Last updated: The 3 waves of digital transformation in fashion retail

The 3 waves of digital transformation in fashion retail


Listen to article

Download audio as MP3

It’s no secret that the rise of the internet has been transforming the retail landscape across all industries for the last fifteen to twenty years, and fashion retail is no exception. This is an ongoing, ever-evolving event requiring adaptation to survive.

Despite the challenges facing the fashion retail industry—from creating and streamlining a unique customer experience across all touchpoints to price inflation and discounting issues—it’s still the most exciting industry to be in, because within the challenges of transformation lay opportunities.

In examining the fossil record of the internet (r(e))volution, we can clearly see that there are three waves of digital transformation in fashion retail. While some fashion brands navigated multiple waves simultaneously, others have not even started the journey.

Regardless of where you are, it is paramount to maintain brand identity and design a unique innovation proposition (UIP) that creates real differentiation in the market.

(Web) surf’s up: 3 waves of digital transformation in fashion retail

Just like when learning to surf the waves of the ocean, learning to navigate the riptide of change in the fashion retail industry requires having a good teacher, spending some time on dry land stretching and assessing the waves, and pacing yourself.

Wave 1: Customer-centric retail

Increasingly, fashion retailers focus on customer centricity, but it wasn’t always this way. There has been a power shift: Where previously brands had been in control and dictated all parts of the supply chain, fashion consumers now demand higher levels of service (i.e. immediacy, value, quality, sustainability, etc.).

Customer centricity requires a change of perspective across the entire organization, redirecting focus from product and brand to the customer. Fashion brands must ensure customers have access to them through a strong omnichannel presence. Realtime stock availability, 360 view of the consumer, and heeding the voice of the customer in service development are fundamental to navigating this first wave successfully.

Wave 2: Merging digital operation across all touchpoints and business models

Once the brand has achieved customer centricity, another challenge arises. Typically, it starts by merging store operations with e-commerce operations. As we have seen in the market over the past few years, however, this requires e-commerce to be seen in the organization as profitable, representing at least 10% of the overall revenue.

This wave represents a phase of big shifts within the organization. When e-commerce, marketing, and IT teams are not working together, this wave becomes painful and, many times, unsuccessful, with stores closing due to their irrelevance to digital customers. And, in some extreme cases, it ends in the business falling into administration.

In this second wave, when fashion brands also have a wholesale operation, buyers and marketers come together, digitalizing the showroom and offering B2B customers a website that enables pre-season shopping, as well as changes to orders already placed, all within specific timeframes.

Digitalizing the B2B operation gives fashion brands the opportunity to become more efficient in producing various collections. If properly connected with the direct-to-consumer operation, this enables the wholesale operation to predict fashion trends further in advance.

Key elements of successfully navigating this second wave include considerations such as omnichannel customer journeys and a digital board for strategic decision making.

Wave 3: The multidimensional consumer

The third wave of digital transformation regains focus on the consumer. During the second wave many fashion brands experience an identity crisis. They become so data-obsessed and data-centric that the human factor of fashion—the very primordial reason that the fashion industry is inspirational—is somehow lost in translation.

Fashion brands going through this phase begin questioning why they have so much data that doesn’t seem to have any logic. As useful and coveted as data is, answering who, what, where, and how, in abundant and minute detail, still cannot answer the last remaining question: Why? Why, despite all of this data available, do consumers still behave in ways they can’t predict? Why is the market share smaller than it was before the transformation initiatives started?

As consumers mature, they tend to recognize very well what appeals to them and what is merely another sales technique to keep them spending more. Customers expect premium retail execution and a high level of personalization to the segment of one, but at the same time, want their privacy respected, consequently refusing to give consent to use their data if all they get in return are creepy, hard-sell messages.

Consumers expect fashion brands to become intelligent enterprises and offer a premium level of service that considers life cycle and context. Brands need a 4th CRM generation that doesn’t merely track, but also engages consumers in a more personal and human way. Those brands who achieve this will win the market.

Now more than ever, fashion brands must strive to design a unique innovation proposition (UIP) that appeals to customers and consumers. Engaging with the new fashion consumer, companies have an opportunity to shift the conversation and make deeper connections, focusing on the experiences and feelings that fashion products can evoke.

Adapting to the multidimensional consumer is evolving, and fashion brands resisting the third wave of change will find themselves on the edge of extinction, despite their confidence that current brand loyalty will keep them afloat.

Your customers are managing 85% of their relationships online. Omnichannel CX can provide everything they want – and more.
Get started HERE.

Share this article


Search by Topic beginning with