By Ken Price, Founding Partner, Blake Mill.
Having worked within financial technology, risk and data management for the majority of my career, I have found the transition from this sector to fashion ecommerce both fascinating and challenging. Most surprising to me was the applicability of the data quality and analysis disciplines I used in the financial sector to building and rapidly growing an ecommerce fashion business.
There are of course many big differences between running B2B technology and data companies and a D2C (that’s ‘direct to consumer’ for the uninitiated) fashion business. In my role at Blake Mill (www.blakemill.co.uk), an ecommerce pure-play selling individual and irreverent men’s shirts (designed with high-flying data management types in mind), I am witnessing, first-hand, the dramatic changes reshaping this industry.
Few industries have changed more radically in recent years than fashion. From the meteoric rise of fast fashion to the decline of the high street, the sector has in recent years lived through an extended phase of turbulence and disruption.
Technology – and ecommerce in particular – has been driving much of this change, though practices such as sticking with strictly defined fashion seasons and all of the costs associated with creating and distributing samples, distribution networks and seasonal trade shows are still frustratingly prevalent.
On the other end of the scale is the growth of ‘fast fashion’. More than 20 billion tons of unwanted textiles are sent to landfills each year. Consumers are purchasing more clothes, and keeping them for half as long, driven by fast fashion, fast marketing and a digitally driven thirst for newness.
We are striving for an optimized fashion business model; one that leverages data and analytics in our effort to build a profitable and fast-growth business that respects core values including sustainability and ethical treatment of all participants in the supply chain. In our experience, applying data and analytics to predict consumer behaviour and to forecast demand (and supply) has been key to garnering a loyal tribe of regular online buyers. It has also been instrumental in reducing waste, helping us to realise our ambition to create ethically sourced, sustainable products.
The global fashion market is big – roughly £1 trillion, excluding footwear and jewelry as per a report by CO Data in May of 2018. According to Grand View Research, 83.3% of this market comprises offline purchases. It won’t come as a surprise therefore that while the overall global fashion market is expected to grow close to 6% per year according to Statista, they estimate ecommerce sales in the global fashion market to grow by 12.2% annually up to 2023.
A Rapidly Changing Market
Based on our experience, there are several areas where ecommerce has had a profound effect on the fashion industry. The rise of giants such as ASOS, Boohoo and Missguided (the latter two based in Manchester, UK, in itself fast becoming an ecommerce fashion mecca) is one of the most obvious manifestations of the inexorable triumph of ecommerce, even in testing economic times.
Data and Analytics
In our experience, ecommerce is more than simply having a platform upon which to sell your product. The platform itself is of course hugely important, and these days suppliers like Blake Mill have a wide range of options best suited to their business, their product and of course their budget.
In our experience however, the real value stems from the insights that businesses such as ours are able to get from these platforms. The ability to make real-time business-critical decisions that are informed by empirical evidence and data has been a massive game-changer for industries such as fashion, where change is not only incessant but also very fast. Insight from analytics and related data sources has allowed Blake Mill as a business to take major strides forward in areas as varied as inventory management, customer satisfaction and product development.
The increasing sophistication of the broader ecommerce ecosystem not only bolsters the ability of vendors to get invaluable insights into customer behaviour, but also correspondingly enables those customers to benefit from a vastly enhanced user experience. Personalisation tools, often bolstered by artificial intelligence, have made a huge difference to the customer experience on-site, and going forward the rise of voice search, AR and VR will let even small businesses create virtual fitting rooms, personal shopping assistants and much, much more.
Social Media Impact
Social media plays a major part in any ecommerce business. Facebook is a hugely important marketing tool, and Instagram has been a fertile breeding ground for many fashion businesses, boosted significantly by the rise of influencer culture. It’s also important to mention that social allows ecommerce businesses to have 1-to-1 conversations with customers, and to create a real sense of community based upon the customers’ love of the product and/or brand. Companies like Charlotte Tilbury have really harnessed this sense of community, which when coupled with a well-designed and robust platform can drive revenue growth without compromising brand value.
And community is not just about selling. We’re now able to more meaningfully respond to real concerns that our customers have, and deliver that message in a personal and human way across several channels. At Blake Mill, we know our customers take sustainability very seriously – as do we – and that’s a message that is always front and centre when we converse with the Blake Mill community.
On a more operational level, we’ve found the ability to target potential customers at a very granular level to be hugely beneficial. Furthermore, these insights allow a business to monitor ROI much more effectively; in an industry where daily revenue volatility can be extremely high, the ability to apply financial market tested technical analysis such as tracking 10- and 30-day moving averages is invaluable when considering product placement and marketing spend.
It’s fair to say that technology more widely, and ecommerce in particular has already had a profound impact on the fashion industry. But this is only the tip of the iceberg. The ability to make key decisions, based upon real data, the rise of AI, and the increasing sophistication of not only ecommerce platforms such as Shopify and Magento but also of the broader ecosystem, means that the frantic rate of change in the fashion industry will continue. Ultimately this will benefit not only businesses but also customers.
(Before founding Blake Mill, Ken Price worked within financial technology, risk and data management in businesses including Toronto fintech startup Algorithmics, Silicon Valley startup Strevus, reference data shared services pioneer Avox, and Identity Data specialist, Warp Global.)