the uk fashion report · fast fashion was the largest segment by far, with 66% of all fashion...
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T H E U K FA S H I O N R E P O R TDig i ta l Cha l lenges and Tact ics ,
F rom Fast Fash ion to Luxury
2018
THE UK FASHION REPORT | 2
INTRODUCTION
2018 has started with tough retail conditions.
The industry has battled with rising rents on the high street,
declining real wages for consumers, and turbulent weather
conditions.
The list of fashion retailers announcing store closures, or worse
going into administration, continues to grow - from House of
Fraser and Next to Jacques Vert.
Another key challenge (and opportunity) for fashion brands is
the migration from offline to online, with the past year seeing
accelerated growth in online activity and sales.
In this report, we detail: • Top fashion players and risers driving online growth
• Key challenges that fashion retailers and brands face
• Recommendations and tactics to overcome these challenges
Actual Projected
600 M
500 M
400 M
300 M
200 M2016 2017 2018
THE UK FASHION INDUSTRY
Total Online Visits
Peak period surged, with visits in
November growing by 31% YoY
Visits in April-June also
increased by 20%+ YoY
PART ONE
THE PAST YEAR
ONLINE PERFORMANCE BY FASHION TIERS
PART TWO
KEY CHALLENGES
DISCOUNTING, OFFLINE AND LOYALTY
PART THREE
TOP RECOMMENDATIONS
DIGITAL TACTICS FOR RETAILERS AND BRANDS
WHAT’S INSIDE
For over twenty years, Hitwise has been a leading
online measurement and audience targeting
business.
With our unique digital insights and powerful
modelling tools, clients are able to segment, reach
and activate their prospective customers.
Sample size3 M+ online panelists
1.5 M+ mobile devices
Data depth160 M searches monthly
18 K+ audience attributes
Data frequencyHourly insights
to yearly trends
PART ONE
THE PAST YEAR
ONLINE PERFORMANCE BY FASHION TIERS
THE UK FASHION REPORT | 5
FAST FASHION ACCOUNTS FOR 66% OF ALL TRAFFIC
Each fashion tier has seen different levels of success over the past year.
The Fast Fashion Tier Fast Fashion was the largest segment by far, with 66% of
all fashion traffic in H2/H1 2018. As weather conditions
improved in April-June 2018, this tier also experienced a
significant rise of 30% YoY.
The Mid TierThe Mid Tier has seen consistent YoY growth across each
month, following a similar pattern to the previous year.
The Premium & Luxury TierThe Premium and Luxury Tier accounts saw impressive
results towards the end of 2017. Online visits grew by 32%
in the second half of the year, which included a 41% rise in
September and 31% rise in November.
MONTHLY ONLINE VISITS
MONTHLY GROWTH YoY
July 17 Sept 17 Nov 17 Jan 18 Mar 18 May 18
50%
40%
30%
20%
10%
0
July 17 Sept 17 Nov 17 Jan 18 Mar 18 May 18
400 M
300 M
200 M
100 M
0 M
Fast Fashion
Fast Fashion
Mid
Mid
Premium
Premium
Fast Fashion has risen rapidly in Spring 2018
Fast Fashion has the largest share, at 66%, of total online fashion traffic
Premium Tier drove growth in the second half of 2017
THE UK FASHION REPORT | 6
LUXURY BRANDS SOARED IN H2 2017
The second half of 2017 saw top luxury brands reach impressive online growth.
This included traditional luxury houses like Gucci and
Louis Vuitton, and etailers like Matches Fashion, Far
Fetch and Net-A-Porter.
How has Gucci grown by 131% YoY?
Bringing on a new creative director in 2015, Gucci has
transformed its brand into a hip and digitally-focused
leader.
From hoodies and fanny packs, to collaborations with
designers like Harlem tailor Dapper Dan, Gucci has
successfully lured the luxury millennial.
Online channels have also evolved. Video has become
key to Gucci’s digital marketing, with traffic from
YouTube rising by 65% in June YoY.
THE PREMIUM & LUXURY TIERFastest Risers in H2 2017
Luxury brands, particularly Gucci, saw impressive growth toward the end of 2017.
Luxury retailers like Matches Fashion also grew by double digits.
Visits to Luxury Brands
Visits to Luxury Retailers
Gucci
Supreme
Michael Kors
Chanel
Louis Vuitton
Matches Fashion
Far Fetch
Net-A-Porter
Flannels
Mr Porter 31%
45%
48%
49%
56%
71%
76%
97%
98%
131%
THE UK FASHION REPORT | 7
FAST FASHION POSTS IMPRESSIVE GROWTH IN H1 2018
After a successful 2017, Fast Fashion brands continue to grow in 2018.
In particular, teen fashion players, like Shein, Oh Polly,
Nasty Gal and PrettyLittleThing, have catapulted and
captured the summer fashion rush.
How has Shein seen an incredible 744% rise?
Operating for ten years now, Shein offers the latest
fashion trends at ultra-cheap prices. The past year has
seen an enormous push for the Chinese company to go
international, using search and social channels to do so.
Shein has seen significant growth from Google,
with clicks rising by 32% in June YoY. These clicks
predominantly came from Google Shopping and
aggressive bidding on generic product searches.
Compared to April-June last year, the etailer has
successfully attracted traffic from summer favourites like:
“cheap bikinis”, “beach kimonos” and “festival clothes”.
THE FAST FASHION TIERFastest Risers in H1 2018
Visits to Pure Online Players
Visits to High Street Brands
Not all brands with high street presence are suffering, with Select Fashion and Quiz Clothing seeing large online growth.
Select Fashion
Quiz Clothing
Peacocks
Next
George at ASDA 28%
35%
40%
66%
87%
Shein has seen impressive growth since the start of the year.
Shein
Oh Polly
Nasty Gal
Dress Lily
PrettyLittleThing 96%
155%
158%
446%
744%
THE UK FASHION REPORT | 8
But it’s not all good news for fashion brands online.
A number of global high street labels have experienced
lack-lustre results over the first six months of the year.
Top high street brands, like Urban Outfitters, Massimo
Dutti and Zara, have seen flat results in 2018.
A number of American labels have also started the year
with worrying performances. Brands like Abercrombie &
Fitch, Forever 21 and GAP have announced store closures
or plans to downsize operations in the UK.
What does the past year’s data tell us?
Certain brands and tiers, particularly fast fashion and
luxury, have accelerated in 2018. But not all fashion
retailers and brands are seeing success online.
In the next chapter, we look at why this is the case.
SELECT HIGH STREET BRANDSH1 2018 YoY
Urban Outfitters
Massimo Dutti
WhiteStuff
GAP UK
The White Company
Zara
COS
Jack Wills
Abercrombie & Fitch
Forever 21-18%
-9%
-7%
-4%
-3%
-2%
-2%
-1%
0
1%
A number of global high street brands have seen flat or even declining online results.
SOME GLOBAL HIGH STREET BRANDS STRUGGLED IN 2018
PART TWO
KEY CHALLENGES
DISCOUNTING, OFFLINE AND LOYALTY
THE UK FASHION REPORT | 10
THE DISCOUNTING DILEMMA
Promotions throughout peak period – has this become a customer expectation?
Let’s see by looking at searches for discounts,
promotions and sales over October-December.
In the beside chart, we can see that December is still
the key month for discounting. But this has grown YoY
in October and November, particularly for Mid (10% and
9%, respectively) and Premium (13% and 15%) tiers.
Expectations for Fast Fashion have also shifted, with
searches in October growing by 9%, and declining by 6%
in December.
Customers are expecting discounts and this won’t fade away in 2018. Retailers need to keep track of online
activity; monitoring searches and competitor promotions
over peak period.
SEARCHES FOR DISCOUNTS & SALESSHARE BY FASHION TIER
Fast Fashion Mid Premium
October November December
16%
12%
8%
9%* 3%
-6%
10%9%
2%
13%15%
4%
* Data labels show the % difference in share of searches YoY
December is still the top month for people seeking discounts. But searches in October & November have grown, particularly for Mid and Premium tiers.
THE UK FASHION REPORT | 11
THE RETAIL APOCALYPSE
The “retail apocalypse” – is it real or is it hype?
2018 has seen announcements of massive store closures; many claiming the “death of the high street”. Turbulent weather conditions have
been critical to this, with the Beast from the East dampening retail footfall. The largest disparity between footfall and online growth was in
March, when average temperatures dropped by 3.5° YoY.
Retailers have since played catch up, reaping the benefits of summery weather and key events like the Royal Wedding and World Cup.
Brands need to maintain this momentum into the second half of 2018.
RETAIL FOOTFALL VS. ONLINE ACTIVITYYoY Change by Month
Retail Footfall
Retail OnlineJan 18 Feb 18 Apr 18Mar 18 May 18
5.3%
-1.6%-0.5%
-3.3%
-0.4%
-6%
5.1%
7.1% 6.5% 6.1%7.5%
-0.9%
Jun 18
With the largest drop in temps, March had the biggest disparity between online and offline.
Online continues to drive growth for the retail industry.
Footfall has recovered as weather improved, but still on the decline YoY.
THE UK FASHION REPORT | 12
LOYALTY IN QUESTION
Customer loyalty – does it still exist?
Customers are shopping around and looking at different brands, as seen in the following chart. The number of people visiting all top
five sites across fashion tiers have grown, particularly for premium (rising by 128%) and luxury brands (rising by 48%).
Understand where else your customers go, particularly as we approach the critical Q4. In the next chapter, we review tactics to
overcome these key challenges.
VISITORS TO TOP FIVE FASHION SITES
TOP TEEN SITES TOP PREMIUM SITES TOP LUXURY SITES
Audience Size in Q4 2017
in visitors of all five sites
in visitors of all five sites
16%in visitors of all
five sites
128% 48%
PART THREE
TOP RECOMMENDATIONS
DIGITAL TACTICS FORRETAILERS AND BRANDS
THE UK FASHION REPORT | 14
DIFFERENTIATE DISCOUNT SEEKERS VS. STANDARD SHOPPERS
Consumers are expecting discounts earlier in the year; brands are also starting their promotions earlier.
To get ahead, brands need to differentiate their discount
shopper from their standard shopper. The following chart shows
this breakdown for Zara.
In Q4, 11% of Zara’s visitors went on to make a purchase. Out
of Zara’s purchasers, 17% had searched for a discount before
entering to Zara’s site.
Zara’s discount seekers were more likely to use Google and
YouTube. Whereas, Zara’s standard shoppers were more likely
to enter its site from Gmail, Instagram and Pinterest.
How can Zara use these insights?
To target the discount seeker, Zara could promote their sales
on YouTube. Or, they could use Instagram to feature their latest
collections to engage with their standard shopper.
ZARA – VISITORS, PURCHASERS& DISCOUNT SEEKERS
Audience Size in Q4 2017
17% of Zara’s purchasers actively searched for a discount or sale, before entering Zara’s site.
2.05 millionunique users
225,030(11% of visitors)
37,380(17% of purchasers)
VISITORS
PURCHASERS
DISCOUNTPURCHASERS
THE UK FASHION REPORT | 15
UNDERSTAND YOUR COMPETITIVENESS BY LOCATION
House of Fraser Visitor Share & Conversion Rate
London
Birmingham
Edinburgh
Cardiff
Milton Keynes
Plymouth
Doncaster
Telford
Hull
Bournemouth
1.
2
3.
4
5.
6.
7.
8.
9.
10.
10.1%
3.7%
2.2%
1.9%
1.2%
1.1%
1.1%
1.0%
0.9%
0.7%
City Visitor
1.
2
3.
4
5.
6.
7.
8.
9.
10.
8.8%
8.4%
7.8%
7.7%
7.5%
7.0%
6.1%
5.9%
5.7%
4.7%
Milton Keynes
Telford
Hull
Cardiff
London
Doncaster
Bournemouth
Edinburgh
Birmingham
Plymouth
City
House of Fraser attracts a high share of visitors from Birmingham and Edinburgh, but these cities aren’t converting as well as others.
To increase sales, the retailer could analyse the brand and product interests by city, then feed these into localised product and promotional activity.
Birmingham
Telford
Plymouth Bournmouth
London
Milton Keynes
Doncaster
Hull
Edinburgh
House of Fraser By City of Store Closure
This is paramount if you are looking to migrate your offline audiences online. Out of the cities with planned store closures, House of Fraser
attracts a higher share of online visitors from London, Birmingham and Edinburgh. But in terms of conversion (i.e. visits that lead to a purchase),
Edinburgh and Birmingham were amongst the lowest.
If House of Fraser wanted to increase conversions and sales in Birmingham and Edinburgh, the retailer could firstly identify which brands these
visitors are interested in. House of Fraser could then update their product assortment or feature these products in upcoming promotions to drive
conversions.
Conversion
THE UK FASHION REPORT | 16
UNDERSTAND WHERE ELSE YOUR CUSTOMERS GO
Shoppers are browsing and comparing across sites – so, how can brands keep their “loyalists” exclusive?
Fashion brands can do so by understanding where else
their customers go and why.
The beside chart looks at exclusive visitors of the top
five luxury brands (i.e. only visit the brand, and not the
other four sites).
In April-June, Mulberry saw the largest drop in exclusive
visitors at 14% YoY, with Chanel receiving the largest
uplift from Mulberry YoY.
Through search and channel tactics, Mulberry could then
identify why they are losing their customers to Chanel
and devise ways to win them back.
(Find out how in the Hitwise Super Customers report)
MULBERRY VS. COMPETITOR OVERLAPApril-June YoY Change
I exclusively visit ...
I visit Mulberry and...
Gucci Only
Louis Vuitton Only
Burberry Only
Chanel Only
Mulberry Only
+9%
-5%
-5%
-9%
-14%
Chanel
Louis Vuitton
Gucci
Burberry
+14%
+2%
-1%
-16%
Gucci was the only luxury brand to growin exclusive visitors
Mulberry saw the largest decline in exclusive visitors
Chanel received the biggest uplift from Mulberry visitors
SUMMARYA number of challenges are top of mind for fashion retailers
and brands in 2018. These include:
- The Discounting Dilemma: Customers are searching and
expecting discounts earlier in the year.
- The Retail Apocalypse: Although the “death of the high
street” is seemingly overhyped, the online channel has
become the key source of growth for the industry.
- Loyalty in Question: And as online grows, customers
are shopping around on multiple sites; making “exclusive”
customers are a rarity.
But certain brands like Gucci and PrettyLittleThing are
finding success online.
The key lies in understanding your customers - where
else do they go online, what are their brand and product
interests, and what proportion are searching for discounts -
and devising digital tactics to acquire and grow them.
Sources by page
Chapter 1: Hitwise. Fashion Industry = Custom list of top 150 Fast Fashion, Mid and
Premium Tier Brands and Retailers, based on average pricing on standard attire.
Page 4: Hitwise. Fashion Industry = Top 10 domains in Hitwise Apparel & Accessories
Industry (ex. Multi-category retailers, Footwear, Accessories, Kids Wear Only)
Page 10: Hitwise, Search = Searches with the term discount, sale or promotion leading
to each fashion tier. Period = 12 rolling weeks to 30-Dec-2017 YoY.
Page 11: Hitwise’s Shopping & Classifieds industry and Springboard footfall data, as
reported in the BRC.
METHODOLOGY
LEARN HOW TO GROW AND ENGAGE YOUR FASHION AUDIENCES
CONTACT US TODAY
will help you uncover hidden customer opportunities online.
FIND OUT HOW
Page 14: Hitwise. Visitors / Purchasers = people who visited or purchased on Zara’s site.
Discount Purchasers = people who searched for a discount, sale or promotion before
entering Zara’s site, and made a purchase. Period = 13 weeks to 30-Dec-2017.
Page 15: Hitwise. Visitors and Conversion Rates to House of Fraser’s site in selected
cities. Period = 4 weeks to 30-June-2018 YoY.
Page 16: Hitwise. Visitors to top five luxury sites (exclusive and shared audiences). Period
= 12 weeks to 30-June-2018 YoY.