Having your brand present on the high street does not mean that the consumer will see it, understand it, like it and buy it. "Some 74% of brands are irrelevant to consumers, nothing would happen if they were to disappear," warns Luis Lara, senior advisor at KPMG, during the fourth edition of the Barcelona Fashion Summit, the main congress for the fashion business in Spain, organised as part of 080 Barcelona Fashion.
The fashion sector in Spain has both history and legitimacy. Amancio Ortega, the father of Zara, is the second richest man in the world; Inditex is the leading operator in the world; Spain is the fourth country in Europe as far as fashion exports go... However, Zara's example of success is not a universal remedy for all brands, work needs to be done on the eight drivers of value, in a saturated sector in which the consumer is the boss.
An oversaturated and technological market
According to Lara "we have to remember that in the Dubai Mall there are 1,200 fashion boutiques, an example of how saturated the market is." Another thing to bear in mind is technology. Spain is the country with the highest penetration of smartphones in Europe, and is even above the world average. "We spend 13 hours of the working day looking at email, we are glued to our mobiles, to which we have to add the fact that the world moves quickly and we want an immediate response," says Lara.
Sales
Another aspect to keep in mind is that promotions are increasingly more important. Technology and the crisis have brought prices into focus. Some 60% of customers say that they wait for the sales period, tax-free days and other discounts before they shop. In other words, "the customer is prepared to wait for those special moments."
A unique experience
Omnichannel retailing, the trendy term during the Barcelona Fashion Summit last year, is vital for survival. "Some 70% of customers use different channels (offline and online) before making a decision on whether to buy, and they demand a unique brand experience, the omnichannel," says the KPMG executive.
The supply chain
There used to be two annual shopping campaigns, these days there are 52 weeks and 52 campaigns. "The customer tires first, new products have to be continuously launched".
The High Touch
More technology, more personal contact. According to Lara, "brands that look after the staff who have contact with the customer, in other words, in the shops, will triumph." Employees that deal with the end consumer have to be attracted, trained and promoted. "The consumer is in charge; more than managing reality, we manage perception".
Luis Lara, senior advisor at KPMG, during the fourth edition of the Barcelona Fashion Summit.
Bearing in mind the characteristics of this sector, what are the eight drivers of value that customers of fashion appreciate most?
1- The hottest
Are we capable of competing in fashion? Are we on the shopping route?
2- The cheapest
Competing with price is an objective factor. Are we the cheapest at certain moments of the year, in categories, in general?
3- The biggest
Competing with offers. There are customers who shop in a certain place because it has everything. This is the key thing about large department stores: a thousand brands under the same roof.
4- The newest
Competing by launching new products. It is one of the main things that makes people come back to our shops or websites on a weekly basis.
5- The easiest
Businesses that compete in service; which cannot compete on price because their business model does not allow it, or because they do not have more new products to offer every week, but provide an exceptional service, whether offline or online. In other words, protocols of customer attention, supervision... "In the future it will not be acceptable to have a shop assistant that does not provide a good service," says Lara.
6- The quickest
The world moves at a fast pace and we want everything now. According to Lara, "there are customers who, when they are buying online, get stuck when paying at the check-out because they are not well-organised."
7- Cx-est
The experiences in the shop have to include all the senses.
8- Omni-est
Being a business that is genuinely integrated into omnichannel retailing and providing a unique brand experience.
According to Lara, all of these drivers are interesting because the customer picks brands depending on these parameters. The key for survival and growth depends on the brand getting a 9 or 10 in some of these points. "The way that the customer votes is by buying", he concludes.
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