Closing the Customer Experience Gap: 5 Lessons for the Fashion & Retail Industry

Digital Disruption

Key Insights

  • The fashion industry is under enormous pressure to provide better shopping experiences, requiring a thorough evaluation of strategies and models to improve customer journeys efficiently and cost-effectively
  • Data and immersive technologies can pave the way for more interactive experiences and help brands pivot their business strategies
  • Closing the customer experience gap is an ongoing process, one which every business must take into account for long-term success

The consumer psyche is changing rapidly. 

When it comes to improving customer experience, tech companies have taken the lead, raising customer expectations of speed and convenience and streamlining the customer decision journey. 

But retail customer experience lags behind. Across the industry, the process is far more fragmented. 

Customers often struggle to shop based on their ideas, desire, or inspirations. 

A survey by Qualtrics highlights that while 75% of consumers have high expectations for digital shopping experiences, only 63% believe that brands are delivering on it. 

Solving the many CX challenges requires brands to digitize and reassess how it would foster better customer relationships. 

What is Digitization in Fashion? 

Many experts feel digitization is primarily a social phenomenon, offering domains through which we can restructure our digital communications. 

Others take a more business-centric approach where digitization comes with the potential of changing the business model and providing new revenue and value-producing opportunities. 

In the case of retail customer experience, both these analogies are applicable. 

Digitization has opened up new ways for consumers to interact and engage with their favorite brands. It has also enabled brands to change their ways of retail execution to adapt to the new realities as well as new restrictions.

What are the Challenges in the Retail Fashion Market?

The global fashion industry continues to be the largest industry in the B2C e-commerce market with an estimated global size of just over $750 billion (as of 2020).

In order to succeed, it is incumbent for fashion retailers to close the customer experience gap by anticipating and delivering on customer preferences at every touchpoint. 

From addressing changing consumer preferences to mergers and acquisitions, there’s a lot in store for companies in the fashion and apparel industry to tackle as they move forward.

Below, we have highlighted the top 5 CX challenges for the fashion and retail segment.

1. Rise of D2C E-commerce

It is likely that consumers will continue shopping online in 2022 even with pandemic restrictions being eased and marketplaces reopening to normal capacity. 

For many fashion brands that have traditionally relied on their department store channel to reach out to customers, it means a change in strategy and a move towards a direct-to-consumer model. 

While e-commerce provided brands a pathway to better understand their customers’ preferences and uncover pain points, they would need to re-evaluate their sales channels and recalibrate their relationships with legacy brick-and-mortar stores.

2. Bringing in Social Values

A study by Euromonitor International highlights that more and more consumers expect brands to be purpose-driven. In simple terms, brands should support the “triple bottom line”- people, planet, and profits.

Leading a fashion company and providing a stellar retail customer experience in a post-pandemic world requires a broader mindset to create strategies that drive environmental, charitable, and other social causes. 

Closing the customer experience gap would be incomplete without organizations capitalizing on transparency of their socially conscious, environmental friendly, and ethical sourcing practices. 

3. Tapping On Immersive Tech

The pandemic pushed brands to engage and experiment with immersive technologies to provide customers with a physical experience they used to enjoy at stores, and in the process, close the CX gap. 

Virtual clothing, digital catwalks, and online showrooms came into play. 

Going forward, brands must maximize such opportunities. Digital technologies offer a quick route for apparel companies to create a collection and present it.

The digital fashion campaign by Selfridges (a UK-based chain of high-end department stores) is a prime example of how immersive tech can be employed to radically rethink the future of fashion and retail. 

The campaign explores the domain through the medium of digital art, created by 3D digital fashion designer, Cat Taylor. 

4. Boosting the Buying Experience

It’s a hypercompetitive market for any sector. 

Fashion companies will need to be creative in the way they offer their goods. With the D2C model becoming more dominant, it is incumbent for this industry to develop online shopping capabilities and use AR and VR in more ways. 

Additionally, brands must look at leveraging digital transformation solutions for processes such as delivery and returns for better speed and accuracy. 

Adding to their arsenal will be social media. 

Brands that don’t capitalize on it would be left behind in striking long-lasting customer relationships and building brand loyalty.

5. Overcoming the After Sales Barrier

A macro-challenge for fashion companies to address in order to enhance retail customer experience is the after-sales process. 

Organizations need to facilitate smooth exchange and return processes as well as institute open communication policies if they want to build better relationships with customers. 

This is where conversational commerce comes into play. While born with the primary objective of stimulating sales, it is not restricted to that role. 

How Do You Improve Customer Experience (CX) in Fashion and Retail?

Improving Customer Experience in Fashion & Retail

While the pandemic disrupted the industry, forcing sales to drop to zero in a span of months, there is a positive side to look forward to. 

The challenging period has also offered a learning curve to the sector to understand how to employ technology and maximize benefits from the minimum. 

We have listed five strategic steps that the industry should take to close the customer experience gap.

Step #1. Make Way for a Stronger Foundation

It is time to simplify processes and consolidate your core systems to improve customer experience and achieve success in today’s digital competitive marketplace.

Your first step is to eliminate data fragmentation and duplication to create efficiencies and deliver real-time information. 

Take a one-system approach by putting your back-end Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and order & inventory systems into one platform.

Step #2. Build Your Digital Platform

Now that your foundation is in place, you can seamlessly connect more modern channels with any part of your business. Unified with your back-end systems, an e-commerce platform will serve as the base for your digital platform. 

With instant access to inventory, you will provide accurate inventory levels to shoppers while delivering relevant cross-sell and upsell merchandising offers. 

Step #3. Make Use of Data-Driven Insights

You cannot manage if you don’t measure it. 

In particular, fashion and retail companies that have integrated data into their planning, merchandising, and supply chain processes are not only witnessing tangible results but are also closing the customer experience gap.

In fact, data-driven strategies for stock and sales optimization led to a 10% increase in sales, according to a McKinsey research. The same study highlights how data-centric models have streamlined inventory management, improved returns forecasting, and optimized transport networks. 

Step #4. Extend Your Digital Capabilities to the Store and Beyond

Your e-commerce platform, which is now tied with your back-end systems, will also unify your online and offline channels by supporting a modern Point of Sale (POS) system. 

This essentially means that your customer journeys can easily transition between online and offline platforms. Sales associates can quickly leverage inventory and product data for an enhanced in-store experience. 

Other channels, such as pop-up stores, catalogs, and call centers, will also seamlessly connect with your back-end systems, allowing your shoppers to truly buy from any touchpoint.

Step #5. Personalize It

A survey by Twilio Segment highlights that only 60% of consumers find their retail shopping experience to be personalized. 

While e-commerce does offer a way ahead for brands to customize their customer journeys, such strategies usually focus on improving the shopper’s current visit. 

But technological innovation is giving a whole new dimension to personalization. Retailers can utilize a customer’s current shopping behavior to generate profiles, complete with their brand affinities, to point towards their future purchasing habits.

Putting Customers at the Center

Customer behavior and preferences keep evolving, but the pandemic has created a revolutionary change in their purchasing habits. 

Convenience takes the top spot on the list. In fact, 73% of customers are ready to spend a premium on convenience, according to Deloitte’s Global State of Consumer Tracker

While the tide of digital innovation does not mean the permanent closure of in-store experiences, it does require brands to focus on building customer-centric strategies for a more immersive omnichannel approach.

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