[Fashion] - 4 tips to make payments easier and more secure in Europe and the US
For fashion brands, the European and United States markets are strategically very important. But there are some risks when it comes to payments, especially with department stores and e-commerce sites. Anke Glaser, General Manager of Webhelp Payment Services for Central Europe, offers some advice.
1. Fashion brands should make the most of the momentum driven by departments stores and e-commerce sites
Over the last 2 or 3 years – and especially since the health crisis – online sales have really flourished in the fashion industry, both in Europe and in the United States. This growth is mainly due to department stores, which already have a digital strategy, and e-commerce platforms.
This trend is explained by companies investing more and more in digital technology generally – in England, spending on websites and online sales platforms went up by 30% in one year. In the United States, department stores can account for up to 70% of suppliers’ turnover. We can also see this trend in Spain where the leading Spanish department store has made its digital development a major focus in its development strategy.
We therefore recommend taking full advantage of this momentum, driven by departments stores and e-commerce sites, because we think it’s one that is going to last!
However, while digital strategies are undeniably seeing a surge, we remain convinced that the physical component is still vital, and that the crisis will lead to an offering that combines human and digital solutions.
2. Protect yourself against the problem of deductions
Brands have to comply with the conditions imposed by department stores and e-commerce platforms, which generally have very strict rules, at the risk of having to deal with chargebacks. In practice, whichever country you’re in, department stores and platforms rarely make a payment for just one invoice. Usually, they send us a payment advice: a document summarising all the invoices to be paid. Added to these are debit notes or chargebacks that are deducted from the payments. For a brand, it is important to be aware that these practices, which can be for many different reasons, are widespread.
Webhelp Payment Services manages debit notes directly for department stores and platforms. We check them, as agreed with the brand, and if the deductions are not totally justified, we dispute them with the department store or the platform. Our regular contact with the stores and platforms means that we can speed up the processes and so resolve any disputes faster.
Every year, this work by our experts, dedicated exclusively to managing these key accounts, helps our clients’ brands recover substantial amounts of money, as well as giving them a clear overview of the buyer’s current situation.
The benefit: if the Order to Cash process is under control, those involved in distribution generally pay on time.
3. Know how to manage the complexity of accounting documents for department stores and e-commerce platforms and avoid mistakes
Each season, brands receive documents with a lot of items to reconcile, from department stores and platforms. This involves a considerable amount of work for their accountants!
We have developed a specific reconciliation and comparison tool for documents that come from department stores and platforms. It makes the accounts much easier to understand, and means we can analyse the source of chargebacks.
Our dedicated customer platform allows clients to find all the information and all the payments in one place. It is here, for example, that any deductions will be clearly shown. This document provides a good basis for the interaction between us, the brand, and the department store or e-commerce platform.
4. Digitise your data exchanges
The relationship between department stores, platforms, and sellers is also going digital. Implementing this digital process is really useful when it comes to optimising your cash flow with these different stakeholders. Indeed, in addition to the speed of transmission via EDI, it also means that you can check to make sure that invoices have been received, and act promptly if the invoice is rejected or incomplete. This means we can reduce delays to invoice payments, but also lots of chargebacks that might not be due.
We are currently working on setting up EDI with the many department stores and e-platforms so that we can offer our clients simple, unique access, whilst also relieving them of the technical work specific to each buyer. Why not take advantage of it?
With 35 years of experience in fashion and luxury, Webhelp Payment Services can be both a personal advisor and a facilitator, not only for department stores and e-commerce platforms, but also for retail distribution. We are currently working with 400 ready-to-wear brands with a network of 35,000 stores in Europe and the United States.
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Discover the 7th edition of our OneShot magazine on Technology
Our 7th edition of the OneShot is here!
“Let’s talk about the well-being of your customers and employees. Because well-being has become a central challenge for brands.
At Webhelp, we believe digital technology must be oriented around this axis. Technology can really make life easier, to the benefit of both women and men.
As you will discover in these pages, today there is a lot of evidence of its effectiveness – and not only in the context of the «maintaining of bonds» that we are going through.
There are also new avenues that deserve to be actively explored, And this is what we are doing, with and for you, as part of numerous experiments.
What is the goal of our Technology department? To make technology an ally, entirely to benefit the well-being of your customers and employees.
An exciting project!”
Discover through this 7th edition technological innovations that humanize customer relations, facilitating the work of our advisors, and always to the benefit of final customers.
You will also find testimonies and advice from experts: Massimo Dutti, Vattenfall, Samsung…
What are the latest technological trends that are worth a look?
What are the conditions for successful technology integration?
And let’s not forget Webhelp’s vision and ambition: transparency, security, data and, of course, the human touch.
Summary
- A word – SXO
- A number – Zero
- Three opinions – Technologies that humanize the customer experience (Yan Noblot, Massimo Dutti, Vattenfall)
- Some info – How Toyota operates predictive customization ?
- A demo – Home: a place to live, a place to sell
- A B-case – How Webhelp proposed and deployed an intelligent tool… to facilitate the work of Samsung Electronics advisors
- A hashtag – #VideoChat
- An offer – Telecats, the voice of the customer as a path to action
- A meeting – the WorldSummit AI
- A conversation – A weapon of seduction to re-enchant commerce in the city
- A story – Lego : in what world are you playing?
- A perspective – For efficient and benevolent technologies
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Fashion Tech – Reshaping customer experience for your start up
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[Fashion] "Sales agents play a key role in brand development!"
Jérôme Tordjmann runs the Talk sales agency, specialising in urban fashion and streetwear, in both physical and digital environments. He answers 4 questions put to him by Aline Abeya, Sales Manager France & Benelux at Webhelp Payment Services.
The role of a sales agent is to help fashion brands, whether they are emerging or well established, to grow in a market. And in these complex times, they play the even bigger role of a facilitator. So at Webhelp Payment Services, we pay particular attention to our relationship with sales agents, to whom we offer a comprehensive range of payment services. Your agency, Talk, specialises in urban fashion and streetwear. Can you tell us a bit more about what you do?
Jérôme Tordjmann: I set up the Talk agency and have been running it since June 2019. It’s one of the subsidiaries of JV Fashion which I established in 2006. Talk specialises in urban fashion and streetwear for men and women on a B2B basis.
Our team of 7 people offers selective or comprehensive support in 3 areas:
– managing sales in France and around the world (business development, sales, after-sales), with the overall management of billing, payments and debt collection taken care of in partnership with Webhelp Payment Services
– creating temporary sales outlets: in-store corners, pop-up shops and shop-in shops (Galeries Lafayette, Printemps, Samaritaine, etc.), as well as recruiting and managing teams, training, merchandising and logistics. We also have a permanent showroom in central Paris, and we rent temporary showrooms during the fashion weeks in January and June.
– organisational consultancy: marketing, positioning, creating or adapting collections, artistic direction. We work alongside brands in all these areas, in both physical and digital environments – in the phygital world if you like. As far as the digital world is concerned, we can help brands with marketplaces like Zalando and Amazon which are becoming more and more influential from a commercial point of view.
So to sum up, we help a lot with “value creation”: sales agents play a key role in developing fashion brands!
To give you an idea of how well Talk is growing, our turnover has doubled each season.
Can you describe the kind of brands that you work with?
J.T.: They are often European brands, and exclusively involved in young, urban fashion and streetwear. We want to build and promote a really consistent world.
We work regularly with around fifteen brands, including: Daily Paper, ARTE Antwerp, Foret, The New Originals, Libertador, Mercer, Ksubi, Shaka, Rise of Human and Dechase.
Webhelp Payment Services offers sales agents a comprehensive range of payment services, from billing to debt collection, both nationally and internationally. And of course paying the agent their share after being paid by the client brand. What does your partnership look like?
J.T.: I’ve been working with Webhelp Payment Services since 2006, when it was called FDI. Talk’s clients are mainly adopting solutions like order analysis, payment plans, debt collection, credit insurance and customer scoring, both in France and internationally.
So at the moment we are not using the other services that Webhelp Payment Services offers sales agents, such as imports, logistics, paying commissions and KYC.
We are also in discussions with Webhelp Payment Services about offering some emerging brands the chance to embrace processes geared towards wholesale management. This is so that we can work together to help them grow in areas such as managing customer receivables, multi-brand stores and other strategic organisational issues.
How do you see the future of fashion brands in an era of marketplaces and online stores?
J.T.: Quite apart from the pandemic, online sales are booming. These sales compensate, sometimes to a large extent, for the decline in business for multi-brand retailers for example.
So clearly, we need to think about the development of large generalist marketplaces, like Zalando and Amazon, as well as more specialist platforms. We help brands within this environment, which is often new to them.
However, I sincerely believe that opposition to online shops is no longer a big deal. On the contrary, we are seeing the rise of a phygital approach, combining sales in physical stores with digital channels, trying to find the right balance.
The most dynamic emerging brands understand this: I can see that all the ones that we work with have an online store, which gives them a revenue stream, consolidates their financial and commercial position, and lastly, speeds up their growth.
Therefore, a phygital approach is a real opportunity for fashion brands, if they know how to manage it!
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Fashion Tech – Reshaping customer experience
Fashion has always been a playground for innovation. The acceleration of fashion tech today, responds to brands’ needs to upgrade their supply chain, rethink their digital channels and relationship with customers, while boosting their sales.
Once the preserve of luxury brands, disruptive innovation is now expanding into ready-to-wear, with customer experience as its focal point, from product design to marketing.
While millennials or Gen Z customers are looking for a new connection with labels and a sense of exclusivity. COVID-19 has highlighted the importance of reinventing the customer experience – with or without a physical outlet – and the need for brands to embrace change and innovation.
Fashion players ranging from LVMH – which has established its accelerator La Maison des start-ups at the heart of Station F – to fast-fashion players – all of them strive to develop the technologies that will differentiate themselves, internally or through partnerships with the latest tech start-ups.
New players, from D2C specialists to platforms, are also challenging incumbent brands. Not only by revolutionizing their products but also by offering new consumption patterns.
In this article, we have included several exciting fashion tech businesses to follow that support major fashion players reshaping their customer experience!
Product design – AI on the runway
What will be the ultimate fashion detail that all fashionistas will wear next year? Many designers would dream of having such a crystal ball. Paris-based start-up Heuritech is already collaborating with leading brands such as Louis Vuitton, Dior, and Adidas to help them capture early signals from fashion influencers and consumers. Using the power of AI and data to scan millions of social media images, the company provides a trend forecasting platform enabling brands to predict demand and trends more accurately, controlling their product launches and inventories.
Made-to-order: tailor-made clothes for everyone?
Fashion is known as one of the most resource-intensive industries in the world. As consumers demands change, sustainability, as well as personalization are notably becoming unavoidable trends for fashion brands. Hong Kong-headquartered start-up Unspun is ticking these two boxes. They create custom-fitted jeans using 3D scanning and robotics technology, collaborating with major industry players such as H&M. Customers can get a 3D scan of their body —using a phone app or an in-person Fit3D body scanner in Unspun facilities to generate their virtual customer avatar with 100,000 data points. Then, they select their desired fabric made from organic and recycled materials before Unspun uses their weaving technology, which reduces off-cut waste and delivers a unique pair of jeans.
Product discovery – Finding a needle in a haystack
While COVID has encouraged online shopping, consumers are often flooded with inspiration from social media, and might struggle to find their dream product among the overabundant online offering. Syte’s platform offers brands a first-of-its-kind product discovery platform; powered by visual AI (camera search), NLP (natural language processing), and hyper-personalization engines, claiming an average increase of 177% in the conversion rate of its clients. For instance, shoppers can upload their latest Instagram screenshots to find the closest matching product on the brand website.
Size recommendation engines – The end of fitting rooms?
With the increase in online shopping and ‘free shipping and returns’ offers; brands are consequently facing the need to minimize user returns while limiting overproduction and waste.
To improve the accuracy of original purchases, especially regarding fit, companies such as True Fit or ZyseMe are helping brands leverage their consumer data. They enable them to improve and personalize their customer’s shopping experience by guiding consumers to the products that best fit their needs and recommending the best size for them. Some brands have developed these capabilities in-house, such as Nike with Nike Fit, an app scanning shoppers’ foot to find their perfect pair of shoes.
AR and VR solutions – Replacing or augmenting in-store experience
Augmented and virtual reality solutions for retailers have improved tremendously over the last decade. While the first pilots looked like low-tech video games, they now enable brands to offer new experiences to their consumers. The start-up Obsess, which has collaborated with Dior, Diesel and Coach, enables a 360-degree VR reconstitution of flagship stores on their websites, and offers consumers a 3D e-commerce experience at home or in-store to visualize or compare products, thanks to AR. To revolutionize the in-store consumer experience, MemoMi has developed the Memory Mirror®, an augmented mirror enabling customers to try products virtually and get recommendations based on profile, style, and preference.
Supply chain – Tracing products origin and fighting counterfeiting
Following the global Fashion Revolution movement (#whomademyclothes), it has become increasingly important for brands to improve their transparency efforts.
Apps such as Clear Fashion provide consumers with a brand’s rating on criteria: environmental impact, working conditions, animal welfare, etc. Increasingly boosted by blockchain technology, these kinds of solutions improve the traceability of products from fiber to fabric, and empowers consumers to make more conscious and informed decisions.
Sweden-based TrusTrace provides traceability and sustainability solutions based on AI, Blockchain and IoT, to automate data collection from suppliers and help brands and customers understand the true cost of a product. Similarly, the Provenance platform uses blockchain certificates to verify where a product comes from and enables brands to highlight their sustainability efforts through stories for their consumers.
Needing to know a products’ origins also applies to the luxury industry as it is increasingly undermined (in terms of revenue and image) by counterfeiting. Start-up Entrupy, for example, uses artificial intelligence and machine learning algorithms to authenticate products, while the French company Cypheme attaches a unique tag to each product: a simple picture makes it possible to recognize this identifier with certainty and confidence.
Among supply chain innovations: protecting the planet while limiting costs for brands is Returnity. The start-up creates custom-designed reusable packaging for e-commerce (bags and boxes guaranteed for more than 40 shipments) using recycled and reusable fabrics.
New consumption models: from clothing-as-a-service to secondary markets
When it comes to new consumption patterns, it is impossible to overlook consumers’ interest in the $40 billion worldwide second-hand fashion market, and its main players Vinted or Vestiaire Collective. To enable brands to benefit from this trend and keep their customers engaged, Reflaunt offers brands an intuitive platform to connect to second-hand marketplaces. This enables shoppers to resale past purchases on the brand’s website and earn shopping credits.
Interestingly, the growth of the online clothing rental market, which could reach $1.9 billion by the end of 2023, is being watched by retailers. Start-ups such as the Berlin-based RE-NT, the American CaaStle, or the French Lizee, provide brands with white label e-commerce and logistics solutions to easily set up their clothing rental platforms.
The list of new fashion tech players obviously doesn’t stop here. This is only a small sample of what’s out there!
Webhelp created The Nest to work hand-in-hand with the startups that will shape tomorrow’s business landscape. This program dedicated to fast growing companies supports them in their customer experience development, through a dedicated approach enabling them to scale-up their CX dream team, quickly and simply.
In parallel, we collaborate with our community of startups and tech players around CX themes, through exclusive workshops, also offering them mentoring and business development opportunities throughout our partnership.
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The timeless ways fashion businesses can maximize growth
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Three top tips for de-risking your fashion brand’s B2B channel
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Why fashion businesses need to move from channel-first to customer-first
For years, consumer brands have promoted omnichannel strategies as a ‘Holy Grail’ for attracting and retaining customers. Many believe that integrating sales, communications and tech platforms is a magic wand for generating sales and improving customer lifetime value.
But with bricks-and-mortar retail suffering and direct online sales skyrocketing, those who have succeeded in managing demand effectively were not necessarily those who implemented full-scale re-platforming and omnichannel transformations but those who had a real understanding of their customers.
We have seen many brands – mainly medium-sized businesses – feel pressured into implementing or scaling e-commerce functionality as a way of pivoting around retail closures and lockdowns caused by COVID-19. There was panic and reaction – businesses scrambled to implement e-commerce strategies and manage influxes of online orders, as well as an exponential rise in customer service requests across multiple languages and time zones.
In our experience of working with over 50 global fashion brands, those who are most successful adopt a customer-first mindset. Using the same laser-focus that they use in their designs to identify exactly what their customer needs and pain points are. There’s little debate – companies which are market or customer-focused are more profitable and enjoy better sales growth, customer retention and product success. That’s according to the renowned global marketer John Narver.
By adopting a customer-first approach, brands can ensure that any digital solution will meet customer needs. Fashion businesses often have an intrinsic understanding of their consumer – and have a real opportunity to truly connect with customers, understand their needs, and get ahead on the service proposition behind any future digital offer.
We see this play out within strategic, digital-first brands such as ASOS, which traded around 35% higher year-on-year after combining an understanding of customers with a slick digital platform. In the 2021 State of Fashion report, McKinsey gives further hope, claiming that there will be another 20% annual digital growth during 2021.
What does a truly customer-first approach look like in practice?
With 3,000 professionals serving the fashion industry, we have seen that firms which marry customer understanding, data and analytics, see the best successes in maximizing brand profile, customer experience, and profits.
Most often, fashion brands come to us with the following needs in developing a customer-first approach:
1. Really get to know the customer – You wouldn’t design ranges for a customer you didn’t understand, and the same goes for designing service. Forget any assumptions you have made about your target customers, which can lead to a lack of understanding and a swathe of false and risky beliefs, which can be a fast-track way to waste money.
Data drives better decision-making, and the most advanced brands access millions of data points collected in real-time from across the whole industry – not just their businesses – to inform the next steps.
This approach also helps solve another problem we often see in fashion – where C-level directors and business owners are not close to the critical customer data and insights collected by less senior colleagues. Leveraging this data effectively will enable businesses to become far better informed and make more intuitive, proactive, and predictive decisions.
Armed with data, you can then create personas built on facts, enabling you to build better customer relationships and personalize experiences based on real insights about their preferences, behaviors, and purchases.
2. Understand the opportunities in your customer journey – In an increasingly complex sales environment, many brands need help mapping out the entire customer journey. Visualizing the current experience through the end-to-end process, from attraction to selection, retention, and upselling. This will help you identify areas that can be streamlined and opportunities for upselling and cross-selling.
3. Re-write what customer service means – Move the contact center from being a cost center to a profit center that reflects your brand values through positive customer experiences while supporting sales.
The smartest firms free up service teams to help customers to buy, not solve problems. This involves automating the maximum number of routine transactions and inquiries, enabling people to engage in personalized 1:1 conversations.
It also means listening to customers and giving them what they want. In a globalized industry like fashion, if someone wants to buy a handbag at 3 am, let them do that. Or, if they’ve purchased a jumper from a collection – show them the rest of the matching collection or items that are seen with that look to ‘shop the outfit.’
For fast-growing firms, it can be challenging to recruit high-caliber customer service professionals to support these sales experiences effectively, particularly at scale. In our experience, the most advanced fashion brands tap into existing hubs comprising multilingual, trained call handlers to quickly achieve scale and ensure the highest standards.
4. Ensure organizational and operational support – Shifting to a customer-first approach is a strategic move that needs to be supported operationally within your business. You will need to scale, transform, and ramp up rapidly and efficiently to support customer demand. You may need support in changing your organizational structure.
5. Optimize commercials – While we strongly advocate putting the customer first, there’s one caveat – it has to be commercially viable. Many firms need to balance their brand promise, meeting customers’ needs, and ensuring they make a profit.
For some, shifting to e-commerce has not been a lifeline pivot – it’s increased the cost to serve significantly. We help brands to develop a commercial strategy, which might include having to say no.
6. Create a frictionless user experience – Customers have high expectations and demand a quick, slick, frictionless experience. Nearly half of us won’t wait even three seconds for a website page to load, according to Dynatrace, which monitors IT performance. Eliminate poor websites, glitches, payment issues, and bugs within apps to minimize frustrations and retain people on-site for as long as possible to maximize spend.
7. Future-proof solutions to avoid a constant cycle of change – Without care, digital offerings can become an area where you can waste money in rapid time.
In previous roles, I’ve seen firms spend millions on IT platforms that become obsolete almost the moment they’re finished because the industry is moving so fast. Another common issue is brands that implement technology for technology’s sake.
There is never a good time for a ‘white elephant’ IT project. But now, with all the unique challenges presented by COVID-19, it’s a particularly bad time to drain your business’s time, money, and team morale.
By implementing a customer-focused technology approach, you can deliver a digitized solution that saves not only time, effort, and money – but also positions you ahead of the competition for business growth.
Thinking customer-first helps you invest in the areas where you and your customers will derive the most value. Not only will this enable you to be both more effective and efficient in delivering your customer experience, with some irony, it’s probably also the best way to give the optimum omnichannel experience in the long term.
Solutions Director – Transformation
Gobeyond Partners (part of the Webhelp Group)
Fashion Subject Matter Expert
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The timeless ways fashion businesses can maximize growth
It’s no secret that the fashion industry has endured one of the most challenging trading years in its history due to COVID-19, with shop closures and the seismic shift from bricks and mortar stores to digital selling.
In fact, the 2021 McKinsey State of Fashion report talks of a ‘Darwinian’ shakeout of firms that were weak before the pandemic, while stronger players will be emboldened.
In our experience, supporting the growth of 50 global fashion brands, we see that the strongest firms are evolving their service centers into profit-making entities, geared towards supercharging customer satisfaction while systematically driving up sales – not just solving problems.
Many of the world’s largest fashion brands recognize that customer experience isn’t their raison d’être. They understand they can benefit from external expertise to help them solve critical challenges in this area – such as spotting trends and patterns in data, shifting to new technologies, or engaging always-on, skilled, flexible, and multilingual teams which are passionate about delivering excellence for brands.
These leaders who had the foresight to see that their customer service teams were an asset in waiting are also the same leaders working with us to redeploy skilled people from solving problems to driving sales.
And so, in the middle of a strategic and fundamental business transformation, during a global pandemic, they can remain laser-focused on their core mission – creating the very best clothing collections for customers.
It could be like this for every fashion business. There is still enormous strategic and commercial opportunity to reposition customer service and experience, not as a ‘nice to have,’ but as a function that adds real value to customers and brands’ profitability.
For example, we re-engineered and digitized the customer service center of a luxury fashion client. This resulted in 50% of contacts being deflected into automatable digital channels and a 26% reduction in inquiries tracking orders. We also eliminated warranty claims, which had driven 40% of references to the center.
Operational efficiencies rarely ever hit the headlines – but at a watershed moment for the fashion industry, we believe these numbers can spell the difference between success and failure.
So, what’s new?
The pandemic super-charged online shopping, with e-commerce’s share of fashion sales almost doubling in eight months – from 16% to 29% globally, according to McKinsey’s 2021 State of Fashion report.
But with technology developing at pace, simply having the right platforms isn’t enough. The report also discusses the urgent need to give customers the best possible service and experience at a time that could still make or break scores of fashion businesses.
Three features for optimal customer service and experience:
1) Ability to deliver rapid change – Global fashion brands realized they couldn’t deliver rapid strategic change at scale – so they outsourced scalability projects to Webhelp. In return, they got immediate access to a multilingual team of 3,000 skilled and flexible colleagues who deliver a diverse range of customer services, leaving brands to focus on what they do best.
For example, when delivery problems suddenly hit Greece on Black Friday, we used our proprietary talent selection approach to help one global brand source skilled multilingual expert team members, who managed everything from an influx of customer service inquiries problems with logistics and deliveries. This agile approach created a flexible workforce that could optimize service during challenging market conditions in the lucrative run-up to Christmas.
2) Commitment to turn cost centers into profit centers – The smartest brands invest in automation technologies to help customers ‘self-serve’ problems online. For example, one fashion client recently introduced chatbots as part of a customer journey redesign and saw the average order value rise by 20% and customer engagement rocket from 2% to 30%.
This approach frees up agents to engage in personalized conversations with customers, aimed at showcasing options and increasing sales.
3) Deliver customer experiences led by multimedia, and interactive content – Digital traffic to the websites in the top 100 European brands surged by 45% in April last year compared with the previous month, according to McKinsey.
Simply providing a flat, copy-led website won’t be enough when brand leaders are using tech to push the boundaries of customer experience:
• Video – When Shanghai Fashion Week went virtual and was live-streamed last year, it drew 11 million viewers with $2.75m worth of clothing and accessories sold directly to consumers. In China, live stream revenues hit $138bn last year due to lockdown – up from $63bn the year before. Meanwhile, in the US – live stream revenues are forecast to reach $25bn by 2023.
Brands like Zara experiment with video – customers who buy via their app can create a personalized video to send with a gift from the store.
• Social media – Social media platforms – particularly Instagram – have configured their apps in a way that allows customers to buy direct from stores without leaving third-party sites. This marked a significant boost for fashion companies, which effectively gained another sales channel.
Brands should also continue to maintain strong conversations and relationships with customer communities via traditional platform activity. Again, advanced firms often trust us to deploy 800 people, speaking 20+ languages to manage this – with high rankings from NelsonHall – one of the world’s leading analysts in this area.
• Technology – We also see several fashion brands racing to offer or improve existing online sizing tools to maximize customer satisfaction and reduce the massive amount of over-ordering and returns. Consumers have also shown significant interest in scan technology – typically smartphone apps that carry out 3D-body scans and supply accurate measurements to make online clothes shopping more manageable. An obvious example is ASOS’s See My Fit tool, a big hit with its customers.
Also, augmented reality (AR) continues to advance. For example, Dior has embedded AR filters within Snapchat to enable customers to ‘try on’ sneakers, hats, and other accessories. Meanwhile, Burberry’s AR shopping tool lets customers ‘embed’ or 3D-view products within their environment.
There’s no doubt that transforming customer service from a cost to a profit center marks another significant challenge for fashion businesses. But in a cut-throat market, the bravest course of action for many fashion businesses could be to work with partners who can help them reach their potential in 2021 and beyond.
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Three top tips for de-risking your fashion brand's B2B channel
If ever any sector has demonstrated a determination to survive and thrive through adversity, it’s fashion.
COVID-19 has hit the $2.5 trillion fashion industry hard – forcing the closure of stores across the globe and hitting revenue by around 30% year-on-year in 2020.
The pandemic also triggered a rapid and urgent acceleration of e-commerce, omnichannel selling, and digitization, with omnichannel shoppers spending at least 34% more than their offline counterparts, according to The State of Fashion 2020 by McKinsey.
Meanwhile, the B2B fashion sector – including wholesalers, resellers, and e-shops – has also gained a renewed criticality: the opportunity to sell hundreds of thousands of items in bulk and keep inventory (AKA cash) moving has never been more vital.
In total, 82% of businesses fail because of poor management of cash flow. So, for all the consumer-facing tech in the world, getting paid on time by using the correct business processes and human interactions remains the best way to ensure cash flow and financial stability in the long term.
The fashion brands that will excel tend to see COVID-19 as a catalyst to manage risk – ramping up resilience planning and reviewing and adapting payment strategies ahead of new restrictions and consumer shifts.
But many executives tell us they are exhausted after an unforgiving year. They recognize that now is the time to focus on their core business – adding value and supporting competitive advantage.
Our team of 3,000 professionals speaks 25 languages and serves 50 of the world’s leading fashion brands operating in 35 countries. This includes providing outsourced credit management services for the wholesale channel from our regional hubs.
By removing these immediate pressures quickly, brands can achieve a rapid return on investment. This combination of human expertise and technology is key to success.
In our experience there are three keyways for fashion firms to balance their positioning, profitability, and cash flow managing their wholesale channel:
1) Build secure relationships using data – At a time of unprecedented risk of collapses within wholesale and retail, mid-tier firms must use data to drive robust decision-making on risk management, pricing, and payment strategy.
Many brands currently use a mix of credit insurance, external financial scoring, and access to their data to underpin strategies. But many of these methods are no longer sufficient or fit for purpose, at a time when guarantee coverage is low and trading conditions can change almost by the hour.
We manage relationships with 35,000 points of sale worldwide to collect live data from across the fashion industry, analyze the numbers, and report back anonymized data to clients every day to inform their decision-making. We collate these insights about potential risks into our screening processes, analyze client’s retail portfolios, make real-time recommendations (payment methods, payment terms, etc.) to enable everyone to make quick and robust decisions to develop safe business practice.
This enables brands to gain much better visibility and insight to protect themselves proactively from potential payment issues which may arise in the future.
There is no way to completely remove risk from any business, but prevention is better than cure, and the more insight you have about buyers, the better you can protect and adapt your business.
2) Support Global Growth – The wholesale fashion industry has shifted from 5% online to 30% online. As such, brands are managing an increasing number of sales channels, including multi-brand and department stores, resellers, and e-shops.
This rapid change is compounded by an increase in the level of complexity faced by fashion businesses when developing their buyer network across multiple regions and channels – all with different laws, rules, systems, languages, processes, and payment terms. Without care and engaging with numerous industry stakeholders, it’s easy to be caught out – for example, making mistakes on declarations, invoices, or process implementations, which your client would recharge to you.
To get this right, you either need to create your multinational multi-skilled team or tap into an existing network of professionals who understand and advise on navigating regional customs, payment methods, specific channel processes, and interdependencies within a fragmented and complex landscape of countries and clients’ specificities. Experts can also help you to implement new systems and procedures covering all new and existing trading areas.
3) Negotiate payment terms – It has perhaps never been so attractive for brands to optimize trade with wholesale buyers – selling hundreds of thousands of pieces in a single transaction.
But like D2C, the B2B fashion industry is also facing new risks.
First, there is a financial squeeze, as retailers who urgently need to add a mark-up and ensure profits urge wholesalers to seek discounts.
Then there’s an increased credit risk. Before the pandemic, the majority of fashion brands relied upon credit insurance to protect their stock and profits, knowing that insurers would indemnify them in case of clients’ payments default. But since COVID-19, insurers have dropped the level of coverage by around a third – putting much more orders at risk.
Without careful management, this combination of discounts, together with significant falls in consumer spending on apparel and reduced cover, could result in massive inventory build-ups.
Fortunately, it has been recognized that ‘one issue affects all’ – in an industry as interconnected as fashion, and stakeholders have worked collaboratively to implement a pragmatic response.
Many key resellers and wholesalers have increased payment terms from 30-60 days, which mid-tier fashion brands have widely accepted. Meanwhile, the bounce rate on payments has remained relatively steady at around 1%, despite all the challenges.
It is vital that fashion brands recognize this measured approach in any discussions with B2B buyers and negotiate terms in a way that offers a win-win on financial security for buyer and supplier.
We worked on behalf of a global US luxury fashion brand to manage relationships with 1,500 of its wholesale clients, and implement new payment systems.
As a result, the brand increased sales by over 5,000% over 12 years.
It has also ensured that the brand stays ahead of the curve with its omnichannel strategy and digital transformation.
We recommend engaging a team of professionals focused on providing end-to-end credit management services, from order to cash, to support your domestic and international markets. This includes matching your sales and finance strategies, automating financial processes whenever possible, transforming fixed costs into variable costs, negotiating payment terms, brokering the best credit insurance, and collecting receivables as quickly as possible to ensure cash flow.
This combination of people, processes, and tools will enable you to remove a significant amount of hassle, set the right levels of risk to boost a sustainable business, and secure your sales using best practices in credit management.
Looking ahead
The fashion industry went through a ‘perfect storm’ of challenges in 2020. But the hard truth is that 2021 is set to be just as tricky, with a likely global recession and the continued fallout from COVID-19.
Brands that balance their positioning, profitability, and cash flow will be best placed to realize the potential of brighter days ahead.
President & Chief Executive Officer
Webhelp Payment Services
Global Fashion Sector Lead
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Read the 6th edition of our OneShot magazine on Social Engagement
Our 6th edition of the OneShot is here!
Tick tock tick tock…
Time is ticking away – now is the time to start focusing on social engagement.
Social commitment means becoming aware, but above all, taking action and standing up for inequalities.
Taking action can be as simple as these recipes to be: more human, more green, and more equal. Not only are these good for you, but for others too.
Compelling your company to pledge and commit in the fight for social and environmental changes, such as the global warming crisis or social justices and equalities – are vital steps to take now for a brighter future.
And it all starts with knowledge. So, here’s to your learning with the latest edition of the OneShot.
Dare to be ‘woke’ and be a driving force for change?
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Recommerce on the surge: Why second-hand stores are booming
Why is recommerce on the rise? And why are marketplaces such as VINTED, thredUP or Poshmark thriving in this business model? Is it just trendy, cost effective, sustainable or a mix of all these that explains the current surge? Tomorrow’s personalization and customer journeys are expected to be even smarter, more immersive, more trust-enabling than they are today. The question is: Are brands and consumers ready? Here is an analysis from Olivier Carrot, Global Business Unit Direct, Retail & E-commerce.
So which are some of the factors that have contributed to this increase?
- Rise in the use of mobile devices. The accessibility of mobile devices globally has essentially contributed to the growth of e-commerce thanks to the increased reach which has consequently increased the sales. According to Aaron Orendorff – Forbes Top 10 B2B Content Marketer, e-commerce has helped businesses launch beyond borders reaching out to millions of new potential customers. By 2023, an increase of 276.9% in the total global sales in retail is projected with APAC taking the lead (source: shopify.com).
The easy accessibility of mobile phones and internet has definitely elevated the demand of recommerce as a service. This surge has seen many start- ups joining the bandwagon to not only meet the growing demand but also to take advantage of the efficiency and scalability that marketplaces provide.
Through the creation of an application that links second-hand products to customers, VINTED has grown from being owned by its two co-founders Milda and Justas to an organization that employs more than 450 people and unites a community of 25 million people.
- Personalized customer experiences. In reference to platforms like VINTED, personalized services that match customers preferences are highly sought after. Customers want to feel valued and there is no better way than to offer a personalized experience. Even though many consumers are in search of products being offered at discounted or affordable prices, they will not compromise on the experience. Brands are thus competing not only on price but also on offering the most memorable experience to their customers.
- Old is new again. Founded in 2009 as a swapping company for men’s shirts’ thredUP is a huge consumer marketplace that flaunts over 35,000 brands. In one of his keynotes, CEO and co-founder James Reinhart forecasts sales of upto $51 billion from the second-hand apparel market by 2023 (source yahoo.com)
In reality, people buy twice as many clothes and wear them half as long. If one can buy a branded item for half the price of the new, why not? There is a growing trend to transform consumption through reuse. And so as to keep up with the changing environment in the retail industry, integrating a resale option in traditional retail outlets is seen to boost the overall sales. Customers are sparked to spend 21% more and visit 70% more frequently. James attributes the massive increase in the visiting percentage to the fact that second hand collection is restocked every two weeks whereas in the traditional format, new collection arrives between four to six times a year (source: www.thredup.com)
- Cost friendly. Pocket friendly purchases is a big driver in the recommerce boom. Customers are increasingly seeing the value in buying recycled brand-name products for huge discounts. “Recommerce has seen a tremendous upsurge” says Steven Bethell, founder of Bank & Vogue – a firm that specializes in the logistics of selling used goods and operates a sister company called Beyond Retro. Prior to making a purchase, many shoppers aquent themselves with the resale possibilities of items they wish to buy with the plan to resell them in the near future. The retail industry is seeing a continued shift with the majority of consumers shopping smarter.
- Sustainability. The new affluent generations like the Gen Z are more environmental and social conscious and as such, they expect brands to be more ethical and sustainable in their production processes. Fashion brands that have this audience as their customer base, are obliged to revamp their business models to be able to not only attract but most definitely also retain this segment.
VINTED is one such brand. By investing on its brand ethos which is providing a platform for purchasing and selling of second-hand clothes. These clothes reduce the environmental impact of Co2 levels that are usually released in the production of new clothes (think water, chemicals, fertilizers and pesticides). In addition, it prolongs the shelf life of clothes that would otherwise head to the dumping sites in one or two years. It’s estimated that 600 kilograms of used clothes would lead to a reduction of 2250 kilograms of Co2 emissions, 3.6 billion liters of water saved, and 144 trees planted. (www.smartgreenpost.com).
At Webhelp, our clients are at the heart and our core objective is to ensure that their customers experience world class service in every touchpoint. The creation and upholding of a sustainable environment also go hand in hand with what our company stands for.
In our endeavor to always provide seamless interactions, we go the extra mile to guarantee that customers’ needs are met. We focus on making the purchase process in the marketplaces as simple and fulfilling as possible.
Our flawless and memorable customer journey from order management to returns and replacements is swiftly executed with our dedicated service specialist who are located globally in the different hubs.
And thanks to the booming second-hand industry, content management and moderation is also on high demand. Ever thought of outsourcing your content moderation? Our highly experienced offshore content moderators ensure that our clients’ brands are duly protected across their target audience. We support our clients’ to not only maintain their brand integrity, but also to shield their customers from inappropriate, aggressive or illegal content.
Are you looking for an experienced partner who will help you take your marketplace to the next level? Get in touch to receive your tailormade solution: Olivier Carrot.