Fashion and Apparel, and Luxury Brands in 2021: eCommerce and Direct-to-Consumer (DTC) Strategy and Insight

It is a given that brands must stay up-to-date with trends and remain accessible to consumers to be profitable. Without consistent upkeep to stay knowledgeable concerning the latest social developments and applying this knowledge to product creation and marketing, consumers naturally lose interest in a brand. This principle applies to our increasingly online world (encouraged to be more so by the COVID-19 crisis) – companies are given direct access to the eyes of consumers via social media and other virtual venues, which they take advantage of in order to stay relevant. A plethora of brands in the fashion, apparel, and luxury spaces have done so by moving into or expanding upon direct-to-consumer (DTC) and eCommerce in three key ways: bringing operations in-house, utilizing high-traffic social media networks, and offering greater levels of interaction and engagement on the digital front.

G & Co. Digital Experience Agency & Consulting Firm, Global Fashion Industry Index, Fashion Industry Analysis, Fashion Market Report, Fashion Industry Insights, Fashion Industry Trends, Fashion CMO Surveys, Fashion Executives

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Playing it Direct-to-Consumer (DTC): Fashion and Apparel Brands Bringing Operations In-House

Due to the rapid travel of information over social media, trends are becoming more volatile. Since styles are set more by individuals (celebrities or social media influencers) than fashion companies and consumers learn about these styles almost instantaneously, the apparel industry must be adaptable and nimble in order to fulfill the rapid rise and fall of these particular demands. One way to do this is insourcing – bringing operations in-house.

Over the last decade, there has been a rise in adopting a direct-to-consumer approach through insourcing among fashion, apparel, and luxury brands in order to accommodate for fluid trends and stay ahead of the curve of an increasingly digital landscape. Although most brands don’t dedicate operations to be 100% at home nor abroad, the benefits insourcing offers have led many brands to slowly pursue this route. Tech giant Apple and apparel brands Abercrombie and Levi’s are bringing production back to the United States, and luxury fashion brands Burberry, Gucci, and Louis Vuitton have reintegrated their own in-house operations.

Case study: Louis Vuitton has doubled down on investing in both eCommerce and its own direct-to-consumer approach

The benefits are clear: faster turnaround for projects, ease of communication, and direct control of operations. Insourcing also increases the sustainability of a company’s business model. For example, in-house operations mean reducing the amount of worldwide transportation required for the fashion and apparel brand. This also means these same brands accomplish sustainable goals by cutting shipments sea and air, reducing their damage to the environment.

Overall, bringing operations in-house has led to some companies’ digital campaign launch rates jumping from 20% to over 80%, luxury fashion brands preserving their personification of exclusivity through at-home production, and a promise kept to sustainably-focused consumers. In an especially key way, adopting more of a direct-to-consumer approach has allowed brands to remain buoyant and relevant throughout the rapid life cycles of different trends.

Fashion and Apparel Brands’ Digital Strategies Tap Into High-Traffic Social Media Marketing  

The vast majority of today’s socioeconomic trends are digital. As mentioned before, this means that brands must adapt to and take advantage of the digital, ever-present connection they have with consumers by utilizing social media to their favor. This requires a thoughtful, consistent presence on each significant social media avenue and a strategic endeavor to create content for the networks with the most traffic and the most relevant target demographics, including newer platforms with massive potential.

Top fashion and apparel brands are taking advantage of more social media networks as effective channels for marketing. Just to name a few brands’ endeavors into these networks: Nike ensures that they are at the forefront of sports tournament conversations, celebrating athletes on every platform with ad campaigns that frequently go viral; H&M has more than 8 million Twitter followers to whom it consistently showcases upcoming collaborations, such as the 2021 collaboration with denim brand Lee; and Prada collaborated with TikTok influencer Charli D’Amelio during Milan Fashion Week 2020, bringing brand recognition to a younger audience on the most successful new social media network of the last few years. Creative tweets, funny or insightful TikToks, eye-catching and shareable Instagram posts, Instagram, Snapchat, and Facebook stories that provide a behind-the-scenes look at the company, and paid ads are all methods these brands use to retain consumer engagement and increase brand awareness. In a market that’s increasingly driven by how well a company can attract and possess attention, we can only expect for fashion and apparel brands to continue permeating every platform utilized by a customer or prospect. 

Case study: Nike's investment in its DTC strategy have already paid off, with developments in customer experience only expanding

Already, the fashion and apparel brands that have taken a holistic and dedicated approach to social media marketing have only reinforced their devotion to their digital strategies, with even more than 70% of fashion and apparel executives saying their brands’ social media usage is likely to increase. Market analysis and consumer behavior indexes show 4.3 billion people are active on social media, with 54% of those users using these networks to research products. Fashion industry reports and CMO surveys show 90% of marketers say social media marketing has increased their brands’ exposure, and 75% say it has increased website traffic. Ultimately, tactful and well-budgeted social media usage has primarily helped fashion and apparel brands captivate today’s consumers’ attention and will be a staple to any fashion marketing executive looking to utilize the most technologically equipped tools available to build customer affinity.

The New Fashion and Apparel Digital Strategy: Integrating Online with Offline

One of the most crucial ways in which apparel and luxury brands are staying on-trend and ahead of the curve is by offering greater levels of interaction and engagement on the digital front. This means having an omnichannel approach that integrates with a fashion brand’s eCommerce strategy in various avenues. At a time when in-person store visits were--and are, to some extent, still--limited, and half the global population has online access, brands must tap into a fortified digital strategy that complements their physical retail presence

Though many fashion executives have made the costly omnichannel mistake of treating their offline and online strategies as separate matters, nearly every one of them now understands—after a tumultuous last few months—that the two should be a product of a consistent and accessible approach to a consumer-centric strategy. The result of this wave of enlightened understanding is widespread adoption of the direct-to-consumer (DTC) eCommerce model, where fashion and apparel brands exert greater influence over their operations, and essentially, better control brand image and perception by owning their channels. 

Through a DTC eCommerce approach, brands can ensure that their message and mission are not diluted through third-party merchants. For example, Nike recently began investing more into their DTC strategy to better establish its roots with consumers, accompanied by its strong web presence–the latter of which allows for tailored product recommendations and personalized experiences, something 75% of consumers today wish to see from brands they shop with. Brands can also offer consistency in promotions, prices, and the checkout process, encouraging customer satisfaction and loyalty for a shopping experience companies like Nike enjoy greater control over.

The other key benefit of DTC eCommerce is its accessibility. By crafting the digital shopping experience like a physical one, integrating online and offline categories ensures that everyone can shop their selections without barriers. Health concerns (such as the COVID-19 pandemic), disability, inclement weather, or even extensive physical distance are all among the barriers preventing many consumers from reaching a brick-and-mortar establishment and provide all the more reason for developing a strong eCommerce model. By digitizing a seamless browsing experience, providing accommodating customer assistance, and an intuitive checkout process, a brand’s site becomes more accessible to more customers across global boundaries. 

Logically, the more consumers can shop, the higher the increase in profitability and brand awareness. Additionally, digital venues allow for straightforward data collection and analytics. Companies can see exactly which consumers are shopping and which aren’t, what they’re shopping for, how they’re shopping and make the necessary marketing adjustments to provide for a greater user and customer experience.

These eCommerce and DTC strategies – centralizing operations by insourcing, tactful social media marketing, and integrating online and offline approaches – take advantage of the rapid rise of the digital age and allow a brand to be responsible for itself without heavy reliance on third parties, increasing customer loyalty and brand recognition. While most who had heard of the term “DTC” often attributed it to the fast-rising upstarts like Warby Parker, Glossier, and the like, the most technologically adaptive and best-performing brands to come to know in the direct-to-consumer space are those large enough to seize more of the gains for themselves as the fashion and apparel landscape becomes more consumer and experientially-centric. 

What does it mean for fashion, apparel, and luxury brands to adopt a direct-to-consumer (DTC) strategy as part of their eCommerce and omnichannel efforts?

For a fashion, apparel, and luxury brand to adopt the DTC business model as their overall business strategy, it signals its intent to want to narrate more of the brand experience for themselves over that of a third party or intermediary. In a world that will continue to be largely defined by how well a brand is able to appeal to consumers, captivate their attention, and retain a high degree of satisfaction to render loyalty, it only makes sense that the top-performing brands will want to better control each of these factors for a well-rounded experience and excel beyond any one of their competitors.

What DTC insights are there to gather from the fashion, apparel, and luxury world?‍

The fashion and apparel brands that were once averse to the online world have now come to embrace eCommerce as consumer behaviors point to a vast increase of digital transactions. A quarter of luxury goods are expected to be sold online according to market reports and industry index insights. Of course, this pivot to include more digital innovation means more brands have adopted direct-to-consumer (DTC) strategies to gain a significant share of their sales back from retail and wholesale partners, where they can control the narrative and command every point of interaction consumers have with their shopping experience. The strengthening of eCommerce strategies and direct-to-consumer (DTC) approaches to follow will lead to more personalized user experiences and higher levels of customer affinity to brands. 

Why is it important for fashion, apparel, and luxury brands to invest in their eCommerce strategies?

It is not optional for fashion, apparel, and luxury brands to have a strong eCommerce presence. Consumer behaviors have turned more towards online shopping in the last few years and show no signs of slowing. Market analysis shows that brands that do not just invest in their eCommerce strategies but consider them integral to their overall approach in engaging consumers have a clear advantage over their digitally feeble counterparts. 

To best engage with consumers today, eCommerce strategy for luxury brands must adapt their current methods for a more immersive omnichannel approach. The tide of digital innovation does not mean the extinction of in-store experiences. On the contrary, a brand must leverage the accessibility and convenience found in eCommerce approaches with that of the in-person interactions that build up consumer sentiment and affinity to a brand. The most encouraging indicator for omnichannel brands is that people value expedience and experience; those fashion, apparel, and luxury brands that provide both can rest assured their physical retail and digital strategies will pay off.

How do user experience (UX) design and user interface play a role in luxury, fashion, and apparel brands’ eCommerce and DTC strategies?‍

The top-performing luxury, fashion, and apparel brands know all too well that experience drives revenue. In a digitally connected world, consumers appreciate brands that offer them the utmost convenience possible. It’s why the most innovative brands in the fashion and apparel industry, as we rank them in our Industry Index and market analysis, make a large point about their online presence. The most successful luxury, fashion, and apparel brands of the last few months have all committed themselves to incorporate digital capabilities into their overall eCommerce and omnichannel strategies. Of course, allowing consumers to navigate a brand’s catalog and interact with their wares beyond the rudimentary touch-and-point engagement is what brands must do to excel in this increasingly digitally savvy and competitive age. ‍

What should CMOs and other c-level executives consider as part of their fashion playbook when it comes to DTC and eCommerce strategies moving forward?‍

Fashion executive and CMO surveys, core research insight reports, and global fashion indexes done in the last few months point to a few key things: consumers want brands that work to provide a state-of-the-art shopping experience, take an active role in socially conscious activities such as sustainability, addressing institutional discrimination, and expanding opportunity, and better connect with them in more relevant ways. In sum, consumers expect fashion brands to personalize their direct-to-consumer (DTC) and eCommerce approach for an optimal shopping experience, be it online or offline. 

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