The State of Fashion, a yearly report from Business of Fashion and McKinsey & Company, has just been updated following a pretty difficult year. The State of Fashion 2021, with the theme “In quest of promise in risky times,” examines how the pandemic has impacted the fashion sector in an effort to aid executives in navigating the difficult road to recovery.
So let’s look at the State of Fashion 2021’s key insights and how you can use them to improve your loyalty programme.
- Customer Reality Changes
One key finding from the report is that the doomsday attitude from the beginning of the year has changed into a strong drive to manage the business more effectively and get through the challenges. This is largely because this new customer behaviour is now more understood.
The State of Fashion 2021 reports that 60% of consumers were willing to branch out and experiment more in the first few months of the year. They were seeking out brands that provided greater innovation, convenience, and social responsibility. The last one was particularly significant since society has grown more understanding of the plight of weaker workers.
These findings are consistent with the main points of our April webinar, in which our experts emphasised the best ways to gain customers’ confidence by “trying to serve, not to sell.”
- Right Now, eCommerce Is Dominant
The survey also makes it clear that online sales currently dominate the sector. The SoF 2021 reports that 71% of fashion executives anticipate a 20% or more increase in their online business in 2021.
The lockdown’s dramatic increase in digital usage is the primary cause of this rapid transition. As a result, firms that had previously been reluctant to open an online store are now going multichannel. While other businesses, like Starbucks, experimented with cutting-edge new concepts to keep in touch with their clientele.
Your loyalty programme should adopt the same innovative approach. We’ve been keeping an eye on how consumer behaviour has changed during the year and have found the following trends:
Resilient subscription-based loyalty programmes are now again available.
It’s more crucial than ever to interact with clients outside of the purchasing cycle through non-transactional touchpoints (such as incentivizing social media participation, product reviews, and survey completion).
To keep customers interested, loyalty offers must be customised.
The bulk of users are currently interacting with brands on their phones, thus you must be highly visible there.
People are more eager than ever to receive special treatment, thus the popular features in loyalty programmes right now include early entry, VIP tiers, and special access clubs.
- Fashion Industry Leaders Want New Investments
The human touch was one of the main casualties of the abrupt shift toward digitization. Customers missed the human element when purchasing online, which made them feel less obligated to stick around during the first half of the year, which is why they felt “less loyal” to the company.
According to The State of Fashion 2021, the majority of industry participants will be able to resolve this issue by opening up new prospects and enhancing their capabilities. Others may turn to new client retention technology, like loyalty programmes, while some may invest in new geographies or incorporate smaller, struggling businesses.
The very nature of reward schemes has also undergone a transformation. For instance, pure-play loyalty providers are more common these days because firms are trying to outsource their marketing and email management and require a solid technological partner that can work with their current system.
- Collaborations Will Grow Deeper
The SoF 2021 emphasises that fashion firms should restructure their supply chain and abandon transactional connections in favour of closer partnerships with more flexibility, which is a very unexpected lesson.
According to the research, the industry’s susceptibility during the pandemic was greatly exacerbated by poor procurement partners, shaky contracts, and a centralised supplier footprint.
Your loyalty programme can be the centre of this new, flexible collaboration if you decide to heed their advise. Including partner rewards in your catalogue of prizes is an economical method to add variety and excitement to the incentives. It ultimately benefits both parties and also gives your partners exposure.
- Retail Is Still Alive
Although physical retail has been on the decline, there is still time for merchants to increase their return on investment at the store level. According to the report, individuals won’t base their life on shopping in the future. Instead, the focus of retail should be on people’s lives.
What does that actually mean? In order to support the logistics for the internet business, physical places will be transformed into “dark stores” by embracing Retail 2.0. Instead, shops will develop into showrooms where clients can interact with things and test them out in an engaging setting.
When it comes to loyalty programmes, they make a third choice—coalition loyalty programs—available. Instead of struggling to live on their own, brands in malls can unite under a coalition programme, which derives value from the fact that participants can accumulate points from any tenant and then use them at another.
The year 2021 will be crucial.
The entire world, not just the fashion business, was under stress this year. All brands and retailers have come to the conclusion that the only way to move forward is to challenge their current business model, adjust to the new customer reality, and provide creative new solutions to appeal to novelty-hungry consumers.
As industry pioneers in loyalty technology, Antavo takes pleasure in consistently providing cutting-edge solutions. Visit our Product Release area to learn more about our most recent solutions, or check out our blog to learn about the most recent developments in client retention.
By enhancing their loyalty programme, we’ve assisted many enterprise-grade businesses in 2020 in taking the next step in client retention. Please take into consideration include us in your loyalty RFP if you’re interested in what we have in store for you.