The industry is at a turning point
Total retail sales have dropped to levels not seen since the 1991 recession, with consumers feeling the squeeze from stagnant wages and higher household debt. A string of Australian-owned fashion retailers have buckled in recent years, including the recent collapse of Bardot and Harris Scarf in December.
Many retailers have turned to e-commerce as the source of growth, which is currently worth $28.6 billion in Australia and expected to rise by a further +15% in 2019.
Fashion has been a key winner for this growth, accounting for 35% of all online sales. But online competition, particularly from overseas retailers and brands, has risen rapidly. Pure fashion players are also feeling the pressure from multi-category retailers, like Amazon and Target, aggressively pushing into the fashion space.
In this feature, Hitwise reflects on the key shifts occurring in the online fashion landscape and details what these trends mean heading into 2020.
Top Learnings from 2019
1. Fashion categories saw different levels of online growth
The number of people shopping online is predicted to rise from 81% of the Australian population in 2019 to 85% by 2021. But this growth isn’t across the board when it comes to individual fashion categories.
Total Online Visitors by Fashion Category
|Outdoor & Sportswear||3.3||-3.9%|
|Jewellery & Accessories||1.8||-0.1%|
Source: Hitwise, AU. Categorisation based on top 150 domains in Hitwise Shopping & Classifieds – Apparel & Accessories industry. September-November 2019 YoY.
From September to November, visitors to Fast Fashion, Mid-tier and Luxury sites have slightly dropped YoY. Australian-owned brands saw mixed results too. Mid-tier labels, like Jacqui E, Portmans and Decjuba, grew by over +20% in online visitors *. But Fast Fashion labels, like Valleygirl, Sportsgirl and Factorie, declined by more than -10% this year.
In contrast, specialist categories in Footwear, Outdoor and Sportswear have risen overall. This included a mix of local retailers, like Rebel Sport and Spendless Shoes, as well as overseas players, like Decathlon and JD Sports, reaching over +10% lifts in online audiences.
* Online Visitor Change = Compares Average Visitors Per Month, over the period Sep-Nov YoY
2. When consumers are online, they’re visiting fashion sites more often
Despite drops in visitor growth, all categories have increased in online engagement. This means that when Aussies are online, they’re visiting fashion sites more frequently than last year. Mobile has been key to this increase, as all categories saw an uptake in visits from mobile devices compared to desktop.
Average Visits and Mobile Rates By Fashion Category
|Category||Average Visits |
|Outdoor & Sportswear||5.4||+13%||54%||+29%|
|Jewellery & Accessories||5.1||+11%||61%||+17%|
Source: Hitwise, AU. Categorisation based on top 150 domains in Hitwise Shopping & Classifieds – Apparel & Accessories industry. September-November 2019 YoY. Average Visits Per Month Per Site and Average Mobile vs. Desktop Rate Per Site.
The biggest uplifts in both average visits and mobile rates came from Fast Fashion and Luxury categories. In 2018, the average person visited a Fast Fashion or Luxury site 4.8 times a month. This had grown to 5.5 times a month in 2019. Mobile rates for these two categories also rose by over +20% compared to last year.
3. Multi-category retailers are pushing successfully into the fashion space
Kmart made a splash back in October with their new summer clothing collection, Summer Daze. Target launched its own designer underwear collection in December, heralded as very chic but also very affordable. Amazon offered over 50% discounts on top brands like Calvin Klein, Nike and Adidas on Black Friday.
As online retail grows, multi-category retailers are vying for more fashion spend. The number of visitors to the Top 6 sites, which include Amazon, Target, Big W, Kmart, Myer and David Jones, grew +8.1% YoY to reach over 9 million in September to November.
The overlap between the Top 6 and fashion sites has risen, especially for Fast Fashion, Outdoor & Sports and Jewellery & Accessories. In other words, there is growing risk from multi-category retailers, particularly as they release successful clothing lines and heavily discount top brands.
Top Tactics for 2020
1. As a retailer, monitor your audiences at risk
Firstly, retailers need to understand how many of their customers are also visiting and buying on competitor sites. With this knowledge, they can gauge their audiences at risk.
ASOS vs Amazon
Audience Overlap & YoY Change
Source: Hitwise, AU. September-November 2019. * YoY Change in visitors & buyers.
For example, ASOS’ overlap has increased significantly against Amazon. The fashion retailer saw a decline in visitors and buyers over September to November YoY, whereas Amazon’s audience spiked over this same time period. The number of ASOS buyers that purchased on Amazon’s site rose by +52% as well.
So by tracking this overlap, ASOS can immediately identify who and why they’re losing their customers to.
2. As a brand, understand your share of voice within retailers
Secondly, brands need to look under the hood within retailer sites and track how they perform against their peers. This need will only grow in 2020 as multi-category retailers edge further into the fashion space.
Fashion Page Views, MoM
Source: Hitwise, AU. Page views on Myer. Oct 2019 MoM.
For example, Forever New tracked a +20% MoM rise in page views on Myer’s site in October. Whilst positive, the majority of Myer’s own brands had actually generated larger MoM lifts, particularly Tokito and Basque.
Seeing this situation, Forever New could then decide: a/ should they push more promotions on Myer to grow share, or b/ look elsewhere and prioritise their own direct sales or other partners.
3. Stay close to fast-moving trends
Finally, when consumers are online, they’re visiting fashion sites more frequently and doing so on mobile devices. To capture their attention, fashion retailers need to monitor their changing interests and demands.
For instance, functional and comfortable clothing were in over November. The number of people searching for “cargo pants”, “balloon pants”, “bucket hats” and “Birkenstock” grew by over +200% YoY. Sequin, leopard print and wrap dresses were out, with searchers for these items declining by over -40% YoY.
Search then becomes a vital source of information to track what’s resonating and what’s growing rapidly among consumers.
Make Digital the Top of Your Agenda
The online channel brought a much-needed boost to the industry in 2019. But some categories are facing a slowdown and challenges are mounting with increased competition.
To get ahead in 2020, fashion retailers and brands need to understand their consumers inside-out. Data into how customers search for fashion trends, browse for brands and products, and purchase across different sites, can help close this gap.
Appendix – Methodology:
Fashion Categorisation = The top 150 domains in Hitwise Shopping & Classifieds – Apparel & Accessories Industry have been categorised into sub-verticals – Fast Fashion, Mid-Tier, Luxury, Outdoor & Sportswear, Jewellery & Accessories, Footwear and Other.
The analysis on Online Visitors, Engagement and Mobile Rates per Fashion Category covers September-November 2019 YoY.
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