Customer loyalty in fashion e-commerce
Customer loyalty in fashion e-commerce
Fashion is one of the most exponentially growing sectors of e-commerce, both in North America and in Europe. However, this market is as lucrative as it is difficult. Fashion e-commerce suffers from high cart abandonment and equally high return rates. Therefore, increasing customer loyalty is of paramount importance in this sector. What can you do about that?
In March 2021, Zalando, one of the biggest fashion marketplaces worldwide, announced that they expect to grow GMV (gross merchandise value) by 27-32% to 13.6-14.1 billion EUR in 2021 [Zalando]. Without a doubt, fashion is on the rise, and this trend is clearly visible all over the world. For instance, the E-commerce in Europe 2020 report [Postnord] provides us with comprehensive data concerning the popularity of fashion and apparel products across the old continent:
In all of the nine examined markets, “clothing and footwear” is the no. 1 category. In Germany alone, a whopping 40 million customers buy fashion items online! A similar situation is in the United States, where “apparel and accessories” is the second most popular category (only surpassed by consumer electronics), with over 20% of total e-commerce sales and almost 38% of total retail sales [E-marketer].
Does it all mean that fashion is the e-commerce promised land, and you should open an online fashion store as quickly as possible? Well, the answer is quite complex. First off, you should discover some of the major problems that torment this product sector.
Fashion e-commerce: Troublesome, to say the least
In short, we could say that fashion products generate two crucial problems:
- High cart abandonment rate
- High returns rate
Of course, your problems don’t end here. For instance, every returned product has to be washed and ironed before it can be sold again, which means additional work and time. But in this article, we are going to focus strictly on the two problems mentioned above.
According to Nosto, clothing and apparel accounted for over 20% of all products returned in the US in 2020. And in 2018, Statista conducted an interesting survey, asking people what gifts they return after the holidays. Here are the answers:
As you can see, clothes are products that are the most likely to be returned when they are purchased as a gift. There are many reasons for that. First of all, it’s challenging to match another person’s fashion sense. Secondly, products that look attractive on the website don’t have to be so appealing in real life. Here, brick-and-mortar stores have a clear edge because customers can try on a specific piece of clothing before buying it.
And what about cart abandonments? You have to be aware that clothing has one of the highest abandonment rates, with around 40% of clothing in shopping carts being abandoned. Take a look at this infographic below:
Now, what can you do about these two problems? In general, you should focus on providing users with everything they need to get acquainted with the product as thoroughly as possible and building customer loyalty. Moreover, it is important to focus not just on loyalty but e-loyalty (it extends the traditional concept of loyalty and includes also quality customer support, on-time delivery, comprehensive product information, reasonable shipping and handling prices, clear and trustworthy online privacy policies).
Competition online is severe, for example, Inditex, Spanish fashion retail, plans to invest 1B euro in digital and to close 1 200 brick-and-mortar stores. That's why according to Divante, taking care of customers' online loyalty should be a priority for fashion brands in the next few years.
Let’s talk a bit more about that.
Customer loyalty in the fashion world
In 2018, SalesForce published a “Trends in Customer Trust” report. A whopping 95% of surveyed customers said that they are loyal to brands they trust. Obviously, you can’t build loyalty overnight. You have to gain trust first, and that takes time, but believe us, it’s worth it! The same report states that customers who trust your company are more likely to:
- Recommend it to others
- Buy more products
- And spend more money
How can you build loyalty in the fashion industry? There are a few proven ways, but your starting point is always the same: Provide the best service imaginable. 89% of businesses see customer experience as a key factor in driving customer loyalty and retention[Access Development]. Now, let’s be more specific. We will show you three ways that will help you build customer loyalty and encourage your users to place more orders and spend more money:
LOYALTY PROGRAMS
The key to building a successful loyalty program lies in making it attractive from the customer standpoint. Make sure you offer appealing incentives that will encourage customers to place more orders at your store. For instance, if collecting points is difficult and takes a lot of time, don’t expect a huge success.
There is one more condition you should be aware of: Loyalty programs work best with mobile apps. Why? Primarily because mobile apps are convenient. Thanks to them, reward programs are now easy to use, fully customizable, and accessible. Users don’t have to remember about carrying loyalty cards with them or calculating loyalty points. As a result, mobile loyalty programs offer improved user experience (UX), and customers simply want to participate in them.
Nike Membership
Nike Membership is a loyalty program created by this sports clothing producer. Nike offers member-exclusive products, Nike By You customization, and special offers. Their program also comprises fitness apps, Nike Training Club, Nike Run Club, and their libraries of over 100+ workouts.
All Nike Members receive special offers and product promotions throughout the year. Interestingly, Nike Member Rewards program is not based on collecting points. Members get rewards just for being with the brand.
Image source: Nikeplus membership benefits
We have to say, Nike has done a great job with their loyalty program. Building loyalty is all about staying in touch. That’s the most valuable lesson you can draw from their program. Focus on providing users with the support they need and want, not on your potential profits. Every successful loyalty program puts the customer in the very center.
WEB PUSH NOTIFICATIONS
Web push notifications make a case for themselves when it comes to reminding customers about your offer. You see, if you want to keep customers loyal to you, you have to remain in constant contact with them. Today, the e-commerce world offers so many options, stores, and brands that even the most loyal customers can simply forget about your offer or latest promotion. With push notifications, you help them remember that they like your brand and, more importantly, why.
Push notifications work particularly well when dealing with customers who need to think more about their purchase or hesitate to place an order. In the fashion sector, this group can be quite significant! With push notifications, you can:
- Remind users who started the purchasing process about it (and save abandoned carts in effect)
- Show products similar to those someone was interested in
- Send targeted campaigns to your current customers
- Send notifications about promotions to selected subscribers, e.g., using upselling and cross-selling
Push notifications are frequently all about retargeting. Recently, the FinancesOnline.com website published a report which shows three crucial reasons why customers click retargeted ads. Take a look:
As you can see, an abandoned cart doesn’t mean that the given customer is no longer interested in purchasing your product! Almost 40% of them are still drawn to the product, which means that they need just an additional boost. And push notifications work perfectly as such a boost! Take a look at this example:
Take a look at how this strategy can work in the fashion e-commerce store:
This strategy proves to be quite effective! We’ve made a list of potential automatic scenarios that can be used in this industry, along with average CTRs (click-through rates) we usually manage to achieve at PushPushGo:
| E-commerce on average | 7,59% | |
| Last seen offer | Last seen offers are all about encouraging customers to return to the site, check the product the user was interested in once again, and place an order. It’s also a good moment to offer some incentive, e.g., a small discount or free shipping. | 12,30% |
| Abandoned Cart | As you already know, abandoned carts are prevalent in the fashion sector. Reminding users that they were interested in a particular product can be an effective way to close the deal. Many users need to think more about the purchase or were distracted by something during the process. Why wouldn’t you remind them about their carts? | 9,71% |
| Thank you for your shopping | Loyalty is all about building relations with the second party. If you simply thank your customers for picking your store, you will positively connect the user to your brand. The thank-you message is also a good way to offer a promo code and encourage users to visit your store again, thus building loyalty even more. Moreover, you can send personalized discount codes based on the cost of the made purchase. | 9,10% |
| Promote your special offer | This application of push notifications works very well when a subscriber enters your website. Show them your best deals! This way, you will foster your customer’s interest and desire to buy. Another option is to send unique promo codes for every subscriber that visits your site and encourage them to place an order. | 5,77% |
| Follow us on Social Media | When it comes to building loyalty, there’s no place like social media. Fashion brands and stores use Facebook and Instagram to show their bestsellers, new arrivals, and special offers. If your customers follow you in these channels, you have the opportunity to build long-lasting relationships with them. You can use push notifications to invite users to follow you on Instagram or any other social media platform. | 5,44% |
| Welcome message | Here, it works similarly to the thank-you section. If you want to build a long-lasting relationship with your customer, make them feel welcome in your store! Combined with personalization and maybe even promo codes (“here’s a special code for your first order”), this technique can help you retain many regular customers. | 5,50% |
| Return visits | That’s exactly what we meant when we told you that you have to remind yourself to your customers. The reason is trivial - they can simply forget about you! If a user doesn’t return to your store for a long time (it’s up to you to decide what that “long time” should be), you can use push notifications to encourage them to visit your store again. It’s also a good moment to inform them about new sales or arrivals. | 5,19% |
As you can see, this strategy is particularly effective when it comes to promoting last seen offers and rescuing abandoned carts. Both these situations will help you get customer attention and encourage them to place an order.
You can also use push notifications to create exclusive special offers or web push loyalty programs for subscribers who agreed to receive your notifications. As a result, your web push subscribers will feel more exceptional and will be looking forward to your next campaign. Granted, there are many possible ways to use push notifications. If you want to discover them all, drop us a line today!
PERSONALIZATION AND SEGMENTATION
Both these strategies are extremely important in the fashion world. Although both of them have a lot in common, there are some differences you should be aware of:
Segmentation
This technique is based on dividing (segmenting) customers into different groups based on their interests or characteristics. This way, you can show them more tailored ads and offers and showcase products they might be interested in. With segmentation, you can devise better marketing messages, select appropriate marketing channels, and even different ways of argumentation.
E-commerce companies typically use CRM solutions like Salesforce or HubSpot to implement segmentation, but if you have less than 1,000 customers, it can even be done manually.
Personalization
In segmentation, you speak to a whole group of customers. In personalization–to just one person. You can use different channels, including your store’s website and email marketing, to make the most of personalization.
When it comes to personalization, you can also use web push notifications. Once users subscribe to them, we can track their behavior on the website and assign them to appropriate segments, for example, based on categories or products they were interested in. And as a result, we can send personalized web push campaigns with offers users cannot resist.
Think about implementing an intelligent product recommendation system that uses AI-powered algorithms to improve efficiency. For example, Dynamic Yield and Morphl provide such capabilities. Recommendation systems analyze each of your customers' interests, behaviors, and past purchases and use this data to provide them with personalized recommendations. This approach is highly effective, and almost every large e-commerce company uses it to increase the AOV index or to retain more customers.
Final thoughts
Customer loyalty is a beast difficult to tame, especially in the fashion e-commerce world. With thousands of offers and products, it’s easy to lose customer attention or interest. That’s why your main focus should be to provide them with top-notch customer service and experience. Make sure your loyalty program (and any other marketing-related activities) is focused on your customers’ needs and problems. Offer them valuable support and maintain constant contact (but don’t be too pushy, no one likes aggressive salespeople!)–that’s your recipe for success in this difficult market.
And if you want to find out more about push notifications and discover how they can help you build engagement and save carts – the PushPushGo Team is at your service!
