Effects of Online Shopping on the Fashion Industry

Abstract

Online shopping and its impact on the evolution fashion was examined, in the context of the cultural shift in consumers. Right now is considered the most crucial time where the consumers have the most desire to shop whenever and wherever. Millennials are also given the credit for causing the shift in traditional in-store shopping habits to now online shopping. Within the fashion/retail industry, there has been a disruption in the traditional retail process because of the advancement of technology. Hence, the use of the term, “fast fashion”, because of the establishment of E-commerce, E-tailers, and obviously online shopping. The high street/runaway brands have become more broad and accessible, therefore, causing consumers to prefer a more catered shopping experience. As well as a more affordable retail shopping experience. Together, all of these findings suggest that the need for inclusivity, personalization, and affordability is necessary for the consumers’ overall experience.

Keywords: e-commerce, e-tailer, online shopping, inclusivity, personalization, affordability

My decision in choosing this topic stemmed from my interest in how my shopping habits have evolved or have been affected by this major shift in retail consumption. However, I did want to focus on how the fashion industry has adapted to this change. Consumers went from physically purchasing clothing in department stores, to shopping in catalogs, and now online. With the uprising of “Fast Fashion” and the advancement of technology, the fashion industry had to accelerate its production of retail. The fashion industry also had to stray away from its exclusivity to become more accessible by the masses. Therefore, I feel as though with this industry has inevitably fallen into OnDemand industry. The purpose of my paper is to demonstrate how the creation of on E-tailer/online shopping started the cultural shift in the fashion industry from traditional to digital stores, In the past high-end fashion brands were considered a luxury. In other words, exclusive to the wealthy. With brands only having physical stores in major cities, some fashion brands were a rare luxury for one to be able to purchase. However, since the technological boom in retail, luxury brands such as Chanel and Dior have been hesitant with opening an online store because they want to stick with the exclusivity of their brand. Recently, the results have shown that high-end fashion brands becoming more accessible was beneficial for them and the consumer. It was reported that online luxury sales increased by 24% in 2017 (e.g Bain & Company 2017; Danzieger 2018). In an international survey of well-off consumers with annual incomes of $150,000 per year or equal to, “it was found that 21% of those surveyed prefer to shop luxury online, and another 27% had no preference between online or in-store shopping”, (e.g. Sousa, 2018; Danzieger, 2018). Which means a broader market for the company and a variety of luxury items consumers can pick from now. Online shopping has become one of the fastest growing sectors in the economy, with an average 19% growth per year (Silenok 2011). Customers are shopping and seeking items that could be purchased digitally or locally. The relativity of these brands has become a key factor for consumers and their decision to purchase. Product availability is usually a factor that is a matter of importance to the consumer-centric experience. Consumers rather have options on how they want to purchase and receive clothing, accessories, and shoes. The fashion industry had also noticed that returning customers, especially those online want luxury brands to provide free delivery and returns on retail items. Therefore, luxury brands have started or at least tried to implement these in order to ensure consumer satisfaction. Personalized shopping has also become a factor in the shopper’s experience. Personalization is more evident in online stores than in-store. For an example, Dia & Co is a plus-size clothing brand that does subscriptions. They send boxes filled with clothes and accessories based on their consumers’ size, favorite colors and style preferences. Customers are allowed the keep the items they want and to pay online and then return the ones they do not. Dia & Co then ask for feedback on why the consumer did not want those specific items (i.e wrong size, not fond of the color and style). This is just one way they have become more personalized. Another way is that companies will go through social media influences that market or target demographics that they want to purchase their clothing. They have started to find out what their consumers’ styles are, what trends they follow and who they want to see wear the same type of clothing. Doing all of this gives the consumers a more one on one experience and helps retailers gain customer loyalty. Also, helping brands gain more traction to their sites. According to Nosto (2018), it has shown that 43% of consumer purchases are influenced by the companies personalized recommendations and promotions. In addition, 75% of consumers prefer brands to personalize messaging, offers, and experiences. Brands in the fashion industry took this into an account when it came to the in-store versus the online shopping experience. However, with the demand increasing so rapidly online, companies started to morph into e-tailer companies (which are clothing companies that are selling items online through e-commerce but also still through physical stores), in order to not become too one-sided in one shopping technique and to give their consumers more ways to buy. Recently, Nosto also gathered data that proves, “94% of companies see personalization as critical to current and future success” (e.g. Orendorff 2018). Furthermore, the fashion industry is starting to incorporate personalization into their business models. Doing so, fashion brands are starting to identify and increase the people who are more likely to become a returning customer. Secondly, to reiterate their goal of an increase in customer lifetime value brands are using personalization (i.e creating discounts, promotions, and subscriptions) to keep up with the online demand and technological advancements. Virtual closets and assistants have now come on along with the personalization aspect of the online shopping experience. Fashion brands such as 2020Ave, have where consumers can pick a topic and stand in front of a camera and the clothing item appears on their body digitally. This gives consumers the in-store experience right in the comfort of their homes.

Fashion brands are starting to become mostly and some strictly online more than in store because it is more expensive to run a physical establishment. Companies are spending less by just having production warehouses, managing a site and sales. Therefore, retailers then provide cheaper products or deals with their customers because of the reduced amount of operational spending on their end. This means more discounts and consumers can spend less for more. Gramigina (2017) explains, “In the first quarter of 2014, more than 75 percent of shoppers over age 15 bought something online.” To summarize a majority of consumer shopping online for clothes is typically people between 15-early 30s. On top of that demographic being so tech-savvy then also have to take into account that they cannot have ridiculous prices because of the age groups buying from them. However, the more tech-savvy a brand and/or company is the more Millennials, are going use it. Consumers, rather have an easier online-to-offline retail experience.

Fashion e-tailer stores have been catering to their consumers based on seasons and even during holidays. Melton (2018) stated that “According to a February 2018 survey of 2,535 U.S. consumers by PYMNTS.com…26.9% prefer to shop and buy only online because of discounts”, this stems from the fact that established retailers are more likely trying to satisfy their longterm customers. Companies such as Forever21, Fashion Nova and Charlotte Russe are just a few fast fashion brands that participate in creating “online only” sales for their consumers. In a sense, these companies are promoting more people to interact with the brand online. According to Antonow (2018), “More likely than not, millennials are using their smartphones to compare prices to other retailers while they’re browsing in-store and will put the product back on the shelf if they find a better deal elsewhere. Consumers of that age range a more likely to do research on fashion retail items before purchasing. Also, consumers a more likely to purchase in store if they are given a coupon that works both online and in-store. Brands have also analyzed their markets and realized how much consumers purchase at once. PrettyLittleThing, an online store started to create discounts and other promotions in order to stick to needs of their customers which so happen to be teens-late 20s. Affordability is one of the main factors of the consumer-centric experience that makes or breaks a consumer’s online shopping experience. People do not want to spend that much online especially if they are not recieving their packages within 2 days. Many companies such as Fashion Nova, learned that very quickly. The fashion industry has been through own trial and error while trying to adapt to this change in the retail culture.

Conclusion

To summarize the fashion industry once originally a was an exclusive industry. The fashion industry was headed by the top high-end brands such as Gucci, Versace, and Christian Dior, but the rise in annual incomes, technological advancements, the demand for accessibility; these brands had to make some adaptations. Shopping was once a more physical thing to do but has now morphed into something more convenient for the everyday person. Department stores like Macys and JcPennys were not personalized enough nor did they house higher end brands as mentioned perviously. Something had to change with the rapid increase in demand and most of the fashion brands are playing catch-up. Brands during the early 2000s typically just had in-store exclusives and discounts to slowly making its way to catalogs consumers could order from in the mail to being stagnant. This left room for companies such as Forever 21, 2020Ave, and Dia & Co to add features such as subscriptions, online-only promotions, and virtual assistance due to recent technological advancements. These advancements has driven the fashion retail industry in a mostly positive direction for retailers and consumers. Besides, the customer’s shopping experience is the most important aspect to a brand in order to progress and maintain customers lifetime loyalty. With the typical shopper being so tech-savvy, brands start to branch out and become more an e-tailer. With the creation of virtual closets, the input of the consumers’ preferences themselves equals more purchases and more creativity from the brands in order to please customers. This virtual engagement through online stores opens doors for more possibilities for a more efficient, accessible and comfortable shopping experience. And consumers want more. All in all, the fashion industry had to make some major changes to their typical way of production. The exclusivity had to come to a minimum because of the rise of the annual income of the masses. The accessibility to the higher end fashion lines was necessary for those brands to stay in business. Companies migrated into becoming E-tailer The consumer experience has altered a bit. We have gone from being consumers who physically go to stores, search for items we may want or need from our favorite stores to catalogs in the mail. In my opinion, the catalog purchasing process was a catalyst to the at-home to the online way of retail shopping. People rather be able to purchase clothing wherever, whenever and from whoever. Years from now, the fashion industry will be much more of a mass-selling process, and rapid than something so exclusive. The fashion industry is constantly trying to keep up with the trends but are they going to be able to keep up with a rapid progression of technology and the portability of everything? The fashion industry has taking mobile and social media to their advantage by promoting on these platforms. This helps brands and companies to stay relevant and to appeal to the millennial shoppers (i.e the ones who are making the most clothing purchases right now). Fast Fashion has altered the fashion industry for good. Fast fashion has turned the fashion industry into a sector of the OnDemand industry and there is no going back. Online shopping has positively benefitted the producers and creators, as well as the consumers in this industry. The fashion industry is forever going to evolve from its traditional roots in order to stay with the current technologically advanced world we are becoming.

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