A survey of fashion retailers reveals the challenges of replicating the in-store experience online. But huge opportunities exist to grow digital revenues.

Retailers are trialling a range of solutions to improve online sales conversions

In the digital age, the ability for fashion retailers to trade through multiple channels is becoming increasingly key to the long-term success of their business. But running an online store is very different from running a traditional bricks-and-mortar store and retailers that operate online face a whole new set of challenges.

To better understand the dynamics of the online trading environment, Retail Week commissioned a survey of leading fashion retailers, the results of which offer some fascinating insights into how retailers view the key issues affecting online sales optimisation.

One thing abundantly clear is that more and more shoppers are using the internet to actually buy the latest fashions, rather than just search for inspiration. More than 60% of retailers surveyed said their online clothing sales were growing at a rate in excess of 25% per year, while 10% reported sales were growing at a rate of 100% or more.

This growth is reflected in consumer responses to the Drapers Etail Report 2012, which discovered that just 20% of people currently never buy fashion online, while 40% do so once a month or more.

Nevertheless, for the vast majority of multichannel fashion retailers, online sales are still dwarfed by sales through conventional bricks-and-mortar stores, and, as such, a huge opportunity exists to grow online revenues.

Replicating the in-store environment online is challenging, and hence conversion rates online tend to be considerably lower than in traditional bricks-and-mortar stores. In particular, retailers believe that the inability to physically interact with an item is the main barrier that prevents consumers from shopping for fashion online.

Two thirds of respondents to the survey said they believed the fact that customers cannot tell the quality of the product was a major hurdle to converting website visits into sales, while 62% cited consumer concern about whether the products will fit and look good on them as a key barrier. Four in 10, meanwhile, believed customers not being able to tell what size they should order was an impediment to better conversion.

Breaking barriers

These findings mirror consumer responses to the Drapers report, which found that items not fitting is by far the main reason why fashion products bought online are returned, with poorer quality than expected the second most cited explanation.

Sizing, of course, takes on a whole new dimension online, where the customer is unable to try before they buy. Of the retailers surveyed, just 21% disagreed that sizing had become more of an issue for them as a larger percentage of business moves online. Particularly for retailers selling multiple clothing brands, a lack of consistency of fit across different labels was identified as a problem and inconsistent sizing was cited as a key issue by 64% of those retailers.

When asked what they are doing to improve conversion rates for the clothing categories on their websites, retailers offered a variety of responses. The most popular actions included improving information on clothing sizes and fit on product pages; trialling different checkout processes and different levels of information on product pages; offering free returns; and adding customer ratings and reviews to the site. Almost a quarter of respondents, meanwhile, said they were trialling a virtual fitting room or fitting tool on their online store.

In recent years, developments in virtual fitting rooms have allowed consumers to see what an item of clothing looks like dressed on a real, robotic mannequin that has adopted their precise, individual body shape.

More than 50% of the retailers surveyed said a virtual fitting room was a great idea, although more than half of those said it was too expensive at the moment for them to consider implementing, and 19% of respondents expressed concern about the complexity of implementing the technology within their own online store.

Rate of returns

One of the key attractions of providing customers with an online fitting room is an anticipated reduction in the rate of items returned. The nature of the online shopping environment means return rates are far higher than in the bricks and mortar environment – indeed, it is not unusual for consumers to buy multiple sizes of a specific item with the intention of returning the sizes that do not fit. Almost two thirds of retailers surveyed said rate of returns is a crucial KPI, and as such they take steps to analyse the reasons why customers are retuning products, while just 5% said they do not measure returns at all. More than 85% said reducing clothing returns was of high or medium priority to the business, although 7% said they are happy for returns to rise if conversion and online sales are also rising.

Virtual fitting

Virtual fitting rooms allow consumers to try before they buy

 

What the survey results show is that a general consensus is beginning to emerge on the opportunities and challenges facing online stores but, equally, each retailer has its own priorities and there is no single one-size-fits-all approach to optimising online fashion sales.