Fashion brands go digital as stores shut and walk-ins decline

The British high street is continuing to diminish, and with an unprecedented blow by the pandemic it may soon become obsolete with fashion retail stores shutting down, re-organising or moving more focus to online experiences.

The UK’s high streets lost more than 17,500 chain store outlets in 2020. Reduced incomes, change of trends and taste, saturation of real estate, increased rents are some of the reasons responsible for this trend. On the contrary, increased digital sales, despite being a reason for reduced store popularity, has helped many brands see an overall growth in revenue.

The UK’s high streets lost more than 17,500 chain store outlets in 2020

H&M, the world’s second biggest clothing retailer, saw a leap of 64% in profits in Q4 of 2021 (over last year) rising to $640 million. In January 2022 it announced that it would double its investments in 2022, to around $1.1 billion, to help achieve its target of doubling current sales figures by 2030. To do so, H&M will be spending its resources on supply chain, renewable energy and sustainable materials, but its primary investment will be in technology and AI.

H&M’s website and mobile app enabled its shoppers to continue buying products at their own convenience, which helped it sail through the pandemic. It reported sales of £16.4bn in 2020, despite 80% of stores being shut down for months due to restrictions and lockdowns.

ASOS, an online-only fashion retailer, more than tripled first-half profits (253%) in 2021 to a record £106m as online shopping experienced traffic like never before. Its revenue jumped 24% year-on-year to £1.98 billion in the six months which resulted in acquisition of other brands like Topshop and Miss Selfridge.

Over the last decade, ASOS has put increasing importance on its mobile marketing strategy and has worked hard at creating an engaging mobile experience through its app. Its success has been reflected through the 10 million+ app downloads worldwide, where customers, on average, spend 80 minutes per month in the app.

Over 60% of its purchases happen over its digital platforms, which offer perks such as exclusive app-only discounts, back-in-stock notifications, and speedier payment methods. Users can also create shareable boards, send wish-lists to friends or use ‘style match’ to search for outfits via photos.

Another big player on the high street, Primark, on the other hand trades solely as an in-store retailer. It has a website which showcases current stock but only allows users to find the nearest store where they could make the desired purchase. Primark, in comparison to H&M and Asos, was significantly impacted by the Covid lockdowns.

In its 2021 annual report, parent company ABF reported that Primark had generated a revenue of £5.6 billion, which was a staggering decline compared to revenue generated in the pre-pandemic period. The company’s growth rate was greatly impacted, with 2020 marking an unseen decline in sales of 24 percent. The main reason behind Primark’s poor sales performance was its lack of online sales channels.

These examples show how implementing an effective digital strategy and using digital channels are essential in ensuring continued growth of retail sales in the future. Pivoting to a digital experience has given the most popular high street retailers an avenue to increase engagement with their users, allowing them to explore thousands of products through their phone, along with a host of rewarding features and logistical conveniences.

Digital Customer Experience

Digital experiences have begun to complement – if not substitute – the in-store experience. With fewer people visiting the high street, it is time to integrate in-store resources with innovative digital sales strategies.

Zara, the world’s largest apparel retailer, has embraced an innovative combination of masterful stock management and digital tools to assist consumers in both physical and digital journeys. Its app offers a real-time 360º view of its inventory, both online and in-store. This breaks the divide between online and offline shopping, resulting in a seamless omnichannel experience. It offers features like scanning items to check size and colour availability, browsing through a store’s available stock, find a product’s exact location in the store, and get easy access to trial rooms by skipping the regular queue.

If you are working towards building a fashion brand or want to scale-up your retail business’s digital presence, it’s time to rethink your digital strategy and prepare for the future. If you want to develop exceptional end user experiences, then Vidatec can help. Speak to one of our experts and set up a design and discovery workshop today.