UNIVERSITÀ COMMERCIALE LUIGI BOCCONI
2012/2013

HARMONIZATION OF THE DIGITAL AND
PHYSICAL SELLING ENVIRONMENTS:
CROSS CHAN...
LITERATURE REVIEW

WHAT IS CROSS CHANNEL RETAILING?

MULTI-CHANNEL
RETAILING

CROSS-CHANNEL
RETAILING

OMNI-CHANNEL
RETAIL...
LITERATURE REVIEW

VALUE OF THE CROSS CHANNEL SHOPPERS
informed
connected

multi-channel
user
expect the brand to
know his...
EXPERIMENTAL ANALYSIS

STUDY OBJECTIVE
Understand how cross channel strategies will develop unique advantages to fashion r...
EXPERIMENTAL ANALYSIS

RESEARCH QUESTIONS AND METHODOLOGY
WHICH ELEMENTS OF CROSS CHANNEL RETAILING HAVE POSITIVE IMPACT O...
EXPERIMENTAL ANALYSIS

REGRESSION RESULTS
Of the twenty hypotheses, five support positive relationships between cross chan...
EXPERIMENTAL ANALYSIS

FASHION SHOPPERS – CLUSTER RESULTS

"I come into the store because it is located
in the mall near m...
EXPERIMENTAL ANALYSIS

FASHION SHOPPERS – POSITIONING MAP
MANAGERIAL CONCLUSIONS

MANAGERIAL IMPLICATIONS – HARMONIZED CHANNELS

7% of apparel
retailing is
done online or
via mobil...
MANAGERIAL CONCLUSIONS

75% of
respondents
research
online before
buying in a
offline store

STORE AS SHOWROOM
Showroom wh...
MANAGERIAL CONCLUSIONS

MANAGERIAL IMPLICATIONS – FUTURE TRENDS
Mobile

Newsletter
M-commerce

Personalized e-mails

Loyal...
MANAGERIAL CONCLUSIONS

ADVICES FOR FASHION RETAILERS

BE
CUSTOMER
ORIENTED

CUSTOMIZE
CROSS-CHANNEL
STRATEGIES

SHOPPERS ...
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Cross Channel Harmonization: fashion retailers strategies

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The digitization of retail has deeply changed shopping experience, especially for what concerns the apparel business. The consequence is that now the store is everywhere: in the shopper’s pocket, in his house and office or at the mall. With more and more sales shifting online each year, most fashion retailers are facing one of the biggest challenge of the new millennium: how do they satisfy consumers’ expectations of a seamless shopping experience? This work will try to answer to this question. At first it will be analyzed, both qualitative (with a survey) and quantitative (with results analysis), how consumers have changed the way they shop, how they make purchasing decisions and what they expect from fashion retailers. Shoppers are becoming more indifferent about which medium they use to make a purchase. When they purchase online, for example, they expect their orders to be processed straight away, and be shipped to their home as soon as possible, or, if they are shopping in a store, they expect to easily and quickly check for promotions or lower prices in a kiosk, without having to ask to a store employee. All it matters is to have the right product at the right time in the right place. As a consequence, I’m going to investigate best practices and how fashion retailers must find new ways to meet consumers demand regardless of the channel in order to boost sales, by implementing a cross-channel offering, one in which the consumer can move between channels without any resistance.

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Cross Channel Harmonization: fashion retailers strategies

  1. 1. UNIVERSITÀ COMMERCIALE LUIGI BOCCONI 2012/2013 HARMONIZATION OF THE DIGITAL AND PHYSICAL SELLING ENVIRONMENTS: CROSS CHANNEL STRATEGIES IN FASHION RETAILING. Dissertation by: FEDERICO NARDINI University Number: 1343623 Supervisor: SILVIA VIANELLO MSc IN ECONOMICS FOR ART, CULTURE, MEDIA AND ENTERTAINMENT
  2. 2. LITERATURE REVIEW WHAT IS CROSS CHANNEL RETAILING? MULTI-CHANNEL RETAILING CROSS-CHANNEL RETAILING OMNI-CHANNEL RETAILING Ipsum Consumers can shop across different channels which function separately from one another, operating in technological and operational silos fashion retailers are 4th in terms of cross channel capabilities Consumers can shop across channels and perceive these channels as part of the same brand. The Channels are integrated oneanother and the customer experience is harmonized through them Consumer does not perceive channels at all, simply a brand. All channels are served by common set of technology services Apparel benefited the most from cross channel capabilities
  3. 3. LITERATURE REVIEW VALUE OF THE CROSS CHANNEL SHOPPERS informed connected multi-channel user expect the brand to know his needs moves seamlessly through channels brand loyal Cross channel shoppers buy more often, both in terms of numbers of item purchased and both in terms of spending. They are more valuable to fashion retailers than other kind of shoppers
  4. 4. EXPERIMENTAL ANALYSIS STUDY OBJECTIVE Understand how cross channel strategies will develop unique advantages to fashion retailers, understanding which cross-channel elements can influence apparel’s sales THE APPLICATION FIELD OF THE ANALYSIS IS FASHION RETAILING WHY CROSS CHANNEL IN FASHION RETAILING? It’s a hot topic that positively influence sales, loyalty and brand awareness. It helps to create a dialogue and a deeper relationship with the consumer, and allows to be flexible to customers’ changing preferences and needs. According to the literature review fashion retailers benefit the most from cross channel strategies, even if they are still behind in terms of implementation of cross channel capabilities.
  5. 5. EXPERIMENTAL ANALYSIS RESEARCH QUESTIONS AND METHODOLOGY WHICH ELEMENTS OF CROSS CHANNEL RETAILING HAVE POSITIVE IMPACT ON APPAREL’S SALES? Integrated marketing? Click&Collect&Return? Advanced technology? WHICH TYPES OF CROSS CHANNEL SHOPPERS EXIST IN FASHION RETAILING? METHODOLOGY Preliminary Analysis qualitative interviews in order to identify cross channel elements in fashion retailing Qualitative Analysis Online and offline survey, in order to understand fashion shoppers’ buying behavior Quantitative Analysis Multiple regression analysis in order to examine the hypothesized relationships Experiments Cluster analysis in order to classify respondents into homogenous fashion shoppers’ groups
  6. 6. EXPERIMENTAL ANALYSIS REGRESSION RESULTS Of the twenty hypotheses, five support positive relationships between cross channel elements and increase of sales, while three support negative relationships. CLICK & COLLECT & RETURN Buy online, same day pick up in store Buy anywhere, deliver home Buy online, return in store Buy online, return via express mail Buy in a country, return in another Buy and free delivery Buy and free return Buy through mobile Buy through social media INTEGRATED MARKETING Targeted recommendations and promotions online Redemptions of coupon and offers both online and offline Personalized e-mails based on one’s interests and tastes Targeted advertising on search engines Presence of the fashion brand on multiple social media ADVANCED TECHNOLOGY Updated and always accessible customer’s dataset Understanding of customers’ previous purchases (both online and offline) In store technologies (kiosks, tablets, magic mirrors, etc.) Payment option through mobile Animated and digital shop windows Mobile friendly websites Dependent variable: “Have you spent more in clothes since you started shopping across channels?”
  7. 7. EXPERIMENTAL ANALYSIS FASHION SHOPPERS – CLUSTER RESULTS "I come into the store because it is located in the mall near my workplace/home» "I use the web to gain information on the clothes, but then I want to touch and try the clothes I have chosen" "I enter the store where it happens, I look at the prices and compare them with my smart-phone: I buy where it costs less, on the internet or through my mobile” 56% of respondents 24% of respondents 20% of respondents Ipsum  Research and buy in store Touch and try the items and check what else the retailers has in store Follows the brand online, but doesn’t use mobile apps or in store technologies Gain information, compare products and prices online , but prefer to buy in a physical stores Research online or in store, but buys online, or through mobile, tablet and social media At least 2 channel before the final purchase More than 2 channels before the final purchase Sensitive to promotions, offers and to targeted advertising Scan barcodes, mobile apps and in-store technologies The more we understand the customers, their buying behavior, and their interests and needs the more they can be targeted with advertising, promotions, cross-sells and up-sells
  8. 8. EXPERIMENTAL ANALYSIS FASHION SHOPPERS – POSITIONING MAP
  9. 9. MANAGERIAL CONCLUSIONS MANAGERIAL IMPLICATIONS – HARMONIZED CHANNELS 7% of apparel retailing is done online or via mobile Online and physical channels will grow in parallel Digital channels will cannibalize the physical channels? IN STORE TECHNOLOGIES Thanks to cross channel elements, the brand loyalty to a specific retailer is going to increase, and for this also the spending with their favorite fashion retailer will. In 2015 it is expected to grow to 16% Consumers are not just shifting the buying process to another channel, but they are actually spending more online with their favorite retailers, the one which can best meet his needs and expectations.
  10. 10. MANAGERIAL CONCLUSIONS 75% of respondents research online before buying in a offline store STORE AS SHOWROOM Showroom which drives revenues across all channels (online, in store, mobile, etc…) and augment the brand experience. IN STORE TECHNOLOGIES CONNECTED FITTING ROOMS In store technologies as a support for the connected costumer, in order to entertain and meet customer expectations THREATS 80% of respondents prefer to buy in a physical store BENEFITS MANAGERIAL IMPLICATIONS – THE CONNECTED STORE    Bigger range of products and collections (different sizes, colors, etc…) Elimination of stock problems The consumer can’t have the product immediately SOLUTION: provide appealing delivery proposition, and click and collect options Tablets Virtual shelves Kiosks Animated shop windows Magic Mirrors Connected Fitting Rooms Virtual Catwalks Invisible Technology The perfect solution is to associate the sales to a physical shop rather than to a digital channel: this means that in fashion retailing, all the online channels must converge into the physical one.
  11. 11. MANAGERIAL CONCLUSIONS MANAGERIAL IMPLICATIONS – FUTURE TRENDS Mobile Newsletter M-commerce Personalized e-mails Loyalty cards/coupons Integration with socials Credit-card Optimize experience Mobile app/QR codes Re-targeting Social Display adv F/T/G/P - commerce Focus on keywords CRM/Customer service in line interests & needs Find/share information Attract target audience Targeted advertising Re-target Digital channels let fashion retailers engage with shoppers in new ways, starting a dialogue that opens the doors to more sales, a greater loyalty and more business opportunities.
  12. 12. MANAGERIAL CONCLUSIONS ADVICES FOR FASHION RETAILERS BE CUSTOMER ORIENTED CUSTOMIZE CROSS-CHANNEL STRATEGIES SHOPPERS ARE READY, AND COMPANIES?
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