Fashion brands must improve digital marketing as online shopping grows

Consumers are growing more and more accustomed to buying clothes online, so much so that the share of e-commerce sales is set to grow from 20 percent today to 25 percent by 2020, according to a joint study by international marketplace Zalando and consultancy firm Boston Consulting Group (BCG). In this scenario, it is crucial for fashion brands to have a firm online marketing strategy, which is why the duo surveyed 90 global fashion brands belonging to 40 companies, as well as a group of senior executives in Western Europe, to learn how they are doing online marketing. They found out there is still a lot of room for improvement. Here are the study’s main takeaways:

1. Fashion labels plan to increase online media spending

Currently, some 43 percent of fashion brands’ marketing budgets goes to media advertising, of which 57 percent is allocated to online outlets such as paid social media, search engine optimization and retail media (advertising on wholesale and marketplace platforms like Zalando). With mounting competition, more than 95 percent of surveyed labels are planning on increasing their spending on online advertising in the near future. Of those, about 85 percent intend to spend more money on social media, while 60 percent are looking to prioritize retail media.

However, Zalando and BCG stress that it is crucial to know where to allocate the increased investment. “While most spend significantly more money on digital marketing, they still have much potential untapped. None of the study participants has achieved real excellence in this field”, commented Jessica Distler, BCG partner and fashion industry expert, in a statement.

2. They’re lagging behind when it comes to cross-channel data

The study revealed just 27 percent of fashion brands are closely linking online and offline customer data to best serve their clientele, compared to 67 percent in the e-commerce industry in general. To Zalando and BCG, it’s about time they catch up. “One global fashion brand has developed a complete view of its customers using advanced data-capturing techniques; information includes everything from past purchases to the garments a customers has tried on based on radio-frequency identification (RFID) tag data. Sales associates can use these profiles to make the most relevant product suggestions possible”, reads the report.

3. They’re not personalizing their messages to customers

Although over 76 percent of surveyed fashion brands perceive personalization to be important, less than 10 percent are actually personalizing their messages in email, social media and display advertisements. Most online shops aren’t personalized either, as a mere 38 percent of brands fully adapt the recommendation engine on their e-commerce websites to each customer. “Every experience with a fashion brand online should be tailored to the customer’s profile, location, and browsing and purchasing history”, recommend Zalando and BCG, highlighting that the use of personalized landing pages, recommendations and social media ads can rise online sales by up to 50 percent. Predictive analytics are key: only 43 percent of fashion brands extract customer insight in terms of price, product, promotion and place from previous purchase behavior in order to optimize their marketing campaigns.

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