Table of Contents
List of figures
List of abbreviations
1.1 Research aim and objectives
1.2 Structure of the thesis
2. Literature review
2.2.1 Historical aspects of fashion
2.2.2 Fashion of today
2.3 The impact of digitalization in the fashion industry
3. Fashion and marketing
3.2 The evolution of digital fashion marketing
3.3 Marketing channels
3.3.1 Paid media
3.3.2 Owned media
3.3.3 Earned media
3.4 The marketing mix
3.4.7 Physical environment
4. Technological developments in the fashion industry
4.2 Mobile integration
4.2.1 Mobile shopping
4.2.2 Mobile scanning
4.2.3 Augmented reality
4.2.4 Location based services
4.3 Physical store integration
4.3.1 Interactive shop windows
4.3.2 Digital signage
4.3.3 Virtual fitting rooms and interactive mirrors
4.3.4 Magic mirrors
4.3.6 3D scanning
4.4 Online store integration
4.5 Social media integration
5. Research Methodology
5.1 Background survey
5.2 Survey results
5.2.1 Customer segments
5.2.2 Consumer findings
6. Conclusion and discussion
6.1 Main results of the research
6.2 Suggestions for future research and recommendations
6.3 Limitations of the research
7. List of references
7.1 Literature sources
7.2 Online sources
8.1 Appendix A – Questionnaire
8.2 Appendix B – Results from the survey
Digitalization is a big part of the everyday lives of fashion consumers. In the past decades, rapidly accelerated globalization and technological developments, among other major changes in society, have modified the overall behavior of consumers. The purpose of this study is to identify the impact of digitalization on consumer behavior with particular reference to the fashion retail industry. To answer this, the thesis will analyze the ongoing trends of fashion retail businesses all over the world and the attitudes and opinions consumers have towards fashion and how ever-developing digitalization affects their fashion experience. This thesis will also clarify how the leading fashion retailers are implementing digital transformation into their business models. The main objective of this thesis will be achieved using literature, existing sources, surveys, and reports. The results of the research suggest that digitalization has a huge impact on consumer behavior in terms of fashion. Based on the results, the thesis will then present recommendations for fashion retailers so that the marketer and the customer can reap the advantages of digitalization.
List of figures
Figure 1: American Apparel – augmented reality application [McQuarrie 2013]
Figure 2: Nike – interactive shop window, London, UK [BWD, s.a.]
Figure 3: Burberry - digital signage [Retail Innovation 2013]
Figure 4: TOPSHOP - virtual fitting room [Retail Innovation 2013]
Figure 5: Age group of respondents [own graph]
Figure 6: The importance of fashion shopping [own graph]
Figure 7: Digital service - click & collect [own graph]
Figure 8: Digital sales advisors [own graph]
Figure 9: The influence of online product presentation [own graph]
Figure 10: Digital Payment Methods [own graph]
List of abbreviations
cf.: Confer p.: page pp.: pages Ed.: Editor
Abbildung in dieser Leseprobe nicht enthalten
A digital era of information has entered society, distinguished by rapid transformations in the kinds of technological mediation through which people encounter one another [cf. Baym 2015, p.5 ]. The digital revolution has changed the rules, personal relations, business, communication, and the way everyone uses their time. Moreover, the impact of technology is always associated with achieving greater freedom, creating at the same time dependence that has changed how people engage with the world. Sociologist and economist, Manuel Castells, believes that people, companies, and institutions feel how profound this technological change is “but when closely examined through rigorous empirical research, the speed and scope of the transformation turns out to not be exact” [cf. BBVA 2017].
Furthermore, digitalization is the driving force behind the retail sector, making shopping more convenient, more enjoyable and more cost-effective. The rise of innovation and digitalization in retail has altered the face of the industry, becoming more and more symbiotic [cf. Ralph 2018]. This transformation has been set in motion by greater adoption of the internet by the general public on a global scale, which has forced retailers to develop e-commerce strategies and incorporate the multi-channel approach into their business models [cf. Geyskens 2002]. Additionally, a seamless shopping experience created by omni-channel retailing links multiple channels, from online to mobile to in-store. For example, many households nowadays contain a smart speaker or assistant, such as Amazon’s Alexa device that can make this experience even easier [cf. Walsh 2017].
The fashion industry, which ranges from global discount retailers to exclusive luxury brands, drives a significant part of the global economy. Fashion is one of the most challenging fields, highly captured by global economic uncertainty as well as distinct trends and industrial changes. In response to the pressure for growth and cost efficiency, the global fashion industry is moving into a decisive phase of digital adoption by the mainstream consumer. As electronic commerce becomes the engine of growth, fashion brands continue to accelerate digital investments to keep up with globalizing commerce [cf. Lay s.a.]. The modern shopper’s comfort with digital channels and content has changed the consumer’s purchasing journey from a traditional linear model to a complex journey across online and offline touchpoints. But regardless of touchpoint, consumers expect a consistent brand experience at all times [cf. Amed 2017]. Developments in digital content and customer experience have reached an extent as never seen before. Besides this, technology is playing an increasingly important role in consumer engagement and loyalty and without a clear digital vision, traditional retailers risk irrelevance or even extinction [Vernocchi 2012].
1.1 Research aim and objectives
Due to technological developments that have spread all over the world, the traditional concept of marketing has transformed into a digital mode that brings a whole world to the customer’s doorstep in just one click. The increasingly penetrative nature of the internet as well as various high-speed digital communication channels, wider networks and new devices and their connection with marketers have made consumers more knowledgeable about the value they expect in return for the cost incurred [cf. Rathnayaka 2018]. The purpose of this study is to identify the impact of digitalization on consumer behavior with particular reference to the fashion retail industry. This thesis will analyze the ongoing trends of fashion retail businesses all over the world. This thesis will also clarify how the leading fashion retailers are implementing digital transformation into their business models. The main objective of this thesis will be achieved using literature, existing sources, surveys and reports. It is important to summarize the challenges correctly and clearly, as well as to describe them in detail.
The main research question of the thesis can be briefly summarized as follows:
How does digitalization in the fashion industry affect consumers’ behaviour?
By using empirical analysis to answer the research questions, it will be possible to share valuable insights into digitalization in the fashion industry. The empirical research of the thesis focuses particularly on consumer behavior in fashion and the current attitudes, consumers have towards the modern clothing industry. The research question will be answered by examining these attitudes, considering different opinions and developing the overall idea of fashion consumers. The thesis takes the consumer perspective into consideration and examines the attitudes and emotions that fashion and new innovations arouse in them, making this particular approach to the topic quite unique. The empirical research is complimented by the theoretical analysis, which researches the subjects of consumerism and fashion development and creates a timeline from the beginning of the fashion industry until this moment in order to better understand the changes.
1.2 Structure of the thesis
The thesis starts with definitions and detailed explanations of digitalization and fashion and its impact in the retail and fashion industries. It will also cover the main synonyms, so that the reader is able to understand the topic clearly. The section mentioned above will be followed by the literature review. The main objective of the literature review is to find the most relevant literature and information about the topic. The literature analysis will be divided into subparagraphs, which will each examine a digital marketing communication challenge separately. In addition, the introduction will outline the most relevant terms of the topic. After going through the main ideas and concepts of the thesis topic, the existing technological developments in the fashion industry will be discussed. The aim of this section, will be to explain to which organizations the topic of digital marketing communication challenges relates.
After the theoretical framework has been examined, the methodology and process of analysis will be presented. The possible research methods will be considered and it will be also clarified as to why qualitative research method have been chosen. In the empirical part of the thesis, the results of the survey will be further analyzed. In addition, the responses will be discussed within the theoretical framework of this research.
The final chapter of the thesis will introduce the main conclusions and the discussion. In this chapter, the main findings will be presented and the future research topics suggested.
2. Literature review
Nowadays, every aspect of people’s lives is swept across by digitalization. Living in a dynamic world where speed is of the essence and transformation is the key to success, digital technology is making tasks faster and more accurate [cf. De-Fontenay 2011]. In many ways, the 21st century is different from the previous ones as digital technology is growing in a way that everyone becomes part of the change: “The future which used to be a destination that we marched toward-has arrived” and brought new changes with itself [Rushkoff 2013 in Clendaniel s.a.].
In literature, the terms ‘digitization’, ‘digitalization’ and ‘digital transformation’ are frequently used interchangeably. Brennen and Kreiss  indicate that ‘digitization’ can be referred to as “the specific process of converting analogue data streams into digital bits” and define ‘digitalization’ as “the way in which many domains of social life are restructured around digital communication and media infrastructures”. MIT Center for Digital Business in collaboration with Capgemini Consulting firstly defined digital transformation as “the use of technology to radically improve performance or reach of enterprises” [Westerman 2011, p. 5]. Similarly [Stolterman and Fors 2004, p. 689] specify that “digital transformation can be understood as the changes that digital technology causes or influences in all aspects of human life”. From another perspective [Lankshear and Knobel 2008] describe digital transformation as the final level of digital literacy. At this level, digital technologies enable innovation and creativity, and stimulate significant changes in professional and knowledge domains. All of the above definitions are holistic by nature and do not break down digital transformation in specific technologies and specific changes. One aspect that becomes apparent is that digital transformation does not entail gradual incremental changes but fundamental “radical” changes due to digital technologies. Evidentially using a new digital technology within an organization does not necessarily mean that an organization undergoes digital transformation, i.e. a fundamental radical change.
The industrial revolution that swept across the world had established a base for an economy that was dependent upon manufacturing. Nevertheless, during the industrial revolution, the manufacturing processes changed. Many manual production methods were substituted by machines, machine tools were developed, and the use of steam power became significantly widespread. This opened the way for the second big “revolution”, which led to the rapid extension of roads, bridges, ports, and canals. The third revolution changed the economy of the whole world with transcontinental trade and travel by rail and steamship together with international telegraphs and electricity. The forth wave revolutionized transportation with the automobiles [cf. Perez 2002, pp. 10-11]. What all of these revolutions have in common is the fact that they all led to a massive replacement of one technology with another. [Perez 2002, p.4] further argues that “each involved profound changes in people, organizations and skills in a sort of habit-breaking hurricane. Each led to an explosive period in the financial markets.” A similarity can be observed between the four major technological revolutions and the digital one. They all underwent development over the years, starting with an initial eruption. However, 1965 can truly be called the year of the premise for the digital revolution and the development of technologies. Gordon Moore, Intel co-founder, made the observation that “as transistors got smaller, the number of transistors that fit onto an integrated circuit grew exponentially” [Atkinson and Castro, 2008] so that the “number of transistors placed on a single square inch of an integrated circuit chip would double every two years” [Investopedia 2015]. After some minor configurations, this prediction of Gordon Moore was considered to be a law known as “Moore’s law”. The adoption of technological innovations by people and their penetration to the market started quite erratically.
Furthermore, by the end of the 20th century, the world had seen the rise of a new economy, which transformed heavy industry into new knowledge driven technologies. The use of knowledge in technologies such as knowledge engineering and knowledge management led to an age of rapid dissemination of information and the process of transformation has been accentuated by digital technologies developed across the world. Steam engines replaced water mills, which have now been replaced with electricity. Telephones, automobiles, airplanes, transistors, computers and finally the internet emerged. “Each new wave of technology has brought about surges in productivity and economic growth, enabling efficient new methods for performing existing tasks and giving rise to entirely new types of business” [Manyika 2013].
Back in the 1980s–1990s, the mobile telephone was perceived to be a luxury device or even an integral part of everyday life, for more than half of the people all over the world [cf. Siddharta 2016]. Indeed, nowadays people cannot imagine their typical day without using the mobile phone for social media, messaging services, incoming and outgoing calls, or surfing the internet.
Moore’s law has further led to steadily increasing performance [cf. Walwei 2016, p.2] and enabled the future production of computers, internet and mobile cell phones. Further digitalization of information has led to the appearance of the “Big Data” concept and resulted in “advances in areas such as Machine Learning, Artificial Intelligence and Mobile Robotics” [Walwei 2016]. Together with the high usability of Big Data, it has further led to the computerization of the economy. Therefore, the digital information revolution does not aim to create a completely different world but to make it function in a better, more efficient and effective way “with individuals and organizations able to access and use a vast array of information to improve their lives and society” [Atkinson and Castro 2008].
Nevertheless, [cf. Perez 2002, p.9] mentions that the digital revolution is currently in the synergy phase. This means, that digital technology is entering every aspect of life, from society to the economy. This indicates that the digital revolution is not just a theoretical term but in fact reality. It has brought with it the wind of change, which slowly but surely affects everything and everyone from the young schoolgirl to the multinational organization. The digital revolution has opened the door to something new, which has radically changed people and their lives. But these changes also affect the fashion retail world and that is why they have to be discussed from this specific point of view. The next subchapter will review the terminology of fashion and its changes throughout the years.
Fashion is everywhere. As one of the most visible forms of consumption, fashion plays a major role in the social construction of identity. It is also a global industry with a huge economic, political and cultural impact on people’s lives. Choosing the clothing provides an excellent field for studying how people interpret a specific form of culture for their own purpose, one that includes strong norms relating to appropriate appearance at a particular point in time. As one of the most visible markers of social status and gender and therefore useful in maintaining symbolic boundaries, clothing is an indication of how people in different eras have perceived their positions in social structures and negotiated between status boundaries [cf. Crane 2000, p.1]. According to Solomun [2006, p. 589], “fashion is a process of social diffusion by which a new style is interpreted as a context dependent code, and then adopted by a group(s) of consumers.” Fashion contains all types of cultural phenomena including adornment, clothing, art, music, and architecture. He further defines “fashion” as synonymous with style. As such, fashion refers to a particular combination of attributes. To be “in style” means that some reference group positively evaluates the combination. In an analysis of Simmel , Barnard reports that without the need for union and the need for isolation, fashion cannot exist. Furthermore, individuals must possess the desire to be part of the wider society and also apart from society. These conflicting needs are central to Simmel’s account of fashion: the conflict between adaptation to society and individual departure from its demands. Therefore, the individual nature of the conflict might seem to develop an anti-style that is common, for example, when looking at clothing as style. Barnard  implies that individuals “in style” communicate to referent others, in a coded manner, their inner feelings toward society. Style is then likened to a bond, a communicative code that represents the DNA of the genre. In his studies of the postmodern style in subcultures, Muggleton  explains that style is coded communication of resistance. Although, some style scenes demonstrate style that is extraordinarily intrusive, communicating resistance to societal reality can be done in a non-intrusive manner. This connectiveness forms the basis of most post-modern style groups. The discovery and understanding of the changing dynamics of these groups, form the basis of the multichannel decisions that have to be made in this style industry[cf. Rickman and Tracy. Fashion has no mutually agreed definition, and according to Crane and Bovone , fashion is viewed differently by consumers and academics. The term fashion can refer to music, literature, art, business practices, etc. However, generally when discussed, it is considered as clothing [cf. Aspers & Godart 2013, Solomon 2006, p. 589; Crane & Bovone 2006]. As it turns out, fashion is extremely hard to define. Furthermore, lack of academic research might be one reason for the absence of a mutually agreed definition; however, even if fashion had been examined more, it is not certain that there would be a comprehensive answer. This is because fashion as a phenomenon has changed so much; the difficulty stems from the beginnings of the fashion industry and its development until this day. To clarify this idea, the beginnings of the fashion industry will be examined next and it is followed by a description of modern-day fashion.
2.2.1 Historical aspects of fashion
In previous centuries, clothing was the principal means for identifying oneself in public spaces. Depending on the period, various aspects of identity were expressed through clothing in Europe and the United states, including occupation, regional identity, religion and social class. Certain items of clothing worn by everyone, such as hats, were particularly important and sent instant signals of aspiring social status. Variations in clothing choices are subtle indicators of how different types of societies and different positions within societies are actually experienced [Crane 2000, p.1]. Since its emergence in society, the origins of fashion are extremely controversial. Some claim that fashion became a significant part of society during the European Renaissance, while others consider it to have occurred later. There are also sources that indicate that the birth of fashion took place earlier [Aspers and Godart 2013]. According to Watt [2012, p.44], fashion as a term was born in the late Middle Ages as the styles started to change faster and more alternatives arose.
In its early years, fashion garments were manufactured by human hands with the help of threads and needles. Not before the 18th century, fashion deserved to be called couture, which is a French word for sewing. The first haute couture, or “fine sewing”, house was founded in Paris in the middle of the 19th century by the Englishman Charles Fredric Worth. Haute couture was primarily known in Europe at that time and Paris was the haute couture capital [cf. Waddell 2004, p.5]. Until the late 19th century textiles, were produced in homes [Powell 2014]. However, as production skills evolved, fashion gradually changed over time, allowing even larger groups to be able to acquire fashion clothing [cf. Aspers and Godart 2013]. During the industrial revolution, technology developed and enabled the production of larger scales of garments, leading to the emergence of what resembles the sweatshops of modern-day in Great Britain [cf. Powell 2014]. In addition, the spread of fashion was faster due to developing communication systems, such as newspapers, typewriters and photographs, which also made the internationalization of fashion easier [cf. Watt 2012, p. 166]. At the same time, in the 18th century, Adam Smith discovered that by imitating the rich and their fashions, individuals showed sympathy through the willingness to relate to others and through that, taking part in their glory. In the late 19th century Nietzsche suggested that fashion was part of modernity. Moreover, the word fashion - in Latin modus - indicates not only manners but also modernity [Aspers and Godart 2013].
A turning point for fashion and especially for the position of women occurred at the beginning of the 20th century [cf. Stevenson 2011, p. 86]. Considering the First World War, clothing became simpler. As men were sent to war, women were hired to do their jobs and thus started to wear more practical uniforms [cf. Watt 2012, pp. 222-238]. As a matter of fact, together with the economic boom, urbanization accelerated even further. In the 1920s, women were able to vote on both sides of the Atlantic. Above all, women came to have their own income and mass production offered them the possibility to acquire affordable clothing [cf. Stevenson 2011, p. 86].
By the 1930s, Hollywood had increased its reputation and became a major influence in the fashion industry. Costume designers had to see further into the future to identify the upcoming dominant trends in order to make the fashion in films look up-to-date when the film was shown in theatres. This accelerated the rise of Hollywood to the top of the fashion industry [cf. Watt 2012, p. 222, p. 306].
After the Second World War, women were not interested in wearing masculine clothing and dull fashion. Even though these clothes were comfortable, women wanted to look feminine again. Therefore in 1947, French designer Christian Dior launched New Look, which brought back the long-awaited feminine style and there were no more regulations for fabrics. New Look was criticized for being wasteful and excessive and caused a lot of debates on both sides of the Atlantic. Even so, the majority of women started to wear the new type of fashion, as it brought hope and symbolized saving. The popularity of the New Look accelerated the emergence of ready-to-wear clothes [cf. Olds 2001]. Prêt à porter, ready-to- wear, increased its significance and pushed further away haute couture [cf. Waddell 2004, p.14, cf. Reinach 2005]. Haute couture divided consumers into hierarchical classes, whereas prêt à porter concentrated on consumers’ tastes and styles and new kinds of fashion culture started to emerge [cf. Reinach 2005]. This is an extremely important change in the history of fashion as it gave direction to future fashion in modern society. In the middle of the 20th century, fashion had a type of sophistication in its style [cf. Waddell 2004, p.14]. The hippie movement is a great example of ideology harmonizing with clothing. Born in 1967 in San Francisco, it soon spread across the world. Hippies dressed individually by buying and modifying used clothing. Their aim was to spread the ideals of peace, love, and freedom and the movement organized protests against wars. Clothing had an ethical and political influence; psychedelic patterns and the fabrics were preferably made from natural materials. Hippies highlighted unisexism in clothing [cf. Watt 2011, p. 374]. In the 1970s, the fashion borders between countries softened as travelling increased the popularity of fashion even further and fashion shows became global [cf. Stevenson 2011, p. 202]. Fashion reporters and buyers started to visit the catwalk shows in the fashion capitals Milan, Paris, New York, and London twice per year to get familiar with the next season’s fashion [cf. Watt 2011, p. 386]. The first fashion shows can be seen in the 19th century when Charles Fredric Worth invited his customers to a salon show at the beginning of the season, in which models presented the haute couture dresses on the floor in front of customers. At the beginning of the 20th century, fashion shows became more modern and took the form of presentations in department stores. Fashion shows at the time were mainly intended for upper-class women who were loyal customers [cf. Skov et al. 2009]. Some designers who started their careers in the 20th century were so successful that their names are an important part of the fashion world even today. The idea of branding, on the other hand, became more apparent through hip-hop culture, which arose in the 1990s [cf. Watt 2012, p.386, p.256]. In the 1990s supermodels became a vital part of the fashion world. They emerged as celebrities and an essential part of fashion shows, which had turned into major spectacles. Moreover, fashion played a significant role in pop culture [cf. Watt 2012, p. 409, cf. Stevenson 2011, p.246]. In comparison the way in which people currently respond to fashion has dramatically changed. This will be further elaborated in the next chapter.
2.2.2 Fashion of today
Nowadays, the ideology behind fashion has become a sociological phenomenon. As previously mentioned, over the last centuries, fashion has changed radically, from slowly changing dresses into fast phased garments [cf. Aspers 2013,p. 171]. Fashion is a process that has an influence on an individual level by affecting one’s behavior. Nevertheless, it represents a social phenomenon and has an impact on several people simultaneously. A fashion system is formed by people and organizations who are building and posting symbolic meanings into cultural goods [cf. Solomon 2006, pp.589-591]. Ma  claim that the consumption of goods, such as fashion, has started to reshape people’s identities. At the same time, fashion is a product of many trends that are spreading today at an extremely fast pace through the internet, television, magazines, and celebrity culture, in which the media is selling the image for average consumers to replicate [cf. Watt 2011, p. 415]. These examples briefly show the complexity of the current state of the fashion industry due to the advent of the global market and the need of corresponding marketing practices. Okonkwo [2007,p. 41] asserts that traditional business among the entire fashion industry used to be based mostly on intuition, focusing exclusively on product development and advertisement, but the current rapid development and complexity of the global environment require modern and more sophisticated practices. Aside from the global character of the contemporary fashion market, he further points out the technological innovations as one of the key components of shaping the nature of this industry. Developments in the internet in particular have empowered consumers, more than ever before and have raised their product and brand expectations. As a result, the task of retaining the attention and loyalty of consumers has become an increasing challenge. Guzelis  expands Okonkwo s  argument with the claim that because of the nature of the Web 2.0, tools such as social media and fashion blogs have changed the information flow among the fashion industry; fashion trends and news are no longer passively received but are rather being commented on, discussed, exchanged, and ultimately even recreated. Such an information flow where users are in an empowered position has a natural impact on the entire industry, which needs to learn how to operate in this new environment, and moreover, how to start profiting from its newly transformed character. It is assumed that in order to reach those goals, the biggest adjustment would involve fashion public relations as it is the area directly related to corporate communication and publicity.
Fast fashion and luxury fashion of today represents the global fashion industry. The French fashion designer Gabrielle Bonheur “Coco Chanel” said, “luxury is a necessity that begins where necessity ends” [cf. Okonkwo 2007, p. 7]. Without the luxury brands, the fashion market would be colorless. Differentiation, exclusivity, scarcity, brand strength, innovation, premium prices, high quality, and product craftsmanship are characteristics that describe a luxury brand [Hines and Bruce 2007, pp.131-132, Okonkwo 2007, pp.11-12]. Moreover, luxury fashion brands are giving more features to their customers, such as identified status, exceptional quality, after-sales services and creativity: “Luxury brands provide a complete package of significant benefits to consumers, the social environment, and the global economy” [cf. Okonkwo 2007, p.2].
On the other hand, fast fashion is “a term coined by retailers to encapsulate how trends move rapidly from the catwalk to the store” [Brooks 2015, p.8]. With the development of Quick Response in the late 1970s and throughout 1980s, the concept of fast fashion began. According to Harrison and Hoek [2008, p. 255], QR is when companies try to meet customer demand through supplying the right quantity, variety, and quality at the right time to the right place for the right price. Since a small number of retail organizations adopted the idea of fast fashion, the industry has perceived it as a competitive advantage [cf. Hines and Bruce 2007, p.40, cf. Walker, 2000].
Together with the increase in fast fashion brands, the life of luxury fashion brands has become more difficult [cf. Business of Fashion 2011]. The Italian luxury fashion designer Giorgio Armani mentioned that "fast fashion is a growing reality in our sector" [cf. Colavita and Keiser 2005]. H&M, Zara, Topshop, and Mango are examples of retail brands that have been referred to as fast fashion brands. These brands with their credible fashion offerings have been extremely successful in attracting the attention of the fashion-conscious consumer. They have done this through interpreting catwalk trends with a speedy time-to-market [cf. Business of Fashion 2011].
To conclude, one aspect that really distinguishes luxury fashion brands from fast fashion brands, is their continuous focus on giving the customer high quality service in their boutiques, which today fast fashion brands lack. The next chapter will examine the impact that digitalization has on the fashion industry.
2.3 The impact of digitalization in the fashion industry
Ranging from global discount retailers to exclusive luxury brands, the fashion industry is one of the most challenging fields, heavily influenced by the global economy as well as distinct trends and industrial changes. In response to the pressure for growth and cost efficiency, many brands have started a series of initiatives to improve their speed to market and to implement sustainable innovation in their core product design, manufacturing, and supply-chain processes [cf. Lay, s.a.]. Furthermore, adoption of disruptive technologies such as advanced robotics, mobile internet, advanced analytics, virtual and augmented reality, and artificial intelligence is accelerating and has the potential to disrupt entire industries, including the fashion industry. According to Business of Fashion 2018, the global fashion industry is moving into a decisive phase of digital adoption by the mainstream consumer and online sales of apparel and footwear are projected to grow rapidly, not the least in emerging markets [cf. Amed 2017].
Today, Information and Communication Technologies (ICT) are having a major impact on everyday life and most businesses. Therefore, fashion is also undergoing the process of adaptation to the digital world on different levels, such as garment production cycles, management and sales as well as communication with the help of digital tools [cf. Lay, s.a.]. In the 1970s, information and telecommunication started to change by creating a significant base for the internet – an innovation that is becoming such an important part of society that people do not know how to live without it. For this reason, technological improvements and digitalization have made online shopping possible and subsequently changed consumers’ attitudes towards the retail industry [cf. Perez 2009]. According to McKinsey & Company, some 80 percent of purchases are still expected to happen in stores in 2020. At a time when e-commerce is empowering consumers with more choices and market conditions are increasingly volatile, stores must rethink how they operate [Grieder 2014].
With the exponential growth in the use of digital technologies, consumers are no longer content with simply buying fashion products. Therefore, the role of the consumer has shifted from one of passive observance to enabled dominance. Nowadays, consumers want to interact with, belong to, influence, and be the brand that they buy. Moreover, they care about how they look in public and on social media. As a matter of fact, the majority of consumers use digital channels before, during and after making their purchases [cf. Lay, s.a.].
For instance, well-known figures in particularly niche areas of fashion are also important for the industry and often build their presence through new technologies [Harris 2017, p. 15]. As Theresa M Senft  has mentioned, nowadays micro-celebrities often use “a new style of online performance in which people employ webcams, video, audio, blogs and social networking sites to ‘amp up’ their popularity among readers, viewers and those to whom they are linked online” [cf. Harris 2017, p.15]. The modern shopper’s ease in using digital channels has transformed the traditional customer journey into a complex journey across online and offline touchpoints. Today, many consumers expect perfect functionality and immediate support at all times. They are becoming habituated to rapid delivery times. For example, Farfetch, an online shop for luxury fashion, offers delivery in selected cities from the store to a customer’s home in 90 minutes or less. Therefore, digital-first e-commerce companies from Amazon to Zappos and Alibaba to Net-a-Porter are continuing to invest in digitalization with the aim of providing an even-more-premium experience [cf. Amed 2017].
Nevertheless, executives from all retail industries are trying to optimize digital opportunities in their business such as analytics, mobility, social media, and smart embedded devices. Many fashion companies are remodeling their use of technologies, for example with enterprise resource planning (ERP) to change value propositions, customers relationships and internal processes [cf. Westerman et al. 2011]. Therefore, clothing retailers all over the world have to be conscious about new trends and innovations in these countries. The digital race has already started and it is at the starting point of digitalization [cf. Kreutzer 2014a, p. 38].
Currently, the expansion of data and exponential increases in technology performance have opened the door to big data. The use of rich data and granular customer insights to inform decisions, offers business opportunities across the fashion value chain, in areas ranging from dynamic pricing to optimized product replenishment. Clearly, the benefits of leveraging data can be significant. However, new challenges are also arising, such as protecting customer data and privacy [cf. Amed 2017].
Retailers have to be careful of which trends and innovations customers react to when it comes to digitalization. Without adapting suitable innovations or trends, retailers would not be able to achieve customers’ engagement or customer retention.
Taking into consideration the ideas discussed above, it is clear that clothing retailers have a tremendous global importance. Therefore, digitalization has a huge impact on clothing and retail businesses. The next chapter will examine fashion marketing and both its development and digital impact.
3. Fashion and marketing
Fashion is a constantly changing process, which brings new trends into practically any human activity in regular cycles [cf. Easey 2009, pp. 4-5]. Being a product of the time, fashion must be viewed within a broader cultural context of designers ethnic and social background, social mores and attitudes, technological innovations, and the economic and political conditions [cf. English 2009, p. 6]. A fundamental aspect of this industry is the ability to identify products that the customer needs and will buy. For this reason, marketing can help to provide this additional knowledge and the skills needed to ensure that the creative component is used to the best advantage, allowing businesses to succeed and grow [Easey 2009, p. 5]. Marketing strategy can be defined as a fundamental framework that includes current and planned objectives, as well as exploitation of enterprises resources and interacts between enterprises and market, competition and other factors of the environment [cf. Renko, p. 16, from Walker 1996]. Additionally, fashion marketing strategy is defined as a business philosophy that deals with current and potential customers of clothing, as well as products and services that are directly related to textiles and clothing in order to achieve long-term objectives, and differs from other areas in which marketing operates [cf. Easey 2009, p. 7]. Beside the aspects mentioned above, another important component of the fashion industry is a strong brand image. The image is more than a name, logo, slogan, and design. It is the whole concept containing symbolic meaning and induced associations as well as ideas and attitudes of the brand. For instance, “a jeans brand Levi s is not just an eye-catching red label; it has developed core urban-hip user imagery in youngsters minds,” as Lee  claim. For this reason, the fashion market strongly depends on creating or maintaining a distinctive, desirable, and constant image, bringing additional value and brand differentiation [cf. Lee 2000, pp. 60-64]. Furthermore, the lack of copyright protection emphasizes the importance for the brands and designers to build up a strong image. According to Blankley [cf. 2010], there is no intellectual property protection in the fashion industry, which means that anybody can copy any design from anybody and present that as their own. The result of the lack of legislative coverage of this issue together with the ongoing pressure to establish collection after collection is the collaborative character of the fashion industry. Nowadays, it is commonly known that haute couture designers search for inspiration in other culture fields (especially the music and film industries), in street fashion or vintage collections several decades old, and are subsequently copied by mainstream brands. Moreover, this mechanism determines the emergence of new global trends, and leads to the democratization of fashion. However, she further notes that as designers cannot rely on legislative support, they can solve this issue by copying themselves and directly cooperating with mainstream brands (for instance, the custom collection by Versace for H&M), or by creating strong image characteristics for a particular brand, copies of which would be perceived as an obvious fake (for instance, Christian Louboutin’s red soles or Burberry’s classic
checkered pattern). Under the circumstances briefly explained above, fashion marketing can be defined as a management process concerned with anticipating, identifying, and satisfying actual customer needs in order to meet the long-term goals of an organization and continuously building or maintaining strong corporate image to characterize the brand in the market. In order to reach those goals, fashion marketing uses common techniques of advertising and market research along with tools specialized for the fashion industry, such as product development, branding, pricing or forecasting [cf. Easey 2009]. The next chapter will describe the evolution of digital marketing in the fashion industry and its development towards the marketing mix.
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