Technology is the leading force behind ecommerce and therefore it is often seen as a threat for traditional retail. Could technology actually be an opportunity for the revival of fashion retail?
Like most of us, I have done a lot of my Christmas shopping online… and I can see that some physical stores are closing like my favourite Colette in Paris. Is technology a risk for traditional retail? Or could it actually be an opportunity?
Amazon is definitely a dominating retailer and its growth in fashion made it become the number one retailer in fashion in front of its traditional competitors Nordstrom, Sears and Macy’s in the United States. Amazon has even created seven own labels in the area of fashion. Will e-commerce and technology kill the traditional fashion retail?
Actually, we can observe that the purchasing experience mixes online and offline (in store) steps. More than half of consumers Research Online to Purchase Offline (ROPO) or go to stores before buying online (showrooming). It therefore becomes very difficult for retailers to track where the buying process starts and ends. And it is clear that the physical retail plays an important role in this omnichannel balance.
In parallel to this movement, we can observe the emergence of innovative concepts in the fashion world. Farfetch, considered the most dynamic of British retailers, is actually a platform of boutiques, and as such it provides an opportunity for traditional multi-brand boutiques (such as Fashion Clinic and Stivali in Portugal) rather than a digital threat as some might have feared. Farfetch, through its global platform offers independent boutiques a global visibility and access to international markets that they could never have reached on their own. Additionally, Farfetch acquired Browns, a traditional London department store, in which numerous “store of the future” initiatives are tested.
Beyond the growth of e-commerce and its interaction with traditional retail through the development of omnichannel, technology is increasingly present in physical brick and mortar fashion retail to transform the customer experience. For instance the Burberry store in Regent Street in London, considered the most connected store in the world, just implemented Augmented Reality. Others are offering magic mirrors (that take picture of you trying your new dress and send it to your mobile phone). The store is becoming as much a social place for meetings, and experiences than a place for selling per se. Technology represents an opportunity to make the space attractive and exciting. Additionally, providing advice is increasingly important in the customer experience. This advice is offered by a physical sales person… but guided and supported by the customer data collected and analysed by technology.
These questions are at the heart of the work carried out at CATÓLICA-LISBON new Center for Technological Innovation and Entrepreneurship.
Celine Abecassis-Moedas, Associate Professor na CATÓLICA-LISBON.