2023 Top Market Trends for eCommerce Fashion Brands

The fashion industry is one of the most dynamic industries?in the world. It adapts rapidly to changes in consumer behavior, technology, and market conditions?as well as changes with seasons.

Due to the growing usage of social media and the internet, the worldwide e-commerce market may be worth $16 trillion by 2027. Yet a large portion of all eCommerce sales is attributable to fashion brands.

Even at the height of the pandemic, when retail sales hit rock bottom, the fashion e-commerce industry still?rose to the occasion. Virtual fitting rooms, convenient delivery, and payment options attracted a wide range of online shoppers.

As the retail industry continued to rebound, clothes and accessories led the way with a 23.1% annual growth rate. This shift in the face of fashion eCommerce paved the way for many new trends as a consequence.

In this article, we’re going to look at some of the top market trends for eCommerce fashion brands and discuss how they can succeed in 2023.

Inside the Battle to Run Fashion’s E-Commerce

With the vast?growth of online purchasing, an industry of e-commerce companies has emerged, promising brands and retailers a fast, smooth, and seamless experience for their consumers across channels and countries. Along?with Shopify, there's?BigCommerce, Farfetch's FPS, Adobe's Magento, and?Salesforce's Commerce Cloud among?others. Which all compete for the opportunity?to do the heavy lifting on?the backend so that brands and retailers can concentrate more?on creating and selling their products. And each offers a different combination of personalized features as well.

E-commerce companies are always adding new services to attract customers, such as improved storefront capabilities, logistics solutions, and other options. According to Ryan Foster, a director at e-commerce agency?Fostr, which specializes in advising fashion and luxury brands on Shopify Plus, what ultimately sets one platform apart from another is typically its flexibility and how much development work is needed on the brand's end.

Challenges Experienced in Luxury E-Commerce

The high costs of managing logistics and software platforms, the fierce price competition brought on by instantaneous comparison shopping, and other long-standing challenges?faced by luxury digital retailers are still present today. And in an economy where investment capital has become more scarce and borrowing has become more expensive, these problems are difficult to ignore.

One way e-retailers are changing their strategy to deal with cash shortages and competition from brands' direct channels is by shifting to e-concessions, in which brands pay commissions for sales through virtual "shop-in-shops" but hold stocks themselves. Although commission top-line revenues are lower for every sale, profitability may be better as e-retailers avoid inventory risk.

Luxury Brands and Augmented Reality

AR is still far from perfect at this time. It can sometimes struggle to map to a user's body, and because of its sensitivity to things like ambient lighting, it can occasionally become glitchy. A lot of the time, AR items appear more comical than realistic. Yet, it is advancing quickly as wireless internet speeds increase and smartphone cameras get better every day.

Both José Neves, the CEO of Farfetch, and Geoffrey Perez, Snap's head of luxury, said that AR can increase conversion rates for products like sneakers, watches, and cosmetics. Perez also?mentioned Dior's use of virtual try-ons on Snapchat to advertise the release of the B27 sneaker as one particularly effective example.?It garnered $6 in sales for every $1 spent on advertising, Perez added.

Fashion’s Dreams for Chat GTP

Large language models, like ChatGPT, are a part of AI. In the case of ChatGPT, they also received some fine-tuning from human supervisors. What sets them apart is their capacity to carry out a variety of diverse tasks. The data that a model like ChatGPT is now trained on is often whatever is publicly available online, but when companies start integrating the tools with their own data, they are likely to start holding the greatest business potential.

Conversational AI may influence how customers discover new things if it starts to change how people search online. Customers may merely assume the search engine will digest all the information available and deliver an answer directly, as opposed to searching for something like "best-running sneakers 2023" and then looking at lists generated by various websites.

Luxury Brands and Resale-Ready Products

For efforts to move consumers to more responsible forms of consumption and big brands?to healthier business models, digital IDs are considered a game-changer. The idea is that consumers might get in-depth information about the eco-credentials of their clothing as well as handy advice for maintenance and repair by just scanning a QR code. To smooth out the hitches that currently result in so much clothing ending up in landfills, brands might link their customers to resale sites—and eventually, recycling alternatives. Similarly, companies like GardeRobo AI are offering smart QR codes for a more personalized in-store experience that show complementary items to purchase. Discover more here.

Although many companies are exploring the technology, its?implementation has been slow and relatively limited?in focus. While the technology needed?to roll out?digital product labels is straightforward, getting the data required to support them is not, which is also a part of the challenge. Brands must take control of their full?supply chain and begin gathering a range?of technical data on environmental effects in order to truly realize their objectives to create more transparent and circular business models. The majority now have a relatively small audience outside of their manufacturers.

Ownership Means A Lot to NFT Shoppers

In February, a federal jury in New York found in favor of Hermès after concluding that Rothschild's "MetaBirkin" non-fungible tokens (NFTs) violated the fashion house's trademark of its Birkin bag and did not, as Rothschild claimed, meet the legal requirements for artistic expression to be protected by the First Amendment. The question of whether customers were actually tricked will always be up for debate, but it is undeniable that this has raised their awareness?of the idea of digital ownership.

Around two-thirds of respondents in a poll of consumers in the US between the ages of 15 and 56 conducted by luxury research company Altiant on behalf of BoF Insights evaluated digital ownership as crucial. Consequently, fashion brands should start developing their digital strategy now to reflect the fact that ownership will become increasingly important to their customers as blockchain-based assets start to gain more mainstream acceptance.

Fashion E-Commerce and Video Games

Games today offer more than just entertainment. They have their own cultural influence in some way. The young people who used the first home consoles as children are now older adults with money to spare and happy memories of playing their favorite game characters. Games are on equal footing?with music and movies for younger generations, whose media diets are?as much YouTube and Twitch as television. Recently, [Deloitte] discovered that viewing TV and movies at home was still older groups' preferred form of entertainment, but not for Gen-Z.?

A growing share?of fashion sales is being made by this gaming generation. For instance, Bain & Company reported that Gen-Z and Millennials were responsible for all of the market's growth in its 2022 luxury market recap and that the “spending of Gen-Z and the even younger Generation Alpha is set to grow three times faster than other generations’ through 2030, making up a third of the market,” the authors wrote.

Final Thoughts

The fashion industry has demonstrated a remarkable capacity for recovery despite COVID-19. Brands have changed the way they approach marketing by leveraging data and technology to their fullest potential. Competition between retailers will more likely become more fierce?as eCommerce continues to evolve?more and more every day. The ones that thrive will be the ones that choose to keep their eyes on the ball and track trends carefully. Also, staying on top of information could help take your fashion eCommerce store to even greater heights this year.

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