In my research, I sought out how to size up the competition in the clothing retail industry, also known as “brick-and-mortar.” In particular, I will cover how product selection and geography drive cross-channel competition to determine if a traditional retail shop and or internet shop will sell better globally. I will emphasize on the best solution for profitability and the best way to reach out to the consumer if the traditional retail stores are not enough.
E-commerce has grown significantly over the years, more and more consumers are shopping via the Internet than ever before, but clothing is considered to be a high involvement product category, related to personal ego and products that need to be seen, felt, touched, and tried on because they are difficult to evaluate. The general aim of this research is to gain a better understanding of the consumers’ fashion-shopping experiences in the different retail channels and how to compete with the others. Retailers must think in all channels holistically, boosting interactive and modern technologies for the Internet and taking advantage of all touchpoints with the consumer, including mobile devices and social networks.
How the product selection and geography drive cross-channel competition. Brynjolfsson, Hu, and Rahman (2009), “conducted a study to collect data on local market structures for traditional retailers, and then matched this data to a data set on consumer demand via two direct channels: Internet and catalog.” I am not trustworthy of the catalog because they have models on there that emphasize on how the clothing looks on their bodies versus ours. Although, you should consider that some consumers prefer the catalog for their shopping experience, not everyone is high-tech. Brynjolfsson, Hu, and Rahman (2009), “Their analyses show that Internet retailers face significant competition from brick-and-mortar retailers when selling mainstream products but are virtually immune from competition when selling niche products.” Niche products are more expensive, so I would eliminate this from my own business. Notably, niche products can be provided by multinational companies, but they also give a better chance for smaller, private firms to be able to compete because there is less need for economies of scale and high output. Brynjolfsson, Hu, and Rahman (2009), “Furthermore, because the Internet channel sells proportionately more niche products than the catalog channel, the competition between the Internet channel and local stores is less intense than the competition between the catalog channel and local stores.” Based on this information you can see that the catalog and the niche products does not need to be incorporated into your business. This is always an option, but honestly not necessary. Brynjolfsson, Hu, and Rahman (2009) “The methods they introduce can be used to analyze cross-channel competition in other product categories and suggest that managers need to consider the types of products they sell when assessing competitive strategies.” Depending on who, where, and how you are trying to sell your product, this will determine the best geographical location, product selection and how you will sell your products when starting your own business.
To compete with traditional retailers, many internet firms have built delivery centers across the United States, speeding up the delivery of their products to consumers. The Internet providers also offer their consumers free-shipping discounts. Again, clothing is considered to be a high involvement product category, related to personal ego and products that need to be seen, felt, touched, and tried on because they are difficult to evaluate. Brynjolfsson, Hu, and Rahman (2009), ” state that what has been neglected by the literature on the competition between Internet and traditional retailers are Internet retailers’ ability dramatically reduce consumer transaction costs by making large product selections available and Internet retailers’ ability to greatly reduce consumer search costs through the usage of IT-enabled tools.” In contrast, consumers search costs in brick-and-mortar stores are low for only a few products that are widely available and highly visible.” I believe if you want to reach out locally and globally, then your best solution is to offer the consumer your traditional retail store and an Internet shopping experience to be more competitive and profitable.
We are living in a digital world. According to Rigby (2011) “today, however, that economic reality is well established. The research firm Forrester estimates that e-commerce is now approaching $200 billion in revenue in the United States alone and accounts for 9% of total retail sales, up from 5% five years ago.” Based on this estimate it looks like e-commerce is growing significantly and it has transformed and continues to transform the retail sector in the coming years. Rigby (2011) “The corresponding figure is about 10% in the United Kingdom, 3% in Asia-Pacific, and 2% in Latin America. Globally, digital retailing is probably headed toward 15% to 20% of total sales, though the proportion will vary significantly by sector.” What we are seeing today is only the beginning. The retail sector will want to integrate their business into an Omnichannel experience in order to stay above the competition. Rigby (2011) “Moreover, much digital retailing is now highly profitable. Amazon’s five-year average return on investment, for example, is 17%, whereas traditional discount and department stores average 6.5%.” Unless conventional merchants adopt an entirely new perspective, one that allows them to integrate different channels into a single seamless Omnichannel experience, they are likely to be swept away. Understanding what Omnichannel is, it is a cross-channel business model and content strategy that companies use to improve their user experience. Omnichannel is an integrated way of thinking about people’s relationships with organizations. Rather than working in parallel, communication channels are designed to cooperate and build a coherent, evolving, cross-channel experience.
I will now give you a brief overview of the retail sector and the use of barcodes. Through Hortaçsu and Syverson (2015, p. 4) “Over the long term it has been shrinking as a share of total US economic activity and in terms of relative employment share. The retail sector has experienced stronger-than average productivity growth, but this has not been accompanied by commensurate wage growth” This potential for productivity growth, driven by information technology, evokes Basker’s (2012) examination of earlier retail-sector productivity gains harnessed in the sector through the introduction of barcodes.” The barcodes allow you to accurately track large stocks and also look up any single piece of merchandise in a matter of seconds.
While it is unclear whether these relationships between technology, management, variety, and productivity are causal, the patterns do suggest possible channels through which productivity shapes the success and survival of retailers. It is also interesting to note that while many of these proposed productivity drivers involve digital and other information technologies, they are as likely to be operating on the “back end” of retail (selection of offerings, distribution, inventory management, and so on) as on the customer-facing “front end” (websites, online advertising, and the like).
The growing concerns of e-commerce. In their research, Hortaçsu and Syverson (2015, p. 7) “found that the growth of e-commerce has received extensive attention in the business media and academic literature. Between 2000 and 2014, the fraction of all retail sales accounted for by e-commerce rose steadily from 0.9 to 6.4 percent, according to figures from the US Census Bureau.” Although, there is a rise in e-commerce it does not mean that the traditional retail shops will suffer an impact. Despite how technology changes, there are still plenty of consumers that prefer the traditional retail stores over Internet shopping. Hortaçsu and Syverson (2015, p. 7) “The increasing share reflects an 11-fold increase in nominal annual e-commerce sales from 2000 to 2014, in contrast to a 55 percent increase in nominal retail sales during that time. However, even with its recent rapid growth, the miniscule base from which this expansion grew means online-commerce is still a small part of retail activity” Once more, the e-commerce is an option for your business but it does not have to be implemented, it is your discretion, depending on whether you are doing your business locally only or both locally and globally. If you do decide to go globally, I would prefer for myself to have Internet access for my consumers rather than open a retail store out of the country. Whereas, it has been successful for some retail stores, just a thought…
What are the forms of competition? The Business of Fashion : Designing, Manufacturing, and Marketing by Burns, (2016, p. 54) When competing you must know what your strategy will be to outperform the competitor. Here is what a list should entail: “the price of the merchandise to the retailer or consumer; the quality of the design, fabrics, and construction; innovation-how unique or fashionable the merchandise is; your services offered to the business customer or the ultimate consumer; social benefit of the merchandise-how the company or brand creates a lasting benefit to the environment or the society through the design, production and/or distribution of the merchandise.” The book itself is very well structured, following the general design/marketing process applied in the fashion industry. It is always a good measure to familiarize yourself with all aspects of clothing retail, marketing, designing, and manufacturing.
Consider selling secondhand clothing as part of your business venture. Farra (2017, p.1) “article states why you should buy and sell secondhand clothing in 2018”. Let’s face it, places such as ThredUp, Luxe, Rebag and the RealReal have been hitting the Internet like a storm. “Each year, Vogue releases a resale report examining the state of the industry, Farra (2017, p.1)” Reinhart says. In 2017, they found that apparel resale is currently an $18 billion industry, expected to grow to $33 billion in the next four years. And resale is growing faster than traditional retail.” Ultimately, incorporating a small amount of secondhand clothing in your retail store could be a wise investment, not quite sure if it has ever been done like that, but further research will need to be done on my behalf because I am interested in the profit margins that come with this. Furthermore, I would be giving the consumer options here rather than limitations, so why not do both?!
Brahams (2017) in the book called “The Fundamentals of Quality Assurance in the Textile Industry” it describes how quality professionals in the apparel industry coordinating with overseas factories can ensure excellence. The author explains what tools are required and how to manage products from style conception to finished production and the methods used to track and evaluate samples and production at each stage of the critical path. This book reinforces the concept that quality assurance must become an integral part of the business and details crucial procedures that have been adopted internationally. Valuable information for me if I do decide to go globally with my clothing retail business. If not now, then possibly in the near future if all goes well.
Investment in quality control is a form of insurance, but it does not wait for disaster to happen then compensate you; it works to prevent disaster from happening in the first place. If implemented properly, it is continuously maintaining , serving and repairing your supply chain. The goods I buy, and sell are the lifeblood of my company, and I need to do everything possible to protect the supply chain and to ensure that the level of quality stays consistent. It’s worth taking a moment to reflect on the recent history of the clothing industry when approximately 80% of garments sold in either Europe or America were made in those countries and sales, design, and production were usually managed under one roof. Owing to the proximity of design and production, quality problems were quickly identified and resolved. Today production can be thousands of miles away, in a different time zone, in a country whose first language and culture are different from yours; I do not think you could make things more difficult if you tried.
Brannon (2015) in her book of “Fashion Forecasting” this comprehensive text provides you with the tools to bridge the gap between ambiguous signs and actionable decisions. Designed to make forecasting techniques accessible, “Fashion Forecasting” not only explains information gathering, but also the process of organizing and analyzing the information for presenting and implementing the forecast. Completely updated with full-color illustrations, the 3rd Edition features the most up-to-date information on current fashion forecasting practices, including the use of the Internet, trade shows, fashion weeks, and regional centers. It will also give the me an opportunity to rehearse these best practices through case studies and forecasting activities. I chose this book and I even purchased it because it will provide me with an outline of how to do forecasting practices and introducing innovation, show me the direction of fashion change, cultural indicators and how to do a competitive analysis. I got a glimpse of what the book entails and I am extremely impressed, it is backed up by some scholarly sources and an extensive list of bibliographies. Really good stuff!
Keiser (2017) in her book “Beyond Design : The Synergy of Apparel Product Development” she emphasizes on how a company’s mission, vision, and values form the foundation of the company’s strategic plan helping them to guide the company in their approach to changes in the business climate and molds the firm’s relationships with its supply chain partners. It should be dynamic, evolving as situations change and current information becomes available. The intent of the strategic plan is to provide structure to all company activities. Developing profitable business strategies including an ongoing analysis of the competition. Remember, a company’s story must agree or be in harmony in their message, their actions, and how they manage their resources in order to make an emotional connection with their stake holders.
In an increasingly competitive retail environment, fashion retailers must find innovative ways to connect with their audience and offer them a relevant proposition. Understanding how to size up the competition enables us to not only continue to make profitability but also reach our consumer in their needs and wants. Technology enables integration of channels (also known as Omnichannels) and gives new relevance to physical stores. But the most important thing is that technology must not be an end, but a medium to enhance high-quality customer experience. Mobile connectivity via smartphones and tablets enables consumers to browse and shop anytime, anywhere, and mobile-commerce is expanding rapidly. It is believed that, as consumers become more experienced in shopping online, they will expect a similar experience in stores. As a result, the store experience must be redefined, and its role should evolve, as it is becoming one part of a larger and more connected customer experience. It would be beneficial to complement this research with a qualitative inquiry to gain deeper and richer insights into consumers’ experiences in fashion shopping, specifically in relation to the influence of e-commerce on in-store experience perceptions. To test specific technologies, laboratory or field experiments would be the best possibility to decide what is relevant for consumers. Finally, online shopping is changing the future of retail. But if the Internet was once seen as a threat to the future of stores, it is now becoming clear that each channel compliments the
