Why fashion businesses need to move from channel-first to customer-first

For years, consumer brands have promoted omnichannel strategies as a ‘Holy Grail’ for attracting and retaining customers. Many believe that integrating sales, communications and tech platforms is a magic wand for generating sales and improving customer lifetime value.

But with bricks-and-mortar retail suffering and direct online sales skyrocketing, those who have succeeded in managing demand effectively were not necessarily those who implemented full-scale re-platforming and omnichannel transformations but those who had a real understanding of their customers.

We have seen many brands – mainly medium-sized businesses – feel pressured into implementing or scaling e-commerce functionality as a way of pivoting around retail closures and lockdowns caused by COVID-19. There was panic and reaction – businesses scrambled to implement e-commerce strategies and manage influxes of online orders, as well as an exponential rise in customer service requests across multiple languages and time zones.

In our experience of working with over 50 global fashion brands, those who are most successful adopt a customer-first mindset. Using the same laser-focus that they use in their designs to identify exactly what their customer needs and pain points are. There’s little debate – companies which are market or customer-focused are more profitable and enjoy better sales growth, customer retention and product success. That’s according to the renowned global marketer John Narver.

By adopting a customer-first approach, brands can ensure that any digital solution will meet customer needs. Fashion businesses often have an intrinsic understanding of their consumer – and have a real opportunity to truly connect with customers, understand their needs, and get ahead on the service proposition behind any future digital offer.

We see this play out within strategic, digital-first brands such as ASOS, which traded around 35% higher year-on-year after combining an understanding of customers with a slick digital platform. In the 2021 State of Fashion report, McKinsey gives further hope, claiming that there will be another 20% annual digital growth during 2021.

What does a truly customer-first approach look like in practice?

With 3,000 professionals serving the fashion industry, we have seen that firms which marry customer understanding, data and analytics, see the best successes in maximizing brand profile, customer experience, and profits.

Most often, fashion brands come to us with the following needs in developing a customer-first approach:

1. Really get to know the customer – You wouldn’t design ranges for a customer you didn’t understand, and the same goes for designing service. Forget any assumptions you have made about your target customers, which can lead to a lack of understanding and a swathe of false and risky beliefs, which can be a fast-track way to waste money.

Data drives better decision-making, and the most advanced brands access millions of data points collected in real-time from across the whole industry – not just their businesses – to inform the next steps.

This approach also helps solve another problem we often see in fashion – where C-level directors and business owners are not close to the critical customer data and insights collected by less senior colleagues. Leveraging this data effectively will enable businesses to become far better informed and make more intuitive, proactive, and predictive decisions.

Armed with data, you can then create personas built on facts, enabling you to build better customer relationships and personalize experiences based on real insights about their preferences, behaviors, and purchases.

2. Understand the opportunities in your customer journey – In an increasingly complex sales environment, many brands need help mapping out the entire customer journey. Visualizing the current experience through the end-to-end process, from attraction to selection, retention, and upselling. This will help you identify areas that can be streamlined and opportunities for upselling and cross-selling.

3. Re-write what customer service means – Move the contact center from being a cost center to a profit center that reflects your brand values through positive customer experiences while supporting sales.

The smartest firms free up service teams to help customers to buy, not solve problems. This involves automating the maximum number of routine transactions and inquiries, enabling people to engage in personalized 1:1 conversations.

It also means listening to customers and giving them what they want. In a globalized industry like fashion, if someone wants to buy a handbag at 3 am, let them do that. Or, if they’ve purchased a jumper from a collection – show them the rest of the matching collection or items that are seen with that look to ‘shop the outfit.’

For fast-growing firms, it can be challenging to recruit high-caliber customer service professionals to support these sales experiences effectively, particularly at scale. In our experience, the most advanced fashion brands tap into existing hubs comprising multilingual, trained call handlers to quickly achieve scale and ensure the highest standards.

4. Ensure organizational and operational support – Shifting to a customer-first approach is a strategic move that needs to be supported operationally within your business. You will need to scale, transform, and ramp up rapidly and efficiently to support customer demand. You may need support in changing your organizational structure.

5. Optimize commercials – While we strongly advocate putting the customer first, there’s one caveat – it has to be commercially viable. Many firms need to balance their brand promise, meeting customers’ needs, and ensuring they make a profit.

For some, shifting to e-commerce has not been a lifeline pivot – it’s increased the cost to serve significantly. We help brands to develop a commercial strategy, which might include having to say no.

6. Create a frictionless user experience – Customers have high expectations and demand a quick, slick, frictionless experience. Nearly half of us won’t wait even three seconds for a website page to load, according to Dynatrace, which monitors IT performance. Eliminate poor websites, glitches, payment issues, and bugs within apps to minimize frustrations and retain people on-site for as long as possible to maximize spend.

7. Future-proof solutions to avoid a constant cycle of change – Without care, digital offerings can become an area where you can waste money in rapid time.

In previous roles, I’ve seen firms spend millions on IT platforms that become obsolete almost the moment they’re finished because the industry is moving so fast. Another common issue is brands that implement technology for technology’s sake.

There is never a good time for a ‘white elephant’ IT project. But now, with all the unique challenges presented by COVID-19, it’s a particularly bad time to drain your business’s time, money, and team morale.

By implementing a customer-focused technology approach, you can deliver a digitized solution that saves not only time, effort, and money – but also positions you ahead of the competition for business growth.

Thinking customer-first helps you invest in the areas where you and your customers will derive the most value. Not only will this enable you to be both more effective and efficient in delivering your customer experience, with some irony, it’s probably also the best way to give the optimum omnichannel experience in the long term.

Atif Rashid

Solutions Director – Transformation

Gobeyond Partners (part of the Webhelp Group)

Fashion Subject Matter Expert

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The timeless ways fashion businesses can maximize growth

It’s no secret that the fashion industry has endured one of the most challenging trading years in its history due to COVID-19, with shop closures and the seismic shift from bricks and mortar stores to digital selling.

In fact, the 2021 McKinsey State of Fashion report talks of a ‘Darwinian’ shakeout of firms that were weak before the pandemic, while stronger players will be emboldened.

In our experience, supporting the growth of 50 global fashion brands, we see that the strongest firms are evolving their service centers into profit-making entities, geared towards supercharging customer satisfaction while systematically driving up sales – not just solving problems.

Many of the world’s largest fashion brands recognize that customer experience isn’t their raison d’être. They understand they can benefit from external expertise to help them solve critical challenges in this area – such as spotting trends and patterns in data, shifting to new technologies, or engaging always-on, skilled, flexible, and multilingual teams which are passionate about delivering excellence for brands.

These leaders who had the foresight to see that their customer service teams were an asset in waiting are also the same leaders working with us to redeploy skilled people from solving problems to driving sales.

And so, in the middle of a strategic and fundamental business transformation, during a global pandemic, they can remain laser-focused on their core mission – creating the very best clothing collections for customers.

It could be like this for every fashion business. There is still enormous strategic and commercial opportunity to reposition customer service and experience, not as a ‘nice to have,’ but as a function that adds real value to customers and brands’ profitability.

For example, we re-engineered and digitized the customer service center of a luxury fashion client. This resulted in 50% of contacts being deflected into automatable digital channels and a 26% reduction in inquiries tracking orders. We also eliminated warranty claims, which had driven 40% of references to the center.

Operational efficiencies rarely ever hit the headlines – but at a watershed moment for the fashion industry, we believe these numbers can spell the difference between success and failure.

So, what’s new?

The pandemic super-charged online shopping, with e-commerce’s share of fashion sales almost doubling in eight months – from 16% to 29% globally, according to McKinsey’s 2021 State of Fashion report.

But with technology developing at pace, simply having the right platforms isn’t enough. The report also discusses the urgent need to give customers the best possible service and experience at a time that could still make or break scores of fashion businesses.

Three features for optimal customer service and experience:

1) Ability to deliver rapid change – Global fashion brands realized they couldn’t deliver rapid strategic change at scale – so they outsourced scalability projects to Webhelp. In return, they got immediate access to a multilingual team of 3,000 skilled and flexible colleagues who deliver a diverse range of customer services, leaving brands to focus on what they do best.

For example, when delivery problems suddenly hit Greece on Black Friday, we used our proprietary talent selection approach to help one global brand source skilled multilingual expert team members, who managed everything from an influx of customer service inquiries problems with logistics and deliveries. This agile approach created a flexible workforce that could optimize service during challenging market conditions in the lucrative run-up to Christmas.

2) Commitment to turn cost centers into profit centers – The smartest brands invest in automation technologies to help customers ‘self-serve’ problems online. For example, one fashion client recently introduced chatbots as part of a customer journey redesign and saw the average order value rise by 20% and customer engagement rocket from 2% to 30%.

This approach frees up agents to engage in personalized conversations with customers, aimed at showcasing options and increasing sales.

3) Deliver customer experiences led by multimedia, and interactive content – Digital traffic to the websites in the top 100 European brands surged by 45% in April last year compared with the previous month, according to McKinsey.

Simply providing a flat, copy-led website won’t be enough when brand leaders are using tech to push the boundaries of customer experience:

Video – When Shanghai Fashion Week went virtual and was live-streamed last year, it drew 11 million viewers with $2.75m worth of clothing and accessories sold directly to consumers. In China, live stream revenues hit $138bn last year due to lockdown – up from $63bn the year before. Meanwhile, in the US – live stream revenues are forecast to reach $25bn by 2023.

Brands like Zara experiment with video – customers who buy via their app can create a personalized video to send with a gift from the store.

Social media – Social media platforms – particularly Instagram – have configured their apps in a way that allows customers to buy direct from stores without leaving third-party sites. This marked a significant boost for fashion companies, which effectively gained another sales channel.

Brands should also continue to maintain strong conversations and relationships with customer communities via traditional platform activity. Again, advanced firms often trust us to deploy 800 people, speaking 20+ languages to manage this – with high rankings from NelsonHall – one of the world’s leading analysts in this area.

Technology – We also see several fashion brands racing to offer or improve existing online sizing tools to maximize customer satisfaction and reduce the massive amount of over-ordering and returns. Consumers have also shown significant interest in scan technology – typically smartphone apps that carry out 3D-body scans and supply accurate measurements to make online clothes shopping more manageable. An obvious example is ASOS’s See My Fit tool, a big hit with its customers.

Also, augmented reality (AR) continues to advance. For example, Dior has embedded AR filters within Snapchat to enable customers to ‘try on’ sneakers, hats, and other accessories. Meanwhile, Burberry’s AR shopping tool lets customers ‘embed’ or 3D-view products within their environment.

There’s no doubt that transforming customer service from a cost to a profit center marks another significant challenge for fashion businesses. But in a cut-throat market, the bravest course of action for many fashion businesses could be to work with partners who can help them reach their potential in 2021 and beyond.

Marta Lopez

Chief Commercial Officer,

Spain and China

Global Fashion Sector Lead

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Three top tips for de-risking your fashion brand's B2B channel

If ever any sector has demonstrated a determination to survive and thrive through adversity, it’s fashion.

COVID-19 has hit the $2.5 trillion fashion industry hard – forcing the closure of stores across the globe and hitting revenue by around 30% year-on-year in 2020.

The pandemic also triggered a rapid and urgent acceleration of e-commerce, omnichannel selling, and digitization, with omnichannel shoppers spending at least 34% more than their offline counterparts, according to The State of Fashion 2020 by McKinsey.

Meanwhile, the B2B fashion sector – including wholesalers, resellers, and e-shops – has also gained a renewed criticality: the opportunity to sell hundreds of thousands of items in bulk and keep inventory (AKA cash) moving has never been more vital.

In total, 82% of businesses fail because of poor management of cash flow. So, for all the consumer-facing tech in the world, getting paid on time by using the correct business processes and human interactions remains the best way to ensure cash flow and financial stability in the long term.

The fashion brands that will excel tend to see COVID-19 as a catalyst to manage risk – ramping up resilience planning and reviewing and adapting payment strategies ahead of new restrictions and consumer shifts.

But many executives tell us they are exhausted after an unforgiving year. They recognize that now is the time to focus on their core business – adding value and supporting competitive advantage.

Our team of 3,000 professionals speaks 25 languages and serves 50 of the world’s leading fashion brands operating in 35 countries. This includes providing outsourced credit management services for the wholesale channel from our regional hubs.

By removing these immediate pressures quickly, brands can achieve a rapid return on investment. This combination of human expertise and technology is key to success.

In our experience there are three keyways for fashion firms to balance their positioning, profitability, and cash flow managing their wholesale channel:

1) Build secure relationships using data – At a time of unprecedented risk of collapses within wholesale and retail, mid-tier firms must use data to drive robust decision-making on risk management, pricing, and payment strategy.

Many brands currently use a mix of credit insurance, external financial scoring, and access to their data to underpin strategies. But many of these methods are no longer sufficient or fit for purpose, at a time when guarantee coverage is low and trading conditions can change almost by the hour.

We manage relationships with 35,000 points of sale worldwide to collect live data from across the fashion industry, analyze the numbers, and report back anonymized data to clients every day to inform their decision-making. We collate these insights about potential risks into our screening processes, analyze client’s retail portfolios, make real-time recommendations (payment methods, payment terms, etc.) to enable everyone to make quick and robust decisions to develop safe business practice.

This enables brands to gain much better visibility and insight to protect themselves proactively from potential payment issues which may arise in the future.

There is no way to completely remove risk from any business, but prevention is better than cure, and the more insight you have about buyers, the better you can protect and adapt your business.

2) Support Global Growth – The wholesale fashion industry has shifted from 5% online to 30% online. As such, brands are managing an increasing number of sales channels, including multi-brand and department stores, resellers, and e-shops.

This rapid change is compounded by an increase in the level of complexity faced by fashion businesses when developing their buyer network across multiple regions and channels – all with different laws, rules, systems, languages, processes, and payment terms. Without care and engaging with numerous industry stakeholders, it’s easy to be caught out – for example, making mistakes on declarations, invoices, or process implementations, which your client would recharge to you.

To get this right, you either need to create your multinational multi-skilled team or tap into an existing network of professionals who understand and advise on navigating regional customs, payment methods, specific channel processes, and interdependencies within a fragmented and complex landscape of countries and clients’ specificities. Experts can also help you to implement new systems and procedures covering all new and existing trading areas.

3) Negotiate payment terms – It has perhaps never been so attractive for brands to optimize trade with wholesale buyers – selling hundreds of thousands of pieces in a single transaction.

But like D2C, the B2B fashion industry is also facing new risks.

First, there is a financial squeeze, as retailers who urgently need to add a mark-up and ensure profits urge wholesalers to seek discounts.

Then there’s an increased credit risk. Before the pandemic, the majority of fashion brands relied upon credit insurance to protect their stock and profits, knowing that insurers would indemnify them in case of clients’ payments default. But since COVID-19, insurers have dropped the level of coverage by around a third – putting much more orders at risk.

Without careful management, this combination of discounts, together with significant falls in consumer spending on apparel and reduced cover, could result in massive inventory build-ups.

Fortunately, it has been recognized that ‘one issue affects all’ – in an industry as interconnected as fashion, and stakeholders have worked collaboratively to implement a pragmatic response.

Many key resellers and wholesalers have increased payment terms from 30-60 days, which mid-tier fashion brands have widely accepted. Meanwhile, the bounce rate on payments has remained relatively steady at around 1%, despite all the challenges.

It is vital that fashion brands recognize this measured approach in any discussions with B2B buyers and negotiate terms in a way that offers a win-win on financial security for buyer and supplier.

We worked on behalf of a global US luxury fashion brand to manage relationships with 1,500 of its wholesale clients, and implement new payment systems.

As a result, the brand increased sales by over 5,000% over 12 years.

It has also ensured that the brand stays ahead of the curve with its omnichannel strategy and digital transformation.

We recommend engaging a team of professionals focused on providing end-to-end credit management services, from order to cash, to support your domestic and international markets. This includes matching your sales and finance strategies, automating financial processes whenever possible, transforming fixed costs into variable costs, negotiating payment terms, brokering the best credit insurance, and collecting receivables as quickly as possible to ensure cash flow.

This combination of people, processes, and tools will enable you to remove a significant amount of hassle, set the right levels of risk to boost a sustainable business, and secure your sales using best practices in credit management.

Looking ahead

The fashion industry went through a ‘perfect storm’ of challenges in 2020. But the hard truth is that 2021 is set to be just as tricky, with a likely global recession and the continued fallout from COVID-19.

Brands that balance their positioning, profitability, and cash flow will be best placed to realize the potential of brighter days ahead.

Axel Mouquet

President & Chief Executive Officer

Webhelp Payment Services

Global Fashion Sector Lead

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Rising to travellers’ expectations for the future of travel

What was once a favourite pastime is now looking very different due to this year’s events of COVID-19. Traveller behaviour has rapidly changed, with many opting to not take a trip at all this year. It has changed our ways of thinking towards travel, leading to historic transformation in organisations and society.

In 2019, the number of passengers boarded by the global airline industry reached over 4.5 billion people. At the beginning of 2020, this all changed. Travel unsurprisingly came to a halt due to coronavirus. The total number of flights began to decline by over 60%, according to Flightradar24 racking statistics. This was due to the nature of the virus, forcing governments to ground planes and stop all unnecessary travel.

Government guidelines progressively relaxed in June, allowing travel and leisure activities to resume and get back to some form of ‘normality’ to revive the economy. However, according to IATA, there wasn’t a significant improvement in passenger demand due to the lockdown and quarantine in some markets  with August’s traffic performance the industry’s worst-ever summer season: August international passenger demand plummeted 88.3% compared to August 2019.”

Rising to traveller’s expectations

Getting on a plane and travelling the world is not top of everyone’s bucket list at this moment in time. People are not travelling like they did before the pandemic. The uncertainty of ‘wave two’ is causing many people to become frustrated and emotionally unsettled for the future. And with markets imposing quarantine rules, it has impacted travellers wanting to go abroad altogether.

Travel is recognised as a sense of escapism – now fraught with concerns that were not always top of mind before: cleaning procedures, hygiene, or what places to visit.
Webhelp’s Travel & Mobility Sector Lead, Nora Boros states from our previous article “No matter what kind of trip is being taken, travel clients go through a myriad of emotions before, during, and after their journey – which will undoubtedly affect their consumer behaviour.”
The first wave of COVID-19 amplified these emotions; undoubtedly affecting consumers behaviours and expectations towards travelling and the industry overall.
Nonetheless, it enables organisations to augment and find alternative ways of transforming their servicing and offer travellers new ways of attaining the pleasure of wanderlust.

Health and safety are at the forefront of travelling now more than ever. Passengers are more inquisitive about hygiene policies and what exactly the process looks like before, during, and after flying – the same goes for domestic travel.

It’s not surprising many people have opted to not travel, go on a staycation, or save their plans for a trip in 2021. A Euronews poll surveyed four European countries – Germany, France, Italy, and Spain to identify travel plans which showed a comparison pre-COVID and now. Respondents from all countries had over a 60% decrease in travelling abroad, an average 50% increase in no travelling while domestic travelling stayed consistent between 24%-40%. A Statista survey showed “one third of respondents in the United Kingdom planned to spend their annual leave on holidays in the UK if travel abroad was still difficult due to lockdown restrictions. Over a quarter of respondents expected to spend more time at home.”

Travel influencing new ways of working

Although spending more time at home allows people to have time with their families and make more time for themselves, many people have had to shift to work from home trying to find and maintain a work-life-balance.

These changes have affected people’s behaviours concerning their place of work, inspiring people to seek alternative travel possibilities such as work from home, but anywhere.

“As we continue to adapt to the new ways of working, our work lives become more flexible”, Nora Boros states in our future of travel blog, “leisure travel will become blended with business needs, giving more consideration than ever to the concept of ‘Bleisure’.”

Introducing hybrid models of flexible working allows colleagues to work from home, the office or anywhere in the world. This could open-up longer trips for travellers who want to stay somewhere with office space, or result in an increase of international mobility for organisations to implement.

Webhelp has used the flexible working approach, Webhelp Anywhere with several clients to ensure the safety of colleagues while positively achieving business continuity. We have supported clients with their digital transformation strategy by identifying quick-wins and sustainable long-term objectives to phase through the crisis and transition into the new normal.

As we continue to phase through these uncertain times, it is an opportunity to invest in digital and operational transformation capabilities and become a differentiator in the market, as this will play a key role in helping travellers feel safe in their future travels.


Interested to learn more about these changes and travellers’ expectations for the future?

Watch our travel rebound webinar where we discuss how businesses can rethink their customer experience strategy and operational/digital transformation for 2021 and beyond.

Travel Webinar Video

Accreditations

Webhelp Payment Services is accredited to carry out a range of actions including international debt recovery for and on behalf of our clients .

Webhelp Payment Services is authorised as a Payment Institution by the French Prudential Supervisory Authority (ACPR*). Thanks to our status of Payment Institution we are able to operate across the European Economic Area.

Webhelp Payment Services is also registered with ORIAS*, the unique register of intermediaries, as an insurance intermediary.

*N° Code Interbancaire (CIB) : 16518E – Insurance intermediary registration number ORIAS: 12 064 847