Technology is transforming the way we do business.
Retailers are not immune to this trend and are increasingly looking to technology to connect with customers. At the same time, in an increasingly digitised and convenience-focused world, businesses need to maintain a personal touch to set themselves apart.
For many small fashion retailers, the key to their success is the ability to provide a more personal experience, while balancing the benefits of new technologies.
Take Jane Ramsay, owner of her own luxury fashion line, who uses FedEx for shipping. Despite the majority of her sales occurring in-store, recently she has experienced a significant rise in online transactions. To capitalize on this growth, in the last year Ramsay rebuilt her website to be more mobile friendly as this is fast becoming one of the most popular channels for customers to browse and purchase her styles.
As the world’s leading designers descend on Mercedes-Benz Fashion Week in Sydney (May 15 – May 20, 2016), one can be forgiven for thinking that high fashion continues to be the realm of global retailers and luxury brands. In order for smaller retailers to compete, they need to substitute the glitz and glamour of fashion weeks for effective digital, mobile and social marketing strategies.
At FedEx, we have also noticed that fashion retailers are starting to embrace being ‘small’ as a strategy for success and growth. Increasingly easy-to-use technology has enabled smaller retailers to speak and deliver to their niche customer sets across all channels with the same voice as they would in a bricks and mortar store. So what is driving their success?
With e-commerce growth projected to double the retail industry average till at least 2017, half of all shoppers are discovering new products when searching with their smartphones, and 82 percent of smartphone owners are looking online for product information when shopping.
They’re highly personal
Technological advancements and the democratising power of the Internet have allowed retailers to scale up without sacrificing intimacy and personal service. As customers no longer think about retailers’ brands in a silo, neither does the small retailer. They analyse insights from website visitor traffic, social media interactions, and newsletter click-through rates to better understand their customers.
They look for ways to cultivate and engage a community
It is much more profitable to sell to loyal customers than to constantly look for new ones. A Bain study showed that just a five percent growth in customer retention could boost profitability by 75 percent.
Small retailers are starting to use this insight to build loyal online communities, which do the selling for them. No wonder a brief Google search on the words ‘e-commerce’ and ‘social media’ turns out 101 million results, with articles such as ‘12 Social Media Tactics to Drive Traffic to your E-commerce Site’ being the most visited. Another way is through loyalty programs, which 30 percent of independent retailers are planning to implement in 2016. This is on top of the quarter of independent retailers who already have a loyalty program in place.
They find the right support
Finally, one cannot ‘grow small’ without a reliable network of business partners, whether it’s like-minded companies to cross-sell services and expand their product offering, or other companies to provide operational support in areas where expertise is lacking.
One example of this is logistics. According to a recent FedEx study, about 70 percent of consumers surveyed listed shipping-related factors as the most influential in their decision to buy from online retailers in other markets*. That is why small retailers look to third-parties for their expertise and capabilities in potentially complex areas, such as the implementation of a policy that allows customers the option to return items purchased online to a physical store.
#fashion is a game changer
As global product availability is almost a non-issue these days, smart small retailers in the fashion and luxury sector need to constantly rethink their strategies, find ways to stand out, grow, and engage their customers without compromising the essence of their appeal. Ramsay says she finds this is an ongoing process and she enjoys communicating with her customers wherever they are in the world.
*“Seizing The Cross-Border Opportunity”, a commissioned study conducted by Forrester Consulting on behalf of FedEx, December 2014 (Page 9).
About the author
By Kim Garner, Managing Director, FedEx Express Australasia