Fashion retailers were hit hard by the COVID-19 outbreak, but the industry may have found a silver lining: an influx of new e-Commerce customers. According to aggregate data from ActionIQ, which has fashion clients including American Eagle, Gap and Rag & Bone, daily e-Commerce revenue at apparel retailers rose 22% in April and May compared to the final weeks of March — and the biggest influx came from new customers, whose presence grew 73%.
“When you look at the groups of people currently making purchases online, a very large share are new customers,” said Tamara Gruzbarg, Head of Strategic Solutions at ActionIQ. “It was a little surprising at first, then I realized it was an opportunity for very targeted and attractive acquisitions. The media space became much less competitive because industries like travel and hospitality pretty much went dark, and retailers also had a lot of merchandise at attractive prices.”
In comparison, revenue from existing e-Commerce-only shoppers was down 15%; revenue from omnichannel customers was flat; and revenue from previous in-store only customers grew 45% as they explored online shopping. This data frames the fashion industry’s recovery roadmap: work to retain new customers, and keep the former single-channel customers shopping online.
However, retailers will have their work cut out for them. Some of these new shoppers came for the discounts and free shipping many retailers offered during the pandemic, but they may not return once operations settle back to normal. However, those that continue engaging with the brand and make additional purchases can become the next generation of loyal customers.
Strong Engagement Retains Old Customers While Attracting New Ones
Retailers shouldn’t ignore their existing shoppers during this process, even if some haven’t been making the same volume of purchases. The same outreach that builds loyalty with newcomers can also maintain engagement with existing e-Commerce shoppers who have temporarily reduced their purchases or aren’t comfortable shopping under the current circumstances.
“Those customers didn’t go anywhere,” said Gruzbarg. “Our clients are attracting new customers, but also making sure they keep older customer engaged. They realize that the biggest asset is their customer base, because this is the driver of their success. Some of our omnichannel clients are focusing on strategies to reach out to those who didn’t make the shift online.”
A strong engagement strategy also can turn those former brick-and-mortar-only customers into omnichannel shoppers. Replicating in-store associate interactions through offerings such as online appointments can keep customers who miss the physical shopping experience engaged, while simultaneously showing a retailer’s new customers the level of service they can expect from their new shopping destination.
Retailers also should be aware of how various demographics are engaging with them online. For instance, older shoppers are watching more beauty tutorials, and their expectations may differ from tutorials’ traditional audience of younger customers. Retailers need to rethink the user experience to make sure this valuable messaging applies to all potential customers, regardless of age.
“It’s about education and engagement,” said Gruzbarg. “My 17-year-old daughter is so much more proficient in makeup and everything that has to do with skincare, just because she grew up when that was ubiquitous — it’s second nature. For me it will not be as easy, so making it a little more educational, showing how and where and when to use these tools, can help engage with my demographic.”
Retailers Should Remain Themselves, Even As The World Changes
Both the retention of existing shoppers and the cultivation of new customers start from the same source: a strong, consistent voice. The pandemic has changed the way people shop, and Gruzbarg expects some of these new habits to become permanent, but launching curbside pickup or online appointments doesn’t make retailers a different company from when this started.
“We have a client with a very outgoing, cheerful and distinctive personality and voice, and when the crisis started, they were struggling with the right message and tone for some of their creatives and messaging, and they did not get the engagement they were looking for,” said Gruzbarg. “They asked customers to fill out a survey, and got an overwhelming response saying, ‘Stay true to who you are, I subscribe to your emails because they’re a dose of sunshine and cheerfulness.’ I wouldn’t base it on income brackets or age groups — listen to your consumers and give them what they want.”
A retailers’ voice is entirely its own, and how they express it will differ from company to company. Some of ActionIQ’s clients have used email marketing as an avenue for storytelling, while others have connected to their customers with virtual happy hours. The key is to understand your customer base, both new and existing, and appeal to them in ways that align with your overall message.