At the beginning of the year, the clothing retail giant Next reported worse than expected sales figures for the 2016 holiday period. The retailer’s share price took a 14% hit and its CEO made a statement citing that people are buying less clothes now as one of the major reasons behind the slump. Now, I don’t know if people are buying less clothes, but Next’s disappointing sales sent shockwaves across the retail industry and many other clothing companies share prices wobbled as a result.

Are Next’s struggles a sign of things to come? Is retail experiencing a crisis? Are Next and traditional fashion retailers struggling to understand their customers and target markets? Or can retail have a resurgence in 2017 if it is backed up by the right technology and software?

I’d like to think so and one fantastic example of technology helping to drive successful sales strategies is Amazon’s new chain of bookshops. Amazon has taken the step of crossing the bricks and clicks divide by opening three physical bookshops in the US and the retailer is reportedly planning to expand its physical footprint to the UK. The interesting thing is that Amazon’s bookshops take sales and online review data from and its shops are stocked and laid out accordingly.

The retailer has also introduced Amazon Go. This truly disruptive retail shop concept brings an Uber-like idea to shopping with the ability for people to walk into the shop, scan an app, pick up items, leave without paying in-store for them and get billed later. How viable the concept will be and whether Amazon has the technology on hand to push the concept to scale remains to be seen, but it is a very promising idea that could really shake up the retail industry.

Other online-only brands bucking the bricks to clicks trend to open physical stores are Warby Parker, the online eyewear company; Birchbox, the online monthly sample brand; and Just Fab, the members-only footwear brand. These retailers evidently see opening shops as the next logical step in the evolution of their brands and a great way to connect with their customers. Perhaps being large online brands, they can offer internet prices in a physical store and be able to make the bulk of their revenue from their online presence?

People used to say that no one would buy clothes online, just like they used to say we would never get into a stranger’s car and get driven to where we want to go using an app. However, the online share of retail trade was 16.8% in 2016 and the most widely bought items online in 2016 were clothes. The internet clothing retailer Asos was the 5th most popular online retail outlet last year in the UK. So, it looks like people are still buying a lot of clothes online.

The advantage online brands have when moving into physical locations, is that they have built a strong competitive advantage in the minds of customers by offering things like lower prices, fast delivery and ease of payment options. If they can offer the same things in a shop where customers can feel and try on the clothes they are buying, that is even better.

What can companies like Next or M&S do in this new competitive landscape? Well, they can up their online and mobile presence and offer the best customer service they possibly can. Amazon will send you a brand new item if the old one breaks even a year after you bought it without asking a single question. I wonder how many physical UK fashion retailers will do that with the pair of jeans you bought a couple of months ago that now has a hole in the pocket.

The clothing company Patagonia offers a repair and reuse service for all its clothes. They employ people who will repair worn out clothing to extend their life. This is an example of shaking things up and making Patagonia feel like an online clothing start-up instead of a company that was founded in 1973.

In my mind, the biggest thing that these traditional high street retailers can do to turn the situation around is to really get to know their customer and their target market. And for that they need data and a data processing tool to be able to analyse trends and gaps that could help them spot something they may have missed.

They need predictive analysis of items their customers are likely to buy next, they need data on the last time someone bought a shirt plus its average lifespan so they are able suggest buying a new shirt to their customers at the right time. They need to send the right messages to their customers about the types of clothes they are most likely to buy on the device they most often use. They need to use machine learning to make their online and mobile presence even better, to only show things that are in stock and in a customer’s size and style.

All these things take some investment and resource, but most of all they take a vision to change things to be able to be competitive in a very challenging environment, and that environment is only going to get even more challenging in the next few years.

Az Ahmed

Az Ahmed


Az Ahmed is a Senior Marketing Consultant at SmartFocus.