In a multi-layered interactive environment where information flows from all directions, consumers expect authentic interaction with retailers, and those retailers with authentic narratives are likely to attract more consumer attention…
The fashion retail industry is undergoing a rapid transformation, catapulted by social media, which has significantly altered buyer-seller dynamics. Previously, it was characterised by a one-way, outbound and market-controlled system, based on the principle of sales maximisation. This linear model provided limited or no feedback means for consumers and was exclusively controlled by retailers. However, the rapid adoption of social media by consumers has disrupted the retailer dominant model of fashion and is expected to profoundly impact the marketing practices of fashion retailers in India.
The preponderance of social media in users’ lives is one of the reasons for the changing reality of Indian fashion retail. Today, the number of social media users in India is 351 million (including 260 million on Facebook and 110 million on Instagram), and is expected to rise to 448 million by 2023 (Statista, 2019). The most popular smartphone activity is visiting social networks (Statista, 2019), reflecting the growing popularity of social media amongst users. Social media has not only altered the way users communicate with each other, but also has changed consumer behaviour in terms of how people want to receive information, communicate with brands and shop. The fashion retail landscape is witnessing an era of hyper-connectivity and multi-layered interaction, which has changed the rules of the game.
Social media has introduced tools which enable two-way dialogic communication, in contrast to the one-way communication tools previously used by fashion retailers. The traditional path to purchase where shoppers were solely influenced by retailers is defunct. Social media allows consumers to evangelise their experience with other shoppers in the form of reviews and recommendations, giving them the power to in uence how brands are created, developed and also rejected. For example, luxury brand Gucci was compelled to remove a line of sweaters from its Fall/Winter 2018 collection, following virulent criticism by Twitteratis of the design, which evoked blackface imagery. The power of content creation bestowed in hands of consumers has challenged the hierarchical power of firms in terms of information dissemination, which began with the growth of internet in the 1990s and has further proliferated with social media. The role of the consumer has evolved from being a mere recipient of information to becoming creators and evaluators. Shopper purchase decisions are no longer primarily guided by retailers’ persuasive marketing techniques, but rather by their friends, networks and consumer reviews on social media. About 97 percent of Indian consumers are influenced by personal recommendations and independent reviews online (Euromonitor, 2018). Additionally, fashion blogs have grown into a powerful instrument that can influence consumers’ decision-making process and alter their attitudes towards fashion retailers. According to Deloitte (2017), about 71 percent of Indian shoppers perform digital searches before embarking on their purchase journey. Obtaining product information, comparing product pricing, checking product availability and checking user reviews are seamlessly integrated in the purchase journey. As social media continues to gain popularity among consumers, fashion retailers also need to adapt and refine their marketing practices.
Opportunities & Challenges For Fashion Retailers
The large-scale adoption of social media by consumers and rapidly transforming consumer behaviour has forced fashion retailers to join the social media bandwagon. Various international fashion retailers such as Zara, H&M, Louis Vuitton and Gucci are present on multiple social media platforms such as Instagram, Facebook and Twitter. Moreover, Indian designer labels such as Manish Malhotra and Sabyasachi, amongst others, are also exploiting the medium to connect with consumers. Social media platforms are used by large and small fashion firms in India, for example, small fashion start-up The Khadi Cult use them to generate awareness and communicate their brand messages (Amarnath, 2018). Instagram in particular has gained popularity amongst fashion retailers in India to grow their reach and attract consumers. One reason for such ubiquitous adoption is that the cost of setting up and marketing on social media is much lower than on traditional media. Secondly, it provides an opportunity to build long-lasting customer relations through regular interactions and engagement.
The growing popularity and technological sophistication of social media makes it one of the fastest ways of spreading a message, facilitated by the network effect it can potentially create by the number of connections each user develops. Thus, fashion retailers can build greater visibility by communication through social media. Additionally, the rise of online cash-transfer facilities, internet banking and the introduction of Unified Payment Interface (UPI) launched by the Indian government have further simplified the process of purchasing online. This presents an opportunity for fashion retailers to use social media as a channel to positively influence consumers and lead to favourable outcomes such as purchase and post-purchase behaviours. Social media has placed fashion retailers a click away from consumers, removing geographical boundaries. The question is no longer about ‘where’ sales take place, but rather ‘how’ and ‘when’ they happen.
However, getting noticed in the marketplace is increasingly challenging, especially in the fashion industry which is marked by high competition and volatile demand. It is imperative for retailers to understand that social media is a user-dominant platform and to garner the interest of users, it is important to focus on their needs and preferences. Aligning functional structures to consumer needs should be the fundamental priority of fashion retailers in the social media age. It is no longer sufficient to compete on product, price and quality, as consumer needs have expanded beyond the core product offering to additional value-adding facilities.
Social media invites a shift in focus from ‘product’ to ‘customer service’ and ‘value generation’. Additional value in terms of service-rendering activities, personalised shopping environments, responsiveness and informational transparency are desired benefits for consumers. Fashion retailers should provide increased interactivity and better customer service to improve consumer retention and provide smoother and enriched shopping experiences. Top fashion brands such as Tommy Hilfiger, Burberry and Levi’s have even started investing in AI-powered chatbots to provide a seamless customer experience by making online assistance available 24/7.
In opposition to the traditional notion of value creation, where value was considered to be embedded in the product and in effect advertising the benefits of the products ‘to’ consumers, value creation now takes place ‘with’ consumers, known as value co-creation, where the value of fashion retailers and their offerings are now created, appropriated and shared with users. For instance, social media user activities such as commenting, liking, sharing or criticising all add meaning to the value of fashion retailers. Additionally, fashion retailers can benefit from real-time consumer feedback that can help them re ne their product and guide future launches. For example, UK online private retailer BrandAlley used the opinions of its online community members for an upcoming collection launch in 2011. Members were invited to vote for one of three styles and the one with most votes was put into production. Consumer insights, suggestions, opinions and reviews on social media are an important resource which can guide firm decision-making. Consumers can contribute more than just their financial patronage to fashion retailers. Co-creation initiatives also positively impact customer attitudes towards fashion retailers, as they feel more involved. In the social media landscape, value is co-created between the firm and consumers, meaning that fashion retailers have to adopt a flexible approach to business and constantly adapt to evolving consumer needs.
Top fashion brands such as Tommy Hilfiger, Burberry and Levi’s have even started investing in AI-powered chatbots to provide a seamless customer experience by making online assistance available 24/7.
One of the potential risks that cannot be ignored is that consumers can also act as value destroyers in the social media space, enthused by their collective power. Complaints and opinions can no longer be supressed, as seen when US retailer Gap launched a new logo in 2010, which was communicated through their Facebook page and resulted in a massive backlash in the form of negative online comments. GAP tried to modify the logo by engaging consumers and crowd sourcing, but this was another failed attempt, and the company eventually backtracked to the original logo to satisfy consumers. In 2018, Dolce & Gabbana was heavily criticised in China for projecting racism in its ‘DG loves China’ campaign, which insulted Chinese consumers. The brand was boycotted by many Chinese celebrities and consumers following the backlash over the controversial campaign on social media. The overwhelming reaction from the users clearly reflects the rise in collective power of consumers, suggesting that brand custodianship no longer rests only with the firm and the consumer voice cannot be ignored.
The advent of social media has also driven change in the competitive landscape. New ‘digital retail’ business models such as pure-play fashion retailers, flash-sales, subscription-only retailers have gained prominence through their social media presence and have set new standards of competition in fashion retail. Thus, fashion retailers will have to redesign themselves by leveraging digitally driven Omnichannel approaches to provide seamless customer experience. Additionally, social media has levelled the playing field for fashion retailers. As it serves as a low-cost medium of communication, it provides equal opportunity to small independents and big fashion players alike. As reported by Business of Fashion and McKinsey & Co. (2018), small brands are gaining wider consumer attention and are better able to target specific market niches and respond to emerging market trends. It is evident that competition has intensified, therefore fashion retailers must continuously innovate by creating profitable value-added services and experiences to consumers.
The wealth of qualitative and quantitative customer data available online can be leveraged to aid targeted promotion based on online consumer reactions such as likes, comments, reviews and past purchase behaviours. Data mining of information about customer behaviours and perceptions towards retailers, their needs and preferences, could help inform future strategies. Additionally, establishing and managing consumer-brand relationships can be valuable in retaining consumers. Since consumers start with research, gathering information from a variety of sources such as peer recommendation, past experience and brand interactions, before making a decision, it has become ever more important for fashion retailers to understand what their consumer wants, what they do not want and where and how do they shop. Consumers have a plethora of options to choose from, and it is crucial for fashion retailers to use the information they have to effectively segment the market in order to provide more personalised and valuable services.
Key Takeaways for Fashion Retailers
In the fickle online fashion environment, it is essential for fashion retailers to embrace customer-centricity, by identifying target audiences and understanding online communities, listening to and analysing online information, promoting customer engagement and value creation. Fashion retailers should examine different social media platforms to ascertain upon which one the target audience is likely to be present, as each platform offers different user functionality and satisfies different user needs. Secondly, fashion retailers should examine the likes, dislikes, community engagement and nature of involvement of their target audience. With rising competition and new alternative business models, it is essential to offer exceptional customer service and immersive experiences to add consumer value, beyond the product itself. In the new marketing landscape, customer engagement through interactive content generation helps gain customer attention. As consumers are willing to communicate with their favourite retailers and brands, indulging them with interactive content can be a useful strategy. However, maintaining transparency of information dissemination is an essential factor that can enhance or tarnish the image of fashion retailers. In a multi-layered interactive environment where information flows from all directions, consumers expect authentic interaction with retailers, and those retailers with authentic narratives are likely to attract more consumer attention.
Social media present opportunities for fashion retailers by providing a direct channel to connect, communicate, build relations with consumers, and obtain real-time feedback from them to improve their business operation and product development. However, fashion retailers have also ceded control to consumers and their online connections. Fashion retailers must to foster and manage the disruption and increase performance by effectively harnessing the power of social media to increase interactivity, responsiveness and value creation.