For apparel retailers, customer acquisition and retention is a fast-paced challenge––but digital data offers a glimpse into successful strategy
Relevance, demand, and consumer tastes that are changing more quickly than ever: These are the challenges many apparel retailers are struggling to resolve as they remain determined to gain the loyalty of millennials, the largest consumer group in the United States.
For apparel retailers, the fall season is a particularly competitive and promotional period that sees the bulk of its revenue during the back-to-school cycle (typically July through September), and then also closer to Thanksgiving, when deals and promotions are heavy.
Bargains or no bargains, millennial-generated dollars are not always easy to come by. According to a recent study by America’s Research Group, nearly 60 percent of parents of millennials interviewed said they’d spend money more judiciously during the back-to-school season, and they’d perhaps consider spending more when holiday sales begin popping up.
So, how should an apparel retailer expect to secure a competitive advantage? One word: data. By analyzing facts about their target consumer base, retailers are poised to make smarter decisions. Data is derived from a variety of sources, from website traffic and social media to mobile devices and a consumer’s past spending habits and patterns.
In 2013, just over 20% of the information in the digital space was available for analysis, according to a report by analyst firm IDC. However, that figure could jump to more than 35% by 2020, IDC says, making it increasingly viable for retailers to achieve meaningful insight.
What exactly can digital data help retailers learn? For one thing, it can offer some understanding around trends––design, colors, materials, cuts and more. This helps retailers forecast when a certain trend is picking up steam or, conversely, when an older trend is dying out. (Teen apparel retailer Abercrombie & Fitch recently did away with $27 million worth of old inventory to increase their relevance in the market.)
Digital data can also help retailers act smarter about managing inventory. Millennials typically won’t wait for a great clothing item to be re-stocked in their size or the color they want––they buy something similar elsewhere. Digital information can help retailers pinpoint what to stock, and perhaps more importantly, where to stock it, thus enriching a regional (and even sub-regional) strategy.
Perhaps one of the biggest lessons to be learned from obtaining digital data lies in the questions retail decision-makers are asking––questions that center on enticing millennials, learning more about where they come from, increasing customer loyalty, and personalizing marketing strategies.
Of course, several of these considerations are seasonal in nature, and data can help predict the cyclical patterns of shifting dollars from one particular marketing channel to a different one. This helps retailers become more flexible with where, how and exactly when any particular merchandise is given the limelight. In the end, the goal is an equilibrium of meaningful data, long-term goals, short-term expectations, support from key decision-makers, and the greater ability to adapt to an ever-changing market.