As a follow-up to Lingerie Insight’s exclusive story that lingerie sales online are outperforming total etail growth, Justin Opie, MD of IMRG, discusses in more detail the changing face of etailing and how the lingerie sector is benefiting from the advent of mobile shopping and promotional events like Black Friday.
If you go back 10-15 years, many boldly asserted that clothing would never sell online.
The old concerns were largely centred around what we might think of as ‘changing room’ uncertainties – how will I know if it fits, how does the garment feel, what if I need to return it, does it suit me? Yet these concerns appeared to fall on deaf ears when it came to UK shoppers – the growth in clothing sales has been one of the key driving forces of the online retail market since we started tracking it in April 2000.
This, of course, isn’t to say it’s always plain sailing for retailers in this space. The market crash in 2008 put pressure on shopper spend that continues to be felt to this day and there have been occasions in the past few years where people appear to have been put off from refreshing their wardrobes when the economy looked particularly bleak.
However, the same does not also necessarily apply to the lingerie sector. As the products are relatively low-cost (the average basket value for lingerie in 2014 was £36*, compared with £58 for clothing generally), sales have not been as heavily impacted by the downturn as some other sectors selling higher value items, such as electricals or home and garden.
In fact, not only was lingerie one of the strongest performing categories in 2014, it has also recorded the second-highest overall growth throughout the economic downturn – with only the accessories sector seeing higher growth. Between January 2009 and September 2014 sales of lingerie items were up 265% – compared with the overall online retail market growth of 116%.
Moreover, the lingerie sector has actually outperformed growth in the total online retail sector in four out of the past five years.
A year of change
Every now and then something happens that completely changes online retail shopping patterns. The introduction of mobile devices – which served to create new peak shopping times occurring first thing in the morning and late at night – is one example, and in 2014 we saw another.
It’s perhaps difficult to overstate the impact that Black Friday had on the Christmas shopping period in 2014. It’s not new to the UK as Amazon have been pushing it for a while, but this year it really caught the attention of the media, which of course made shoppers hyper-aware of it and consequently led to unprecedented levels of activity that dwarfed all forecasts.
This isn’t to say that these were additional sales – it was more the case that the usual Christmas online peak, which had tended to last for a couple of weeks, was compressed into four days. The knock-on effect for the carriers was profound – as bottlenecks emerged and created backlogs that took many days to clear.
And the impact of this compression is still being felt – as the sales were pulled forward into November, it led to record low growth for December (+5%) which also pulled the January growth (+7%) down far lower than our forecast for the year (+12%). Much of the January sales stock had already sold, as it were.
In December, lingerie sales fell 18% on the previous month and were 11% down year-on-year. To put that impact in perspective – in December 2013 lingerie was up 23% on the previous month and up 25% year-on-year.
Black Friday will happen again next year – the question now is how it can be better managed. It’s interesting to think that the concern always used to be around whether the carriers would be able to deliver all the orders in time for Christmas – by pulling the bulk of these orders into November, Black Friday has solved that issue, at least.
The online fashion sector is a very strong performer when it comes to mobile devices.
Online fashion retailers receive 16% more visits and 16% more sales as a share of their total online visits and sales via smartphones and tablets than the online retail market taken as a whole.
There may be any number of reasons for this. It could be that rich media techniques – such as using 360 zoom or hotspots on a garment image – really add to the experience for this type of product and work well with the touch/swipe functionality of these devices. It could be the high use of video in fashion, which again works well with the device type. Or it could simply be something to do with the immediacy of fashion – the need to constantly keep up with new ranges and styles which mobile devices enables in multiple contexts.
And then of course there is the social aspect. Shoppers don’t just want to buy from brands, they want to engage with them using all the social networks at their disposal – and mobile is increasingly the platform through which this type of media is accessed.
Mobile may be a key part of the puzzle, but it is only one channel. The fact is that customers can arrive at a purchase decision after engaging with the brand through a number of touch-points, and the experience they get through these various contact points may be determining in coming to that decision.
It’s certainly a far cry from those early day dismissive ‘people will never buy clothes online’ statements. Now it seems no surface is off-limits as a sales window – mobile phone, bus stops, airport virtual wall displays – or space off-limits as a fulfilment point to receive the item ordered – home, train station, click and collect, post office, another retailer’s store even in some cases.
According to our data, 24% of total retail sales now take place online. The difficulty going forward seems to be around deciding what online actually means.
*All figures taken from IMRG Capgemini Indexes.