While it’s true that the fashion and apparel industry has become the largest B2C ecommerce market segment in 2020, this also means there is a lot of competition for businesses trying to succeed in capturing buyer’s interest and increasing their revenue.
With the current state of the worldwide pandemic, the ecommerce industry has boomed; its growth has continued to increase so much that experts estimate retail ecommerce sales will reach $4.13 trillion this year alone. We’ve been watching these trends rise since the start of this year, and we’ve noticed many apparel brands seeing their sales skyrocket using personalization tools like Facebook Messenger and SMS flows and campaigns, opt-ins and paid ads. In fact, one apparel brand made an additional $400,000 in 60 days through just Messenger and SMS.
In order to understand how to grow a clothing brand, how businesses can stand out among the competition in this space and how to make themselves profitable, we asked 10 ecommerce experts for advice. This article will share 10 tips from these experts, apparel industry statistics and more, so you can learn how to optimize your business for the best results. First, let’s talk about some industry trends
Starting in 2019, the fashion and apparel industry saw a major spike. In fact, the global ecommerce fashion industry is projected to grow to $713 billion by 2022. The latest fashion industry data from Shopify Plus suggests businesses that stand out to consumers are the ones with advanced technological innovation that allow for deep personalization, the ones being endorsed by popular influencers and those that promise ethical and sustainable shipping and manufacturing.
The other big part of ecommerce fashion industry success is by prioritizing the customer experience before anything else. Focusing on the people that would be interested in purchasing your products and what makes them tick is the goldmine for online apparel market success.
One brand doing extremely well with the customer experience is Nuuly, which states right on the homepage of their website that “Nuuly is about discovering something new, loving something you never expected and surprising yourself in the best possible way. It’s about getting creative with what you wear every single day—not just on special occasions.” This is entirely focused on the customer, rather than just the product.
Aside from these trends that the Shopify Plus guide shares, there are other simple tips and tricks that merchants can use to better the customer experience and increase sales. Let’s finally look at what the industry experts had to say about this on Twitter!
We reached out to 10 experts to ask them how they would ensure a profitable fashion/apparel business. And, how they would stand out amongst all the competition.
Hey DTC Twitter! 👋
I need your expertise for a question! For fashion/apparel ecommerce brands, what tips do you have to ensure a profitable business? 👙👗👔
There’s a lot of competition here—how can brands stand out? 🤔
— Tina🌸 (@Tina_Donati) August 3, 2020 This is what we learned:
You may have thought it’s best to have a high item stock to ensure every customer has a chance to purchase something they love, but you’re actually getting rid of the sense of urgency by doing this. Deb Mecca mentions Johny Cupcakes as an example of a brand with a great story and urgency factor.
1/2 I agree with the story but I will always push that narrative & everyone is prob sick of me saying that@JohnnyCupcakes does a great job at the story & the urgency factor of inventory. He carries a set number of each design drop & if you miss it, it’s gone forever. Loyal fans.
— Deb (@DebMecca) August 3, 2020 By dropping new products for a limited time and with limited stock, you’re telling your customer base they only have one chance to grab that product before it’s no longer available. This automatically makes the item seem more valuable, and it eliminates the hesitant customer thought process of “I’ll come back and buy this later.” In fact, Experian conducted a study that found using urgency in email subject lines increased transaction rates on sales by 16%.
Adding on to the previous point about creating urgency, a great way to get your customers excited again is to announce back-in-stock styles. Lucas Walker mentions that holding on to less inventory helps brands avoid deep discounting in an attempt to get rid of that stock, but it also gives you the opportunity to announce these items are back if they were successful at selling out before.
Hold onto as litttle inventory as possible.
It prevents discounts and creates urgency.
Back in stock plus a preorder gives you cash upfront.
Also limit styles. Black and two others.
Any others @kristisoomer?
— Lucas Walker (@WalkerLucas) August 3, 2020 These back-in-stick campaigns give businesses cash up-front from customers that missed the opportunity to purchase before. When your buyers know that items can easily sell out again, they won’t hesitate to purchase these items a second time.
Also, limiting colors is beneficial for your business too. When you have the same shirt available in five different colors, you’ll have a difficult time trying to sell all of those items, which in turn leads to your business having to do large sales promotions just to clear out those items.
This is why the apparel brand, Live Love Gameday, creates urgency with their abandoned cart messages that tell customers the products they’re looking at are almost sold out. This is part of the strategy that led to them increasing their revenue by 17%. If you want to learn more, you can read the full case study.
How does your business connect with its consumers? Having a strong mission or brand story to share is a major part of some of the best fashion ecommerce businesses success. Beyond having great products, you want your customers to actually connect with your brand and build an emotional relationship with it. This is how you turn customers into brand advocates who shop at your store for their lifetime. Kristen LaFrance touches on this point here:
Quick answer:
Stand for something (and actually STAND for it, ahem, Everlane). Have a founder story (and founder) that truly connects with people (@helena or Ty @OutdoorVoices), create new experiences (@shopnuuly), hold momentum with unique product drops (@supremenewyork).
— Kristen LaFrance (@kdlafrance) August 3, 2020 One of Kristen’s examples is the brand, Outdoor Voices. The mission statement for this fashion brand is clear right on the homepage of their site: They want to get the world moving to make people feel happy. They want to close the gap between gym life and everyday life through comfortable clothing that’s suitable for moving your body and enjoying your day. This statement immediately connects with those who enjoy staying active throughout the day but want to be fashion-forward as well.
Understanding how the clothes will make a customer feel is an important value to highlight as well. For people specifically looking for comfort, they want to hear it from the brand directly that the clothes will provide exactly that. As Katya Sapozhnina points out, describe more about the clothes to customers than just the overall look.
I would focus more copy on how comfortable the clothes are. At a time like this, when I’m either at home or at a park, I reallllly care about how comfortable I am. And I often don’t buy clothes online because I can’t touch so I worry it won’t be soft / comfortable enough.
— Katya (@katyacares) August 3, 2020 Mandi Moshay reflected on this statement as well by saying businesses must have a unique value proposition and compelling brand story in order to stand out from their competition in the ecommerce apparel industry.
Piggybacking on @kdlafrance it’s all about a unique brand/product. A UVP makes storytelling and positioning easier and more compelling. Younger consumers in particular have strong bullshit detectors. Quality product + brand integrity=customer retention.
— Mandi Moshay (@MandiMoshay) August 3, 2020 However, it’s important to ensure your brand story and selling proposition is actually aligned with what your business does or stands for. Customers will notice if your actions differ from your brand story, so be true to yourself and your customers to ensure integrity for your business and your products.
One point that Samar Owais suggests is to make sure the customer experience is completely hassle-free. According to Nielsen, 92% of people trust recommendations from friends and family over any other type of advertising. This is why word-of-mouth marketing is an extremely powerful method to acquire new customers and retain previous ones. However, as Samar mentions, this customer experience can be easily soured once customers experience friction.
In addition to everything @kdlafrance, @AaronOrendorff, @WalkerLucas have said – nail your customer experience.
We sometimes underestimate word-of-mouth marketing for DTC brands but nothing sours a customer faster than a hassle-filled experience.
— Samar Owais (@samarowais) August 3, 2020 Whether it’s through optimizing the checkout process or ensuring you have customer support readily available to answer questions, you want to make shopping at your story simple and enjoyable. Simple experiences lead to happier customers who will happily come back and purchase from you again and again.
Adding on to the customer experience, an area that can easily add friction, especially in ecommerce, is your business’ return policy. This idea came from Martina Cronin, a Loop Returns alumni.
Focus on retention in any way possible- one of the biggest things I took from my time at Loop is to spend time developing the best returns experience for clients. Returned product isn’t a problem, a great experience ensures repeat customers, regardless.
— Martina Cronin (@martinacronin) August 3, 2020 When it comes to fashion and apparel ecommerce businesses, returns are completely normal, especially since customers can’t try on clothes before purchasing them. However, having a difficult return policy creates unnecessary friction for customers that will deter them from ever shopping at your store again. Like Martina says, customers returning products isn’t an issue, but making returns impossible is an issue for your business when those customers tell others about the difficult experience.
There’s nothing better than finding a size chart on an apparel website that clearly outlines exactly how everything will fit. According to Dynamic Action, online clothing sales have about a 20-40% return rate, and 77% of those returns are due to poor fit. So, not only will you reduce your amount of returns with an accurate size chart, but you’re also ensuring customers feel confident about the sizes they choose when buying your products.
2/2 ALSO, since it’s apparel, size matters. Giving your customers as many options as possible to gain the trust that the clothing will fit is essential in capturing those well-coveted conversions. 360 views, UGC, size guides, videos, throw it all out there on the product pages.
— Deb (@DebMecca) August 3, 2020 To step up your sizing even more, make sure you sell a broad range of sizes to suit every body type. Use images that show your images on models with various body types, showcase 360 views and even share videos on every product page so customers get a clear view of what your products look like on real people. Deb mentioned MeUndies as a brand with a clear size guide.
Patrick Campbell has seen a lot of apparel brands with subscription or membership models succeed because of the direct connection it builds with customers. He breaks down the core of a subscription model and membership model here:
One other successful strategy we’re seeing emerge is using the membership on top of a box of the month or on top of one off purchases. Think of it like a rewards program, but instead you have members who: — Patrick Campbell (@Patticus) August 3, 2020 By using these methods to build relationships with customers, Patrick says they see members and subscribers pay between 30%-50% higher AOV per order, and the lifetime value increases by 50%-250%. One business that’s using the membership model extremely well is Italic. Their membership program gives customers access to amazing deals, and it’s so popular that there’s even a waitlist for people to become members!
Shopping is about to change—for good. Starting today, members gain access to the entire line of 1000+ products, at cost.
No brands, no markups, no middlemen (not even us)—just the perfect pieces, at the perfect price, always.
Join the waitlist today at https://t.co/jFIU2ZY9p5 pic.twitter.com/WMcJfi1DYg
— Italic (@italic) July 21, 2020 This type of exclusivity works well for customers because they desire to be included in the list of VIP people that have access to these discounts. Subscription and membership models aren’t just for food and beverage brands, they’re a successful strategy for the fashion and apparel industry too.
A few tips by Aaron Orendorff are about learning how to make short-term profit while still providing a valuable customer experience long-term. His tips are about focusing on retention marketing around a 30:100 ratio. According to the Common Thread Collective blog, the 30:100 ratio is about increasing your brand’s customer lifetime value by 30% in 60 days and by 100% in a year.
(1) SKU-specific — or, collection-specific — paid funnels centered on COGS + CAC instead of single-account ROAS
(2) Determining 60-90-day LTV (payback windows) by first-product(s) purchased
(3) Retention marketing unique to one and two that aims at 30:100
— Aaron Orendorff (@AaronOrendorff) August 3, 2020 Another great point by Mandi is to figure out what products or category of products have a higher repeat purchase rate or customer lifetime value and use those to continue acquiring new customers. Share stories about these hero products to customers on an individual level so they understand how your product will shape their life in a positive way.
Getting more tactical: figure out your hero product/category (the products that lead to repeat purchase and high CLTV) and lean into them for acquisition. Utilize retention channels (emails + SMS) to cross-sell and deepen the relationship.
— Mandi Moshay (@MandiMoshay) August 3, 2020 This advice is especially useful for apparel businesses that sell a large range of products. When you have a lot of great products, it’s important to focus on the few that you know do extremely well. Since your current customers love those specific products, your target market will likely be interested in them too. Don’t forget to also use these products to increase customer retention by recommending them through your marketing channels, as Mandi suggests.
Matt Goldstein says it’s important to develop your growth loops with your newly acquired customers. This is to increase your repeat purchases and referrals, ensuring you have a community that continues to shop at your store and new potential buyers discovering your brand through the referrals.
1) Expand focus from “profitable” to “cash-flow positive” — focus as much *or more* on cash flow as you do unit economics
2) Develop growth loops with customer lifecycle & referral/community efforts (acquisition👉repeat👉referral)
3) Measure marginal profitability of marketing
— Matt Goldstein (@GoldsteinMatt_) August 3, 2020 He suggests incentivizing customer loyalty and advocacy is one way businesses can do this.
On growth loops:
The more you can squeeze out of every acquired $ of sales, the more sustainably you’ll grow.
-Incentivize customer loyalty This increases your CAC threshold if $1 becomes $3-$4+ reliably.
— Matt Goldstein (@GoldsteinMatt_) August 3, 2020 Consider adding a loyalty or referral program as part of your apparel business so customers can get excited about the gamification techniques you offer to bring them back for repeat purchases. Matt also suggests to be mindful of your return on ad spend as your investment increases.
On marginal profitability:
As you scale marketing, measure how ROAS changes as investment 📈
If $100 spent = 3x ROAS & $200 spent = 2.5x ROAS, what you really have is:
$100 @ 3x ROAS Profitable *total* ROAS can hide unprofitable spend.
Be mindful of it.
— Matt Goldstein (@GoldsteinMatt_) August 3, 2020 These experts have a ton of great strategies and tips for scaling your fashion or apparel business. However, success starts with your customers and how you can get them to start interacting with your business. Using some of these techniques, you’ll start personalizing the way you engage with your target marketing, share stories they care about and want to interact with, and build a community of loyal brand advocates that will share the word of your business with their peers.
And if you want to learn more about how one apparel brand grew their revenue by 17% using personalization, you can download our free case study that shares the exact strategy Live Love Gameday used to succeed!
Fashion industry trends and why the best apparel websites do so well
10 tips for growing your apparel brand
1. Create inventory urgency with limited items
2. Create back-in-stock campaigns and limit colors
3. Share a strong mission statement or brand story
4. Nail the customer experience with frictionless interactions
5. Offer a great return experience
6. Be transparent about how your sizes work
7. Build a direct connection to customers with a subscription or membership model
3/
8. Don’t wait a lifetime to increase your LTV and customer retention
9. Leverage acquisition with your hero product or category
10. Develop growth loops with customer lifecycle and community
-Incentivize customer advocacy
-Build a community of passionate fans
$100 @ 2x ROAS
Growing your ecommerce apparel business starts with your customers
The 250+ Page Playbook on Facebook Messenger & SMS Marketing for Ecommerce
Fast-growing DTC brands implementing this playbook have connected with 18x more customers, doubled their 7-day ROAS, recovered 5x more abandoned cart revenue & increased AOV 25%.
This article originally appeared in the OctaneAI blog and has been published here with permission.
