Omnichannel Retail: From Indifference to Emotion

Moving Past Transactional Experiences in Fashion Apparel

In as far as current omnichannel adoption has proven merit, fashion apparel as a category has seen little added or new value since becoming multi-channel organizations. Mature leaders like Neiman Marcus, Macy’s, and Gap Inc. have all fallen to comparable revenue, share price, and market cap. Yet it remains a top retail category with enviable margins and a growing swell of new brands and formats. So why then haven’t these merits which helped other categories outperform the market, like eyewear (Warby Parker), electronics (Best Buy), home improvement (Home Depot), grocery (Loblaws), and pharmacy (Walgreens), done the same for fashion apparel?

We are still laggards in growth.

Part of the answer lies in the digital evolution of retail. It has always been difficult to sell clothes online. Despite being the top catalogue category in 1994, even Amazon launched with books and its efficient capacity to be communicated on a screen. The tactile attributes of fashion’s fabric and physical fit were large friction points then, and even today. Yet over two decades later of digital development and customer data, including online reviews, optimized product visualization, efficiencies in communication (social, mobile), try-on subscription services with zero commitment, and free shipping?—?our work continues on a validated sustainable model. Where Amazon is flexing on the market through speed and choice, cost pressures in logistics and customer acquisition are constricting pure-play growth for the rest.

The best model from the multichannel complex includes a breadth of physical store locations, savvy logistics, dynamic bricks + clicks experiences, and channel maturity (best in class 70/30% split offline to online). It turns out, this still isn’t much better. Growth remains elusive for all of us.

Surely, not for lack of trying. Perhaps the complexity of fashion apparel is that it’s an emotional category rather than a transactional one.

Where transactional categories are those with primary attributes of function, high utility and low friction. These are products of rational desire, like toilet paper, toasters, and tires. And fashion apparel? Well, beyond purposes of covering required by social norms or protection from external temperature and elements, clothes are products of irrational desire. Things like trend, detail, and mood govern its direction. Emotional categories then are personal, high fidelity and value expressive benefits.

By and large, the omnichannel best practices in fashion apparel today are counter-intuitively, transactional experiences.

Seamless is the descriptor most associated to transparent real-time inventory, ship from store, click and collect, return to store, and endless aisle?—?though essentially all are objectives of fulfillment. And granted, these add value by lowering friction in the customer purchase journey, however the perspective remains an underlying notion of indifference to where the sale comes from.

We can buy on our phones when we’re mobile; on our desktop when we’re home or the office; in the store when we’re local?—?no matter. Such that merchandise is agnostic and optimized across channels for best execution of margin dollars. At best, we reach some degree of channel parity.

This strategy of indifference is not only struggling to produce comparable results, or is detached from the emotional nature of the category but I would argue, isn’t truly customer-facing. And as such becomes a short path to commoditization?—?a space where we are competing on price and discount-driven volume?—?a welcome to the middle ground.

Yes, seamless experience capabilities are the new cost of entry?—?our multichannel green fees, which allow us to play not necessarily compete.

What’s left after this? Well, we could leverage those attributes of an emotional category, as a competitive advantage. This will allow us more naturally to see past increasing commoditization and move from transactional experiences towards those rooted in emotion?—?narrative based, transformational, rich in feeling?—?after all, human-centric design and experiences are always customer-facing.

Those brands that have told their stories while driving the levers of content, social, and service have also driven engagement. It’s about facilitating these opportunities where brand and customer can participate together, contribute to the culture, and of service that enables a more meaningful outcome of brand values. A type of commerce which allows for transformation, benefiting a lasting impression, is going beyond the transactional.

Consider two recent entrants into the category who are inconspicuously stealing share and wallet, but also powerfully shaping customer expectations. Apple, by virtue of their fashion strategy, most notably with Apple Watch and their transformation of computer products (historically a transactional category) into an emotional category, is now legitimized at the top end price markets. Amazon meanwhile remains active, strengthening market clout sponsoring New York Fashion Week and capturing the vertical benefits of private brands, recently launching a mid-price line. Fashion apparel is now their fastest growing category.

Simply, the playing field is levelling. The shifting pace of change is pushing out boundaries, forming a new middle poorly positioned for sustainability where creating value requires a different measure of originality. The shot call here is from a known playbook, where the problem solver is design, change and iteration are just seasons, and the goal is inspiring a feeling about yourself and the world around you. Create, transform and stand out?—?fashion can be pretty powerful stuff.