th
in terms of
cross channel
capabilities
Consumers can shop across channels and
perceive these channels as part of the same
brand. The Channels are integrated oneanother and the customer experience is
harmonized through them
Consumer does not perceive channels at all,
simply a brand. All channels are served by
common set of technology services
Apparel
benefited the
most from
cross channel
capabilities
3. LITERATURE REVIEW
VALUE OF THE CROSS CHANNEL SHOPPERS
informed
connected
multi-channel
user
expect the brand to
know his needs
moves seamlessly
through channels
brand loyal
Cross channel shoppers buy more often, both in terms of numbers of item purchased and both in terms
of spending. They are more valuable to fashion retailers than other kind of shoppers
4. EXPERIMENTAL ANALYSIS
STUDY OBJECTIVE
Understand how cross channel strategies will develop unique advantages to fashion retailers,
understanding which cross-channel elements can influence apparel’s sales
THE APPLICATION FIELD OF THE ANALYSIS IS FASHION RETAILING
WHY CROSS CHANNEL
IN FASHION RETAILING?
It’s a hot topic that positively
influence sales, loyalty and
brand awareness.
It helps to create a dialogue and
a deeper relationship with the
consumer, and allows to be
flexible to customers’ changing
preferences and needs.
According to the literature
review fashion retailers benefit
the most from cross channel
strategies, even if they are still
behind in terms of
implementation of cross
channel capabilities.
5. EXPERIMENTAL ANALYSIS
RESEARCH QUESTIONS AND METHODOLOGY
WHICH ELEMENTS OF CROSS CHANNEL RETAILING HAVE POSITIVE IMPACT ON APPAREL’S SALES?
Integrated marketing?
Click&Collect&Return?
Advanced technology?
WHICH TYPES OF CROSS CHANNEL SHOPPERS EXIST IN FASHION RETAILING?
METHODOLOGY
Preliminary Analysis
qualitative interviews in
order to identify cross
channel elements in
fashion retailing
Qualitative Analysis
Online and offline
survey, in order to
understand fashion
shoppers’ buying
behavior
Quantitative Analysis
Multiple regression
analysis in order to
examine the
hypothesized
relationships
Experiments
Cluster analysis in order
to classify respondents
into homogenous
fashion shoppers’
groups
6. EXPERIMENTAL ANALYSIS
REGRESSION RESULTS
Of the twenty hypotheses, five support positive relationships between cross channel elements and increase of sales, while three
support negative relationships.
CLICK & COLLECT & RETURN
Buy online, same day pick up in store
Buy anywhere, deliver home
Buy online, return in store
Buy online, return via express mail
Buy in a country, return in another
Buy and free delivery
Buy and free return
Buy through mobile
Buy through social media
INTEGRATED MARKETING
Targeted recommendations and
promotions online
Redemptions of coupon and offers
both online and offline
Personalized e-mails based on one’s
interests and tastes
Targeted advertising on search
engines
Presence of the fashion brand on
multiple social media
ADVANCED TECHNOLOGY
Updated and always accessible
customer’s dataset
Understanding of customers’
previous purchases (both online and
offline)
In store technologies (kiosks, tablets,
magic mirrors, etc.)
Payment option through mobile
Animated and digital shop windows
Mobile friendly websites
Dependent variable: “Have you spent more in clothes since you started shopping across channels?”
7. EXPERIMENTAL ANALYSIS
FASHION SHOPPERS – CLUSTER RESULTS
"I come into the store because it is located
in the mall near my workplace/home»
"I use the web to gain information on the
clothes, but then I want to touch and try
the clothes I have chosen"
"I enter the store where it happens, I look
at the prices and compare them with my
smart-phone: I buy where it costs less, on
the internet or through my mobile”
56% of respondents
24% of respondents
20% of respondents
Ipsum
Research and buy in store
Touch and try the items and check what else the
retailers has in store
Follows the brand online, but doesn’t use mobile
apps or in store technologies
Gain information, compare products and prices
online , but prefer to buy in a physical stores
Research online or in store, but buys online, or
through mobile, tablet and social media
At least 2 channel before the final purchase
More than 2 channels before the final purchase
Sensitive to promotions, offers and to targeted
advertising
Scan barcodes, mobile apps and in-store
technologies
The more we understand the customers, their buying behavior, and their interests and needs the more
they can be targeted with advertising, promotions, cross-sells and up-sells
9. MANAGERIAL CONCLUSIONS
MANAGERIAL IMPLICATIONS – HARMONIZED CHANNELS
7% of apparel
retailing is
done online or
via mobile
Online and physical channels will grow in parallel
Digital channels will
cannibalize the physical
channels?
IN STORE TECHNOLOGIES
Thanks to cross channel elements, the brand
loyalty to a specific retailer is going to
increase, and for this also the spending with
their favorite fashion retailer will.
In 2015 it is
expected to
grow to 16%
Consumers are not just shifting the buying process to another channel, but they are actually spending
more online with their favorite retailers, the one which can best meet his needs and expectations.
10. MANAGERIAL CONCLUSIONS
75% of
respondents
research
online before
buying in a
offline store
STORE AS SHOWROOM
Showroom which drives
revenues across all channels
(online, in store, mobile,
etc…) and augment the
brand experience.
IN STORE TECHNOLOGIES
CONNECTED FITTING
ROOMS
In store technologies as a
support for the connected
costumer, in order to
entertain and meet customer
expectations
THREATS
80% of
respondents
prefer to buy
in a physical
store
BENEFITS
MANAGERIAL IMPLICATIONS – THE CONNECTED STORE
Bigger range of products and
collections (different sizes,
colors, etc…)
Elimination of stock problems
The consumer can’t have the product
immediately
SOLUTION: provide appealing delivery
proposition, and click and collect options
Tablets
Virtual shelves
Kiosks
Animated shop windows
Magic Mirrors
Connected Fitting Rooms
Virtual Catwalks
Invisible Technology
The perfect solution is to associate the sales to a physical shop rather than to a digital channel: this means
that in fashion retailing, all the online channels must converge into the physical one.
11. MANAGERIAL CONCLUSIONS
MANAGERIAL IMPLICATIONS – FUTURE TRENDS
Mobile
Newsletter
M-commerce
Personalized e-mails
Loyalty cards/coupons
Integration with socials
Credit-card
Optimize experience
Mobile app/QR codes
Re-targeting
Social
Display adv
F/T/G/P - commerce
Focus on keywords
CRM/Customer service
in line interests & needs
Find/share information
Attract target audience
Targeted advertising
Re-target
Digital channels let fashion retailers engage with shoppers in new ways, starting a dialogue that opens
the doors to more sales, a greater loyalty and more business opportunities.
12. MANAGERIAL CONCLUSIONS
ADVICES FOR FASHION RETAILERS
BE
CUSTOMER
ORIENTED
CUSTOMIZE
CROSS-CHANNEL
STRATEGIES
SHOPPERS ARE READY, AND COMPANIES?