One of the biggest challenges for any fashion company is remaining relevant to the core audience. This is especially acute for those brands selling to a younger customer. A brand that appeals to an early teen is unlikely to appeal to an older teen when they then break out of this period then there is no way they would be seen dead in that brand’s goods.
Managing this transition is tough and requires constantly attracting a new audience as the older grouping drops out the other side. This is something that many brands have found difficult to handle including the likes of Hollister, Abercrombie & Fitch and Jack Wills that are among a batch of retailers to have seen a fall-off in business as they have failed to renew and refresh their customer base. They have stereotyped and their customers have simply grown out of the brand.
Part of the problem has been that they predominantly sold through physical stores in shopping centres and as the younger customer group has collectively moved online these brands got left behind. It is a similar scenario with Topshop that lost ground to the online players like Asos and Boohoo, which attracted the new younger shopper who was increasingly spending online and being influenced by social media.
For the younger market online wins out over the store because they have availability of stock for immediate consumption.
Simply being online will clearly not determine a secure future where retailers and brands can easily, and continuously, attract new young customers. They face ongoing threats from new players entering their space. This phenomenon has been recognised by Boohoo, which has used acquisitions to keep things fresh and retain its relevancy. Nasty Gal and Pretty Little Thing were brought into the fold and have been successfully integrated.
Boohoo also recently added Karen Millen to its portfolio, which initially looked rather odd but it is a clever move by the company to retain customers as they grow older. Rather than lose them when they reach post-Boohoo age the Karen Millen brand appeals to an older demographic and therefore enables Boohoo to boost the lifetime value of its customers.
As it becomes more costly to acquire new customers then the need for retailers to increase lifetime values will be ever more important. When combining this with a focus on retaining relevancy to a core audience then retailers and brands have a chance of defending their patch from newcomers and achieving long-term success.
Glynn Davis, editor, Retail Insider
K3 Retail partners with businesses to provide connected technologies based on Microsoft Dynamics 365 so retailers can reach their goals now and in the future. In a size that best fits future plans wherever you need it – Cloud, Hybrid or On-premise. Our solutions drive more than 800 international retail brands from Charles Tyrwhitt and The White Company to Ryman and Sue Ryder, Hobbycraft, Wasabi and Ted Baker, K3 Retail is a Microsoft Gold Certified Partner and the UK’s leading Microsoft Dynamics retail partner.