As the calendar turns to a new year, what can we expect to see across the fashion landscape over the next 12 months? Tamsin McLaren from the Bath Retail Lab discusses the 8 Rs affecting consumers and businesses alike.
Recreation
As e-commerce grows, successful retailers with physical stores will continue to question their role. How can they adapt and survive by providing their customers with fun, unique and memorable experiences? Social media-friendly environments alongside excellent service are key, such as selfie spots and customisation.
The department store sector is especially vulnerable in the face of stiff competition from online retailers when it comes to pricing. These stores continue to be at risk if they do not adapt to provide customers with compelling experiences and reasons to visit.
Returns
Customers have become increasingly reliant on purchasing the same item in multiple sizes, known as ‘bracketing’, then returning excess items free of charge, which has created significant profitability and waste issues for the industry. Returns rates can be anything from 10% to a whopping 40%, and to counter this in 2023 more retailers charged, or increased their charges, for returns.
Free returns enabled bracketing and these increased charges alongside other supply chain innovations and legislation such as digital product passports can help to mitigate returns at point of sale.
Repair and Resale
Consumers are becoming more educated about slow fashion: buying better, taking care, repairing, and reselling as opposed to adding to landfill. Extending product life is critical to this growing movement, and brands and customers alike are getting onboard.
Outdoor clothing brand Patagonia paired with social impact company Makers Unite to launch a textile repair centre in London towards the end of 2023. The facility offers high-quality repairs, while also providing employment opportunities for local residents, such as refugees, who may struggle to find work.
The global second-hand apparel market is one of the fastest growing categories – growing three times faster than the global apparel market overall – and is set to nearly double by 2027, reaching $350bn.
Recalibration
Business conditions for the high street continue to be challenging, as small businesses and independent retailers fight for survival. Many independent retailers and smaller chains were struggling even before the Covid-19 pandemic, so finding new ways to stay profitable, keep existing customers and attract new ones will require creative strategizing and marketing.
Joining buying groups or marketplace platforms may appeal to retailers and brands as cost-effective and efficient ways to reach their target audience, at the same time providing customers with a greater choice of smaller, upcoming brands – strength in numbers.
Repurposing
In the wake of the UK Government’s 2020 ‘change of use’ bill, it is easier for businesses to convert their properties between commercial and service uses. As a result, retailers who own physical premises in the UK will continue to develop their plans and make changes based on the evolving real-estate landscape.
Retailers will also be considering alternatives to traditional formats, such as ‘inventory-less’ and smaller format stores that focus on customers’ varied lifestyles. This will enable products and services to be tested at postcode level, market testing the best solutions locally.
Retail media and AI
Digital retail media advertising spend will continue to grow rapidly, with retail media networks (RMNs) becoming increasingly sophisticated and helping to drive retailer profitability. Retailers have been using their valuable customer data for quite some time through loyalty cards and direct mailing campaigns, and in 2024 and beyond more retailers will be making this data available to brands.
We can expect to see even more branded ads across different environments, outside of stores themselves: for example on Apple TV, Xbox and PlayStation. But will shoppers be targeted with relevant ads? Investment in Artificial Intelligence in retail is also set to grow, helping businesses improve their instore and online shopping experience through personalised recommendations. So expect to see even more fashion advertisements across multiple environments!
Rental
Our views on owning fashion are changing, led by Gen-Z shoppers who – with limited funds and space – are flipping their wardrobes by renting fashion while growing their social media followings. Customers can either rent from each other via peer-to-peer apps such as HURR, or directly from brands. This trend has been enabled by technology, making wardrobe switching convenient for customers and cost-effective for brands with garments being worn up to 20 times, instead of worn once or twice and discarded.
In 2024 there are even more opportunities for customers to be better informed, shop differently, make more considered choices, and enjoy fashion retail!
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