Fashion sales in e-commerce are growing three times faster than physical store sales. More than 25% of the fashion sales in Western Europe are expected to be made online by 2020, many of them on platforms or websites where various fashion brands sell their products. In light of this growth, the commercialization of fashion brands has also decided to direct its sales strategy to online channel.
However, while many fashion brands talk about digital marketing, few have really started on that path. For example, while 76% brands consider personalization to be very important, only the 13% uses it comprehensively.
Generally speaking, brands are still halfway there when it comes to achieving excellence in digital marketing. So they have a lot to gain by implementing these new digital marketing capabilities from the most basic to the most modern, including a 15% increase in revenue.
How can fashion brands get closer to digital marketing?
Online marketing is inherently more complex than offline is. That’s why it’s important for brands to take different factors into account when implementing their digital marketing strategy.
- Platforms drive online sales:
While sales on “multi-brand” fashion platforms are currently roughly similar to those of own-brand e-commerce sites, they are expected to grow and ultimately surpass the latter, increased by 12% per year to 2020, compared to a projected increase in 8% sales at the brand’s own sites.
Regarding such platforms, Amazon continues to be the undisputed champion in popularity,but Etsy has seen a 40th growth in sales in the third quarter of 2018 and its shares rose 150%, 110% more than Amazon.
- Brands plan to increase online media spending:
The most important element in the marketing budget is media spending with a 43%,57% of which is intended for digital marketing. Two-thirds of that budget goes to performance marketing and the rest to the brand.
However, there are significant differences by category: while urban fashion brands spend more than 40 of their budgets for online channels in the brand (content marketing and style guides, for example), footwear and sportswear brands spend only the 20%.
In the case of performance and brand marketing, the three most important digital marketing vehicles are social media, search and retail media (advertising on wholesale and market platforms).
It is expected that, in the future, more than 95% of brands plan to significantly increase their online media spending. Approximately 85% plans to increase paid social media spending and the 60% plans an increase in retail media, online with the increase in sales of the platform.
- Most brands have not yet achieved excellence in digital marketing:
While brands are spending a large part of their budget on digital marketing, on average, they are at the midpoint of their potential when it comes to achieving excellence in digital marketing. In fact, in all operational capacities and dimensions, the average level of excellence in brands is 45 out of 100.
However, several companies excel in a single dimension. For example, some brands are particularly good at content strategy, but their weak point is guidance.
Success factors
So far, brands have been seen to be taken into account when implementing a digital marketing strategy. On the other hand, the most advanced brands in their journey towards the global excellence of digital marketing stand out in three dimensions:
- Analysis of budget allocation, attribution and impact measurement.
- Orientation and customization.
- Asset production and content strategy.
These companies engage in various best practices, from the use of dynamic attribution techniques to the creation of content generated by users and influencers, that fashion brands that want to increase their competitiveness they’ll want to keep going.
Budget allocation, attribution and impact measurement analysis
Only a handful of brands are digital leaders in analytics for budget allocation, attribution, and impact measurement. Most are digital illiterate whose efforts are still limited when implementing last-click attribution, for example, and allocating a budget based on results-oriented return on investment.
However, given the complexity of digital marketing, mastering analytics to make the most efficient and effective marketing decisions is the key. The following are some of the best practices that digital leaders participate in analytics.
Without exception, digital analytics leaders use dynamic attribution techniques (such as multi-touch and fractional travel attribution), compared to 23% of fashion brands overall. They also optimize the allocation of your performance budget throughout the customer’s journey.
For example, a sporting goods manufacturer dynamically adapted its media mix during a launch campaign to different stages of the product lifecycle, using the most appropriate techniques for each, from raise awareness through sponsorship to drive consumer engagement with social media and drive sales through results marketing.
On the other hand, compared to only 27% of the fashion brands in general, 67% of the digital analytical leaders closely link customer data online and offline in order to target consumers anytime, anywhere.
A global fashion brand has developed a complete view of its customers using advanced data capture techniques; the information includes everything from pre-garments to garments that a customer has tested based on RFID tag data. Sales partners can use these profiles to make the most relevant product suggestions possible. And when a customer is near or in one of the company’s stores, the brand’s app sends location-based marketing messages and product recommendations.
Guidance and personalization
Currently few brands have achieved digital leader status when it comes to goals and personalization. However, some of the best practices among digital artists in this category are:
More than 80% of digital artists use ad-driven advertising, which uses a combination of first- and third-party data to create ads for specific audience segments, such as revenue- or age-based ads, supplemented by contextual targeting (ads generated by channel or stage in the customer’s journey) and geographic targeting (ads generated according to customer location). By comparison, only 29% brands generally use audience targeting frequently.
More than 80% of the digital interpreters in the targeting and personalization category use first-handdata, especially real-time or near real-time data that they can segment to target specific audiences (and often limited).
- Custom Digital Marketing:
Less than 10% fashion brands customize their messages in email or on social media. For the most part, e-commerce is also not personalized; Only 38% of the brands have a fully customized recommendation engine, and only the 21% combines their online and offline service to provide their customers with a truly seamless omnichannel experience.
However, digital interpreters in this category are already using customization to a large extent, especially when it comes to recommendation engines for content creation (75%), websites adapted to improve the experience of the (75%) and the convergence of online and offline channels. channels (63%).
Brands must customize all customer communications and rewards across all channels, not just digital ones. Each experience with an online fashion brand must be tailored to the customer’s profile, location and purchase history.
Asset production and content marketing
The amount of the budget that brands spend on digital content increases as they approach the excellence of digital marketing. Leaders in this category invest approximately 30% more in content creation than those who are further behind digitally. The following best practices are common to both digital leaders and the digital artists we survey.
- Users and Influencers “Generated Content”:
All leaders in this category use user-created and influential content, from videos taken at industry events to casual photos taken throughout the day. Traditional PR spending is changing, as 27% of all brands now use influential marketing and more than 80% plans to increase their spending on that content.
To maximize reach, content generated by users and influencers tends to be distributed across multiple channels (Instagram, YouTube, fashion blogs and other social media) by brands as well as users and influencers .
However, despite that influence and the effort of social networks such as Instagram, Facebook and Snapchat to become e-commerce platforms in their own right, the vast majority of consumers are not yet ready.
82% of them just don’t use social media to buy. The main reason social media shopping has not yet been consolidated is security (71%). Privacy comes below on your list of concerns, having been mentioned by 65%, followed by legitimacy (64%), as consumers are not sure that social media is a legitimate channel for the transaction.
- Increased content expenditure:
Digital leaders in this category spend 13% of their total marketing budget on digital content, compared to 9% of the fashion brands in general. Artists tend to take over creating more content, as they spend nearly 60% of the amount allocated to this role on domestic production, compared to only 25% on content created with media agencies.
They may also try to follow the example of digitally native brands, which produce low-cost (but high-quality) content, such as behind-the-scenes videos of fashion sessions or production facilities.
- A network of creative assets:
To create, manage, and distribute content, digital marketing leaders use Big Data in combination with databases. Campaigns are optimized across platforms and devices using content analytics and automated marketing tools, such as dynamic banner ads.
Excellence in digital marketing drives the bottom line
As mentioned earlier, for example, while 76% brands think personalization is important, only the 13% is using it widely. And while the 51% and 30% people think the same about AI and curated purchases, respectively, none of the brands have started using those digital marketing tools. However, achieving excellence in digital marketing can increase revenue by 15% overall.
San Francisco-based Stitch Fix is the biggest example of a fashion company that uses artificial intelligence to successfully consolidate customer loyalty and increase online sales.
For brands that are currently digitally passive, that selectively engage in the most basic digital marketing practices and generally fall behind the efforts of their peers, the first step for digital literacy is to lay down the foundations of the necessary skills and abilities.
That means adopting standard digital marketing tools such as retargeting, segmented newsletters, simple analytical and attribution models, and producing content for your own brand channels. Only these practices can increase a brand’s revenue by about 5%.
Becoming a digital interpreter will add about another 5 to the top line of a brand. To reach this level, brands must harmonize their content across all channels. That includes synthesizing data from disparate areas of the organization to drive automation and make better use of analytical models for allocation and budget allocation. They must also assemble multifunctional teams to focus on digital marketing.
Conclusions
By hiring people with skills that expressly support digital marketing, such as programmatic purchasing specialists, data scientists, and channel-specific content managers, they can create a clear advantage about competitors.
However, they must change the way they work while fostering a more agile culture of testing and learning with multifunctional teams that reward the exchange of best practices. And they must ensure that those digital skills and ways of working extend beyond the enterprise to partners and other members of their talent ecosystem.
