Visual merchandisng, Technology and The UK Fashion Industry by Katie Hopkins

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UK Online Market Thrives as Stores Try to Become More Appealing, How is the UK fashion Industry Changing? AS TECHNOLOGY EVOLVES STORES PUSH TO FIND FRESHER WAYS TO ENTICE THE CONSUMER. A REPORT TO DISCUSS.

(Dagnall,2017)

Written by Katie Hopkins

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Currently. The UK fashion industry is currently performing at an expeditious rate, set to “Grow by 2% in 2017” (Drapers, 2017:online). This report will not only discuss the theory and reasoning behind this but will also touch on key topics including technology and visual merchandising whilst focusing on the middle market online retailing sector. Customers continue to demand faster fashion whilst becoming more considerate about where the garments are made and travelling from. Richard Price CEO of F+F brand at Tesco stated, “customers are demanding products to market in a faster time” (Hounslea, 2017:online), further showing it is a main concern. Global warming and carbon footprint are high in the news more than ever before therefore companies are under stress to be as sustainable as they can. Not only are they under pressure to keep up with consumers wants and needs but having a political voice is a must in the time of Brexit and the huge changes to the UK government.

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Consumers are further set to spend “£57.7bn” on clothing in 2017, “weaker compared with 2016” (Mintel,2017:online). It can be shown through this figure that retailing will take a back seat as disposable income reduces, whilst the cost of living continues to rise. Other sources of retailing, (online for example, that shall be covered in this report) begin to soar even though spending is being reduced.

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Furthermore, as the focus for this report will be on the online retailing industry it is important to share the current state it is in. Mintel states the “Online market to reach £16.2bn in 2017” this means the section of the fashion industry will have grown by a staggering “17.2%” (See Figure 1). This suggests having an online presence is more important than ever before, throughout this text those retailers pushing the online boundaries for instance Asos and Amazon will be considered as leaders and influences in more depth.

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Figure 1 Source: Mintel

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Middle Online Market. As the online market has flourished with technology it is clear the main online traders such as companies like Amazon and Asos are higher in the rankings than ever before. Even so “Next remains the largest online retailer with 12% of the market” (Mintel,2017:online) (see figure 2). Customer loyalty can be answerable for this as the store has a worldwide reputation. The store has realised the potential for the online market and consequently grown with the times. Even so Next have “lost a large amount of share…. where Asos have gained” (Mintel,2017:online). Asos could be performing well due to the vast range of items, for all sizes and both men and women. They stock a wide range of brands from Adidas to Missguided which provides a one stop shop for those who want an easy and stress-free shopping experience. With fast fashion turnaround, it also appeals to those who follow trends and have the need for fashion inspired straight from the catwalk. Amazon similarly appeals to the wider market providing clothing as well as technology alongside a vast range of departments. In conjunction with deals and bestsellers, the 'Prime' membership service means consumers can receive items on next day delivery. It can be said that this is more popular recently as consumers continue to be more demanding. Asos provides a service in the same way offering ‘Premier Delivery’, a one-time payment for unlimited next day delivery for a year. These two online companies are booming in the industry, "Amazon now the 2nd largest online retailer" (Mintel,2017:online). This is due to click of a button shopping as well as meeting further wants and needs from customers, offering delivery wherever the consumer may be in the world. This offer has started to show up on smaller online retailers in the fast fashion market such like Missguided, Boohoo and Pretty Little Thing.

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Equally they attract a younger audience and have done so through the connection of social media. Retailers are able to grab the attention of the consumer by offering discounts to gain custom as “Two-thirds of millennials say they will switch brands if they are offered a discount of 30% or more” (Kestenbaum, R, 2017:online).

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Fast fashion is taking over the retail market, trends from catwalk to stores appear rapidly, these three Manchester based retailers such as Missguided, Boohoo and Pretty Little Thing are at the top of the game.

Estimated market shares of online sales of clothing and footwear, 2016

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FAST ONLINE FASHION PERFORMANCE

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Figure 2 Source: Mintel

By the popularity of hashtags and influencers these companies can play on the trends and likes of this market and introduce more customers to their site by using social media promotions and 'like' worthy imagery.

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Concept to Customer. The concept to consumer will adapt according to market level and hence change the supply chain. In this case middle market online retailers who primarily focus on offering fast fashion need a smooth and quick chain to allow product to go online as soon as possible. The businesses need to be proactive to ensure they are the first to supply the trend of the moment to customers, further catching the markets' demands first. Figure 3 shows the outline of the supply chain from concept to consumer for the fast fashion online market, where the inspiration is heavily trend driven and taken from the catwalk. This level of market is thus part of the ‘trickle down’ theory,

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However in some cases trends grown from the street and influencers on social media can also mean the level acquires a ‘bubble up’ style. They use comparative and directional shopping to be at the top of the game, these brands and/or companies use micro trends to allure shoppers and be superior to competitors in the same market The Missguided founder, Nitin Passi, says the brand are “rapid fashion” (Cocozza, P, 2015:online), working with a swifter turnaround than high street stores like Topshop and River Island. Using micro trends as the main base of the online shop, ‘milking’ of designs is often popular to gain customer return to the site. A shorter supply chain allows these reproducers to stay up to date with the ever-changing industry.

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Figure 3. Source: Concept to Customer, Virginia Grose

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UK based companies have a tendency to use "British based factories" (Goodley and Kollewe, 2017) to guarantee fast turn-around, even though they have been slated for not paying the workers enough money, linking back to the ethics in fashion news at present. Manufacturing close to the fabric sourcing also allows the supply chain to decrease even more so, making the cost cheaper and consequently the products.

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The future of this supply chain could hold more use of technological advances (such as automate engineering) as companies grow and gain more profit to use back in the business. More UK based warehouses and manufacturers could become under construction to cater for advances in industry. This would make more brands have an even faster turnaround, cutting travel costs and additionally making them more sustainable as a company by cutting their carbon footprint. Furthermore acquiring a local distribution centre or a multiple sourcing strategy can cut out delay in mistakes and make certain the garments can be sent out to the consumer on time. (Johnstone, 2017)

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UK based companies have a tendency to use "British based factories" (The Guardian, 2017)Â to guarantee fast turn-around, even though they have been slated for not paying the workers enough money, linking back to the ethics in fashion news at present. Manufacturing close to the fabric sourcing also allows the supply chain to decrease even more so, making the cost cheaper and consequently the products.Â

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The future of this supply chain could hold more use of technological advances (such as automate engineering) as companies grow and gain more profit to use back in the business. More UK based warehouses and manufacturers could become under construction to cater for advances in industry. This would make more brands have a faster turnaround, cutting travel costs, additionally making them more sustainable as a company by cutting their carbon footprint. Acquiring a local distribution centre or a multiple sourcing strategy can cut out delay in mistakes and make certain the garments can be sent out to the consumer on time.

Promotion

Jonathan Midenhall, CMO, Airbnb

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Technological Revolution.

As technology and the online world advances and more consumers begin to shop online, stores struggle to keep footfall, and so reach to visual merchandising to pull interest back in to physical shopping. “A window display will hold the customers attention for three to five seconds” (Dillon S, The Fundamentals of Fashion Management) therefore these displays need to connect and make the consumer curious in order to draw them in. This is effecting the industry as companies need to create new ideas consistently to keep the public interested as “Online fashion is to grow 17% in 2017” (Mintel, 2017:online), suggesting more people will begin to shop via the internet as an alternative to purchasing in-store. Many factors are affected by these changes which will be explained further in the text.

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VISUAL MERCHANDISNG Visual Merchandising needs to provide an inviting, exciting atmosphere to engage the consumers back into the stores, instead of spending what is left of their disposable income online. The appearance of the store will entice a consumer in and so gain more sales. Visual merchandising modernisation begins to attract customers back to appreciate physical shopping by “conceptualisation of new and fresh design ideas” (Dillon S, The Fundamentals of Fashion Management).

SOCIAL MEDIA Social Media also plays a huge part in the technology revolution that has changed fashion as the world knows it. This development supplies retailers with a new edge of promotion, nevertheless it comes with unconstructive factors to stores, as online shopping boosts radically due to social media promotions and advertising. “Visual Content is more than 40 times for likely to get shared on social media than other types of content” (Dreamgrow, 2017:online). This provides evidence towards social media's influence on shopping habits hence more brand outreach happens online. .

TECHNOLOGY IN STORES Technology not only starts to appear in window displays but also on the shop floor. The use of iPads and in-store ordering gives an alternative way to shopping when the product has sold out, meaning the customer can gain free delivery without the task of ordering the item at home. This improves the experience for customers and creates a modern way of meeting their demands.

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IN-STORE EXPEREINCE As living costs rise as well as price of garments and everyday items “Consumers want to spend disposable income on experiences” (Mintel,2017:online). This translates in the industry to a “Demand for fashion retailers to add food and drink venues to their stores” (Mintel, 2017:online). A report by Mintel displayed this at the highest experience at "32%". The ability to have a break or a further gratifying experience in-store could continue even further by an increase in concept stores on the high street.

ONLINE EXPERIENCE As social media develops and the younger generation appear online it could be suggested they can be more persuaded to shop online as they are “driving online clothing sales” (Mintel,2017:online). With more and more offers appearing via these online channels and less customer loyalty, younger consumers can be influenced by cost of garments. Even so “52%” of an older demographic of “females 25-44” are also “interested in style advisors online” (Mintel,2017:online) this further adds to the idea of gaining an experience whilst purchasing new items, but this time in the comfort of the consumers home. .

ULTIMATE SHOPPING EXPERIENCE All of these factors together would create an ultimate shopping experience to further develop the fashion industry on and offline. However, as technology develops even more so it is not clear how the brick and mortar stores could cope with another development. It also implies in spite of this consumers do want to shop in-store but need additional services to “enjoy the process” (Russell P, Field Visual Merchandising Strategy).

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Large high quality promotional graphics gives the customer inspiration and style ideas, as well as pointing out key looks in the store or online at that current time.

Collection points in stores for online orders appear more frequently to allow customers the choice of shopping instore or online and give the option of returns on the day and changing room facilities. Delivery and Returns

Well-lit stores provide a comfortable shopping experience, not only can this be translated in mood lighting or beam lighting on specific product, but it means customers can see garments clearly.

Fixture placement in stores is important for easy movement and to separate different types of product. It makes it clear to the customer where they can find items they may be looking for.

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Influencing the UK. Thinking about the technological revolution and the adaptations and significance of visual merchandising it is now important to discuss the influence this has on the UK fashion industry more particularly the online market. . TECHNOLOGY AND THE UK INDUSTRY The revolution and development of social media and technology means for companies to stay on track and continue to interest consumers they need to adapt according to change, where “Technology remains at the core of strategy” (Drapers, 2017:online). With less cause for brand loyalty and online retailing soaring how will branch stores stay afloat, the question continues to challenge brands to give the consumer a shopping experience they will travel for. To succeed “The industry needs innovation, generated at the same rate as product consumption” (Grose, V, 2012:07) therefore businesses have to give the customer continued new ideas for interest to remain. App development has made an easier way of shopping from the customers mobile, most companies (see left) have applications, easily downloaded on the app store for browsing and checkout shopping.

ONLINE RETAILERS AND THE UK INDUSTRY Missguided, Asos and Amazon are few of many middle market online retailers, even so these are seen to be a major importance for consumers. As “51% of female shoppers prefer to shop at retailers that sell frequently updated ranges” these businesses hold a fast supply chain in order to suit customer’s needs “71% of these shoppers (are) aged 16-24” (Mintel,2017:online) hence the rise of UK retailers; Asos, Boohoo and Missguided. The consumers affected by this change in how stores communicate not only are online shoppers but store shoppers who hope for a productive yet exciting shopping experience. Amazon have also realised the need for an updated fashion department and so are using "catwalk or street-style inspiration" to improve fashion online via their site (Armstrong, A, 2017:online). Delivery and Returns

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VISUAL MERCHANDISING AND THE UK INDUSTRY Visual Merchandising has been taken to a new level in the UK, with technology used in window displays at Boux Avenue, to online brands now finding the need to have a physical store. Missguided for example now have physical stores around the UK to show how the product translates into a shopping experience, the neon lighting and social media creates links to their online emporium. This is received well by the UK market as Missguided have listened to their consumers and given the industry a new edge for both markets on and offline. Not only does this give the customer an option to choose their preferred retailing method but gives the brand more outreach to new groups of people who only shopped in-store rather than via the internet. SWOT OF ONLINE RETAILERS Strengths: Good turnover due to shorter supply chain, student discount, and offers promoted by social media, good delivery services offering unlimited next day delivery. Weaknesses: Technical issues would cause disruption on the website, garments could be bad quality due to rush in supply chain, complacent with clothing, having a business only online could be a drawback for consumers wanting to try before they buy. Opportunities: Opening a retail space, providing a CSR programme and having a focus on sustainability, using influencers to broaden audience. Threats: Competitors, same designs in the market, hacking online, lack of customer loyalty due to offers and promotions. (Johnstone, 2017)

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To Conclude. Overall the fashion industry is an every-growing trade influenced by art, culture and street style created by innovators providing the business with original concepts. The online retail industry continues to develop as technology increases, providing new obstacles for businesses to conquer as shops lose custom. Visual merchandising increases customer interest and presents contemporary ways to shop, this may possibly translate to an altered shopping experience, concept stores or the loss of a high street. Trends which may appear in the visual merchandising world could be more focused on customer interaction, providing new ways, using technology to gain customer attention and entice them in-store.Â Customer may continue to shop more specifically online in the future however they would travel to store to gain an experience rather than just to purchase items of clothing, shoes or accessories.Â Even so this method could turn the tables around completely drawing consumers back to the traditional retailing environment. The popularity of stores and entertainment in-store could provide a new means of socialising. The online retailers may have to increase retail store qualities such as online stylists or virtual shopping to retract the need to travel for this activity. (Johnstone,2017) This report showed how different factors exert and can manipulate the fashion environment above all, in the UK and online. To view the report electronically find it at: https://issuu.com/katie.hopkins

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iTunes. (2017) Boohoo App Icon. [Online image] [Accessed on 16th October 2017] https://itunes.apple.com/gb/app/boohoo-com/id1018236462?mt=8 iTunes. (2017) Missguided App Icon. [Online image] [Accessed on 16th October 2017] https://itunes.apple.com/gb/app/missguided/id842503500? mt=8 iTunes. (2017) Pretty Little Thing App Icon. [Online image] [Accessed on 16th October 2017] https://itunes.apple.com/gb/app/prettylittlething/id1138840268?mt=8 iTunes. (2017) Urban Outfitters App Icon. [Online Image] [Accessed on 16th November 2017] https://itunes.apple.com/us/app/urbanoutfitters/id358821736?mt=8 Johnstone, G. (2017) Customer Experience. Manchester: Manchester Fashion Institute, distributed on 24th October 2017, in workshop 5, for module ‘Fashion Industry’. Johnstone, G. (2017) Fashion Lifecycle. Manchester: Manchester Fashion Institute, distributed on 17th October 2017, in workshop 4, for module ‘Fashion Industry’. Johnstone, G. (2017). The Fashion Marketplace. Manchester: Manchester Fashion Institute, distributed on 3rd October 2017, in workshop 2, for module ‘Fashion Industry’. Jon Billingsley. (2017) 17 Ecommerce Quotes to Guide Your Online Strategy. Bing Digital. [Online] [Accessed on 16th November 2017] https://www.bingdigital.com/17-ecommerce-quotes-guide-online-retail-strategy/ Kestenbaum, R. (2017) This Is How Millennials Shop. Forbes. [Online] [Accessed on 16th November 2017] https://www.forbes.com/sites/richardkestenbaum/2017/06/14/this-is-how-millennials-shop/#2347c57c244c Mintel. (2017) Clothing Retailing – UK- October 2017: Executive Summary. [Online] [Accessed 16th November 2017] http://academic.mintel.com.ezproxy.mmu.ac.uk/display/861537/?highlight Mintel. (2017) UK online sales of clothing, fashion accessories and footwear to grow by 17% in 2017. [Online] [Accessed on 16th November 2017] http://www.mintel.com/press-centre/fashion/uk-online-sales-of-clothing-fashion-accessories-and-footwear-grow-by-17-in-2017 Missguided. (2017) Keep on being you. [Online image] [Accessed on 20th November 2017] https://www.missguided.co.uk/campaign/keep-on-being-you Missguided. (2017) Snapcode. [Online image] [Accessed on 25th October 2017] https://blog.missguided.co.uk/behind-the-scenes/were-on-snapchat Pinterest. (2017) Fashion Industry A1. [Online] [Accessed on 16th November 2017] https://www.pinterest.co.uk/ktblogs/fashion-industry-a1/ Russel, P. (2015) Field Visual Merchandising Strategy. 1st ed. London: Kogan Page. Sender, T. (June 2017) Fashion Online. Mintel. [Online] [Accessed on 16th November 2017] http://academic.mintel.com.ezproxy.mmu.ac.uk/homepages/sector_overview/14/ Topshop. (2017) Homepage. [Online image] [Accessed on 25th October 2017] http://www.topshop.com