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Fashion is leading the way in cross-border e-commerce purchases
E‐Commerce » Best Practice | 12.08.2015

Learning from the giants in fashion retail

 

Fashion is leading the way in cross-border e-commerce purchases, as consumers hunt out the latest brands and international styles. But how can smaller retailers keep up – let alone compete – with the big success stories such as ASOS and Zalando?

Clothing and footwear are the most common cross-border purchases

In many countries, such as Germany and Norway, the fashion sector represents a third of all e-commerce turnover. And it’s posting strong growth. According to the UK’s online retail association IMRG, the country’s fashion retailers saw online sales grow 296 per cent in the five years to December 2014.

International sales paint a similar picture of strength. Google’s Consumer Barometer, for example, shows that clothing and footwear are the most common cross-border purchases – with more than 30 per cent of international shoppers in Sweden, Switzerland and the UK buying them.
Fashion bought in online shops

 
The return barrier

 
But fashion is also a very competitive sector, and retailers both large and small have a very tricky issue to deal with: returns.

With issues of size, colour, fit and personal taste, return rates are unsurprisingly high. In Germany, Italy and Switzerland, they have already hit 40 per cent.

Free returns are quickly becoming a must have

Although retailers are improving the information they provide online to minimise this – including better sizing details and, in some cases, virtual fitting rooms – consumers are also growing more comfortable with buying two sizes of the same garment with the intention of returning one of them.

One of the reasons they are increasingly happy to do this is the widespread availability of free return services. This was introduced by German e-tailer Zalando, which used the tactic to beat local competitors in the new markets it was expanding to, and has been quickly replicated by all the major players.

“Free returns are stealing the show,” says David-Alexandre Krupa, sales excellence manager at Asendia. “They are quickly becoming a must have. Consumers also need to know the returns process will be easy for them.”

He admits that this is easier for the retailers that have scale, but smaller companies can still replicate some of the strategies they use. UK retailer Asos, for example, has local warehouses to facilitate returns and reduce the costs involved. In a similar way, smaller players can outsource their returns so they too can service returns at a local level.

 
Finding a fashion niche

 
In fact, Asos does charge for international returns, but it has a strong reputation that encourages consumers to overlook this barrier. Other retailers might not be so lucky, as Krupa says finding recognition in a new market is the other major issue they are likely to face.

“As the sector is so competitive, we recommend retailers find a niche with specific products or fashions. Competing on price is often not an option,” he adds.

And a simple lesson that smaller players can learn from the fashion giants is to adapt their offering to the different markets they target, Krupa advises. This often includes developing local language websites, with local payment and currency options, as well as tailored product ranges to suit different tastes.

Again, smaller businesses might struggle with the costs involved in doing this, but there are technological solutions available that help with translation and currency conversions.

“Marketplaces are also becoming a popular way to test new markets with limited product ranges, if retailers don’t have the infrastructure to do this,” says Krupa.

Competing with giants always takes something special, but retailers of any size that focus on the right products and offer good levels of service stand a far greater chance of success.

For more information on how Asendia can help, go to ecommerce.asendia.com or www.asendia.com/returns

 

 

About David-Alexandre Krupa
As Sales Excellence Manager for Asendia, David-Alexandre is in charge of conducting sales training for all Asendia subsidiaries. In the 16 years in the postal industry he worked for various international mail and logistics companies. He is proficient in several languages incl. French, English, Spanish, Italian, Swedish and German.