Despite scare stories like the demise of BHS signalling the death of the high street, a recent shift in consumer behaviour means that those retailers who offer an exciting shopping experience and tailored services will survive, and that also goes for web retailers, which increasingly face the challenge of competing in the online price war. Lingerie Insight gathered four lingerie retailers in London last month to discuss this hot topic.
On the panel:
Sarah Clarke: Editor of Lingerie Insight
Lizzie Faulder: Buyer for lingerie, nightwear and beachwear at Fenwick Bond Street
Lucy Litwack: Managing director at Coco de Mer
Lauren Thurston: Branded buyer for lingerie and nightwear at Figleaves
Annabelle Mu’azu: Founder and director of Beautifully Undressed
How have you found consumer buying behaviours change in the last five years?
Lucy Litwack: I guess the shift to online is probably one of the key things that has come about over the last five years. There’s obviously a lot of focus on developing digital and the ways to integrate digital and online versus bricks and mortar. Also, products have become more freely available so there has been a shift in consumers expecting efficiency and value.
Lizzie Faulder: There’s a live price war now because consumers have apps that allow them to go into store, scan the barcode and view all the different prices. Gone are the years of the twice annual sale; we’re having to be more proactive in making sure that we do offer a competitive price.
Lauren Thurston: We’re seeing that people are much more comfortable shopping online than they were a few years ago. They are also comfortable in buying a few sizes and returning them, whereas before they would either go in store or buy repeat orders. Everything is online now – banking, groceries, all of that – so shopping for fashion is no different. Consumers can search for price and they can search for convenience and they know they can send their returns back for free without going to the post office.
What do consumers expect from physical retail stores nowadays?
Lucy Litwack: From a luxury retail point of view, it’s less about the value and more about the experience. Wanting something now and cheap is not necessarily the focus. So if a customer goes into a boutique, they want so much more than a sales person selling them product; they want the VIP service. The soul of Coco de Mer is really the boutique, and what our customer wants more than anything is the personal service and the experience. We have a varied clientele, so we have loyal customers who have been shopping with us for 15 years and we have customers who are just dipping their toe into this kind of world, so we need to be welcoming and knowledgeable enough to cater for both kinds of customers. So we offer private shopping and erotic education after hours. The challenge is how we bring that experience online.
Lizzie Faulder: We have a very loyal customer, but we are definitely seeing our sales teams spending longer with each customer. It’s a very personal service and we need to make sure that we are giving them the time in the fitting room and then the after care, so ordering in shapes or sizes that we don’t have in store, for example. We’ve recently held special fitting events and we’re also looking at offering loyalty cards so we can reward customers for their continued business.
Would Fenwick ever consider launching an online store?
Lizzie Faulder: Yes, we are working to launch an online store in September. Fenwick has individual stores and separate buying teams in each of those locations, so we can tailor our offer to each local customer base. So, in launching an ecommerce website, which would essentially be a central store, we need to make sure that we integrate the qualities of each store into the website. It’s taken a long time to make sure we portray it in the right way, but Fenwick has hired a new ecommerce team and hopefully the website will launch in September. The store will initially sell selected categories including nightwear, before expanding into lingerie and other products. All of our future buys are now on a new online spreadsheet.
Would Figleaves and Beautifully Undressed consider opening physical stores?
Lauren Thurston: I think we’d like to, but we are very much an online company and we’ve always been an online company. If we do launch a physical store, everything needs to be perfect because it’s quite challenging out there. We are quite lucky in that we don’t have space restrictions, so we can offer as many sizes as possible. As a brand, we’d still want to be able to offer that in a physical store because our customer would come to expect that she can get her size with us. It would be great to do something like that in the future, but it’s not on the cards right now.
Annabelle Mu’azu: Our objective was always to be online because we were primarily trying to focus on the West African market, but as we’ve grown in the three years since we launched, we’ve found that many of our loyal customers are actually based in the UK and the US. As a result, we are holding more pop-up events. Selling online is great, but because of the luxury product we sell, there is still a need to see, touch and feel the product. So we’ll be opening more pop-up shops in September and, all being well, we plan to open up something more permanent in the West African market, even if it’s just for six months, just to see what it’s like. Going back to what Lucy and Lizzie said about offering the in-store experience, we don’t have bricks and mortar and people want to experience this, so we are spreading our wings a little bit. In terms of opening a shop in the UK though, I’m not so sure – there is a lot of competition!
How is Figleaves competing with physical stores that are offering a unique shopping experience that consumers can’t get online?
Lauren Thurston: It’s always been a challenge. The biggest thing we don’t have is the ability to fit. However, we do have a customer services team that take a lot of calls and spend a lot of time with people. We have a fitting guide online and in July we will be launching a new online platform, which will be much more personalised and offer a much more tailored service. Our newsletters will also be tailored to each customer’s individual needs, based on their age, size, lifestyle etc.
With the rise of supermarkets like Aldi and Tesco offering low-cost lingerie, do you think you’ll be forced to offer discounts?
Lucy Litwack: We don’t see them as competition because we cater to a completely different market…luckily, because they are really hard to compete with. But, when you have an online store, you are always competing with value because our online customer is much more interested in offers than our boutique customer is. Our boutique customer hates sales. We have a sale twice a year and our customers can’t wait for them to be over, whereas the online customer craves discounts. I think that’s because we have so many loyal customers visiting our store who just want what’s new, plus stores never look as good during sale time and the experience isn’t as special. There’s always the potential to offer exclusive ranges at a lower price point, but we would never go down to a Tesco price point.
Lizzie Faulder: We have a very similar customer; as soon as we have any new season’s stock in, we have a really good reaction to that. With sales, we are finding that we have to promote the first markdown with a much stronger message than we would have done historically because customers tend to wait for it to go down again. The supermarkets are doing an amazing job – they have a captive audience and if a customer wants to get everything under one roof then she can, but we have the service and the fit-trained staff that they may not have.
Lucy Litwack: For anyone trying to compete the big discounters, it’s always going to be hard unless you can produce the volumes that they can. However, there has been a shift in consumer attitudes whereby they care more about what they are buying and they want that connection with the brands they buy. That shift will make a difference, hopefully.
Does Figleaves and Beautifully Undressed offer discounts?
Lauren Thurston: We’ve kind of had to – more so than we have previously – in order to react to what’s going on in the market. We have a broad customer base, so we have ladies who like the entry price point and we have the lady who likes to spend a little bit more and is very brand loyal. So it’s really important for us to offer some entry-price products, but the most important thing for our customers is fit, comfort and quality, especially if she has a larger cup size. However, like Lizzie said, we do need to promote a strong message during sale time because customers are very used to seeing the discounts out there. The sale period does feel much shorter than what it used to be.
Annabelle Mu’azu: We are on a completely different spectrum because obviously we are a smaller retailer, which sells lingerie with mid-to-luxury price ranges. My problem is trying not to have offers all the time because our quantities are a lot smaller, but still trying to be attractive to the consumer. We are forced to offer discounts when we don’t really want to, so we having to be a bit more strategic now as to when we do it.
Lauren Thurston: For us, we find it a challenge to compete with brands who have paid for digital shopping ads – that’s got more prominent in recent years.
Lucy Litwack: I agree. It’s much harder if you’re selling branded product that people can buy in multiple locations because it’s difficult to build customer loyalty.
What day to day challenges do the online retailers of this table face?
Lauren Thurston: Not having bricks and mortar is difficult sometimes because you can’t fit the customers and the customers can’t see and touch the product.
Annabelle Mu’azu: For me, I’ve launched Beautifully Undressed in an quite saturated market, so we’ve had to up our game in terms of how we market, and that includes holding pop-up shops and providing a lifestyle experience, rather than just lingerie products. So we are looking into collaborating with jewellery designers, just to offer a point of difference. Also, we had no plans to sell swimwear, but now we’re looking into selling swimwear. We’re also working with social influencers like bloggers to promote the website. There have been a couple of bloggers we have worked with and we do see a spike in sales after they have posted an article. In addition, we’ve been seeking out smaller brands that are not established so that people get a sense of buying something completely different to whatever’s out there. For a smaller retailer like us, this works because we have smaller budgets so we can partner up and work together.
How do you cope with the level of returns you receive as online retailers?
Lauren Thurston: Our returns are higher than they were historically, but I think that’s because people are more comfortable with online shopping nowadays. We’re still quite lucky in that our returns aren’t overly high, but it can be a bit frustrating when we see an increase in sales in a certain product and then see it go down again. I think our returns rate is about 25% across the board. Within that, there are areas that skew the figures. For example, we have a lot of first-time mothers buying maternity lingerie and it can be quite difficult to find the perfect fit. We accept that though because we don’t have the personal fitting service.
Annabelle Mu’azu: Luckily, we haven’t had many problems with returns so far. Out of 10 sales there might be one or two.
What day to day challenges do the physical retailers of this table face?
Lucy Litwack: Staffing is a big challenge. It’s crucial to have the right staff in place in a boutique because that is your point of difference. But it’s hard to find brilliant sales people who are passionate about the brand and are interested in helping the customer. We’re really lucky at Coco de Mer because we have long-standing staff members who really do live the brand and they work with us because they love Coco de Mer, versus just wanting a career in retail sales. There is also the challenge of wholesale margins and offering something new and interesting to attract customers.
Lizzie Faulder: We make a conscious effort to try and bring in new drops each month and we’re working with more pop-ups than we have done before, both within lingerie and nightwear, so that our customer always sees something new. We face the same challenge with staffing too. We’re also lucky in that we have got four members of staff who have got over 10 years of experience in lingerie and one of them is a fit specialist who trained with one of the brands, but when you’re recruiting new team members it can be challenging. We have had a couple of vacancies open for a long time because it’s so important get the right person who will stay with us for a long time. Also, our hours are extending, which means we have our full-time staff stretched over longer hours, so we’re running quite tight mid-week. But still, we’d rather have the right people in than a wealth of the wrong people.
Lucy Litwack: It is hard, and with the nature of what we sell you’ve got to be comfortable selling so many categories to strangers. It’s the same situation in department stores; customers need to be able to relate to the staff and trust them.
Are you concerned about the future of the high street given the recent demise of BHS and Austin Reed?
Lucy Litwack: Not at all. It’s quite clear why certain retailers have disappeared from the high street and a lot of it is to do with the fact that they haven’t evolved with the times or listened to their customers. I don’t think it should read as a concern for the high street as a whole because I think the high street will actually come into its own again. As long as we continue to engage with our customers, I think retailers will survive. It’s about finding the balance between a really thriving high street and a great digital presence, but I think both of them will be just as strong in the future.
Lizzie Faulder: I think the high street has moved on so much in the last five years, but this highlights the stores that have moved with it and the ones that haven’t. We make sure that each year we are investing in new floor layouts, refits and new brands coming in, so we’re moving with the times. I don’t think it’s all doom and gloom based on these two stories, but I think there are definitely lessons to be learned.
Lauren Thurston: I completely agree. Some retailers have not necessarily moved forward, but for the ones that have, they will have a bright future.
According to recent industry reports, lingerie has escaped the sales crash experienced by clothing in recent months. Why do think this is?
Lizzie Faulder: I think lingerie has moved away from being a commodity product into more of a fashion product. Look at Calvin Klein; they have taken a bra and brief and suddenly made it a fashion product. Lingerie is something we will always need, but because it has become more fun and fashionable, I’m not surprised that it hasn’t seen a dip. The fashion brands are expanding into lingerie as well and infiltrating it into the complete look.
Annabelle Mu’azu: It’s become more seasonal as well. Thinking about the West African market, we wondered whether women would be bothered about that, but I’m actually finding that they are. It’s not just about knickers and panties – they want the latest season’s products.
Lucy Litwack: Lingerie always seems to do well in recessions and difficult times of year because people stay in more and spend more time in the bedroom!
Where do you see the future of the lingerie retail sector heading?
Lizzie Faulder: Online will always be an important part of retail, but in store we will have to make sure we continue to engage with the customer. We will also continue to reward loyalty because if a customer is shopping in your store, you don’t want to be offering discounts the whole time to incentivise their purchase, but if you can reward them with things like points or exclusive invites through personalised newsletters, they will keep coming back. We have a Fenwick database and a lingerie database so we can tap into our loyal customers.
Lucy Litwack: I think retailers will need to combine the qualities of the traditional high street, with its heritage and quality, and the innovation, speed and efficiency of digital. It’s all about the experience, both online and offline.
Annabelle Mu’azu: People will want a more tailored and personal experience, whether it’s online or in the shops.