Fashion retail: playing by the new rules
Technology is rapidly transforming fashion retail. The lifestyle of the grown-up millennial generation is changing consumption. Classic marketing no longer works, and retailers are forced to rebuild and look for new points of contact with customers.
How to respond to the challenges of the time, transform business and trade formats, how to attract buyers – these issues were the subject of a public talk held in Moscow by specialists of WGSN Group: Kim Mannino, Director of WGSN Live, and Irina Kushnerevich, Regional Director WGSN for Central, Eastern Europe and Russia. The meeting, held at the department store "Color", was organized by Fashion Factory School.
MILLENNIAL GENERATION
Generation Y, which includes those who were born in the period from the early 80s to the late 90s, has turned into active buyers. Millennials' lifestyle is changing consumption. Retailers have to adapt to the preferences of a new audience, establish a dialogue with it and learn to sell.
Young people have been through several economic crises and, as a rule, live in large cities. The majority of this generation rents apartments and is unlikely to ever acquire their own. In 2026, 60% of millennials who have settled in world capitals will rent housing. This factor, according to Kim Mannino, is the key to understanding modern consumers. Rent changes are already pushing young people to move frequently, forcing them to adapt to different spaces. Too many things complicate their lives, and they prefer to buy less.
Millennials, who spend up to four hours a day watching mobile phone screens, are largely influenced by social media, which form the purchasing preferences of this generation.
Concern about the state of the environment, for example, the economy of natural resources and the environmental friendliness of production also has a noticeable impact on young people. Most of them do not want to harm their own planet by consumption. So, as Irina Kushnerevich noted, they feel guilty when purchasing goods in plastic packaging that decomposes over too long a period, and also turn away from companies that exploit people as slaves.
Generational change brings retailers not only additional problems, but also opens up new opportunities. Millennials are attracted to emotions and impressions associated with the process of making a purchase, and they are willing to pay for a unique experience that interests them no less than the product itself. This requires rethinking the rules of the game and changes in business.
TECH RETAIL
Many large retailers are transforming their business, betting on technologies that now affect the quality of communication with customers, the ability to reach millennials and the ability to withstand competition.
Considering technology as a key aspect that allows to increase efficiency and improve service, the founders of the fashionable German online retailer Zelando have reorganized the business. Their goal was to create the best technology company in Europe, capable of responding quickly to changes in customer behavior and innovation. In this regard, the staff of IT specialists was increased more than three times, while the team of designers and buyers was not invested.
The change in organizational priorities is also emphasized by William Kim, CEO of All Saints, who emphasizes that no fashion company will outsource the work of the design team, wondering why such a step is still possible in relation to the IT department.
Other well-known companies are also investing in technology, among them the OTTO Group, which innovations help compete with such giants as Alibaba and Amazon.
The introduction of technologies allows retailers to move step by step to a qualitatively new level of service. For example, a large American chain Walmart has developed a special mobile offer for its trading halls, using which visitors avoid queues and pay for purchases online.
And finally, there was a retail space in which there are no cash desks and queues. At the end of last year, the company Amazon opened an offline store Amazon Go, which is logged in using a special smartphone application. Then the buyer can take any goods he needs, placing them in bags, bags or even pockets. The amount spent is debited from the client's account at the moment of leaving the hall through the turnstile.
To be continued.
Author: Elena Varnina
Photo: Shutterstock.com
