Shifting Channels in Luxury and Fashion

July 2023

After a dramatic rise during the pandemic, global growth in e-commerce sales in fashion has slowed with the easing of restrictions. As consumers become more discerning in their fashion spending in the context of high inflation and the climate emergency, building an omnichannel presence incorporating sustainability should be at the heart of industry players’ strategies, to deliver the convenience of e-commerce, but also the distinctive experiences that only the physical world can offer.

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This report comes in PPT.

Key findings

Back from the boom

After a dramatic rise due to the COVID-19 lockdowns, the growth of e-commerce sales in fashion has been slowing down globally since the gradual easing of restrictions around the world, and consumers have returned to physical stores.

Seeking in-store experience

While consumers still expect the convenience of e-commerce, they also seek the personal service and distinctive experiences that only physical stores are able to deliver. In this context, building an omnichannel presence has become paramount for fashion brands and retailers, even among digitally native direct-to-consumer (DTC) brands.

Leveraging tech for greater personalisation

Consumers favour brands that they feel listen to them, understand them and pay attention to their specific wants and needs. Savvy brands need to use digitally enhanced retail, digital tech and AI to create relevancy, foster loyalty and ultimately boost their bottom line.

Sustainability: An underlying force shaping retail

As the pressure grows from both consumers and regulators to make the fashion industry more circular, retailers and brands need to adapt their distribution and retail strategies by encouraging repairing, promoting recycling, and facilitating resale and rental.

Key takeaways
Exploring shifting channels in luxury and fashion
Since COVID-19 restrictions were lifted, e-commerce growth has stabilised
Shoppers have missed physical stores and become more discerning in their fashion spend
Retailers need to appeal to and retain consumers facing persistent global inflation
Changing sustainability regulations put retailers under increasing pressure
Changing consumer lifestyles and values drive the evolution of luxury and fashion retail
Due to persistent inflation, consumers are expected to curtail their discretionary spending
Consumers value products and services that help get on with their new hybrid routines
Consumers increasingly favour businesses that offer a hassle-free experience
Primark expands its Click & Collect service to over 50 stores in the UK
Dollar shop marketplace Temu is thriving in inflation-weary US market
Google shopping appeals to budgeteers with new search functionality
There are still some experiences that only physical stores seem able to provide…
Skims is opening permanent physical stores across the US
Lee opens first physical flagship filled with tech from endless aisle to smart mirrors, in India
Engage with the local community: Kolon brings natural lifestyles into the concept store
Bulgari partners with Integra Fragrances as part of its immersive experience by Refik Anadol
Footwear player Renner meets customers via “travelling” pop-up store across Brazilian coast
Consumers are now looking for solutions that enhance their digital wellness
To bridge the gap between on and offline, brands invest in gaming and personalization
Gucci Town targets younger generations with immersive gaming features
Hugo Boss invests in greater personalisation with a new AI Digital Campus in Portugal
Ferragamo taps into the thrill of solving a mystery to unveil new collection
Lacoste adds gaming features to its Web 3.0 UNDW3 NFT collection
COVID-19 and high inflation lead consumers to seek alternative ways of accessing products
The growing pressure for more sustainable business models in fashion impacts on retail
Censuum pioneers the concept of department store for responsible DTC brands in Denmark
Zara charges for returns for online purchases and launches in-store clothes collection scheme
From Censosud Paris to Primark Worn Well, retailers explore multi-brand resale corners
Chloé launches digital IDs to enable instant resale with Vestiaire Collective
E-commerce and offline retail to complement each other in apparel and footwear
Consumers demand the best of both worlds
Winning strategies in today’s fashion retail environment

Luxury Goods

This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.

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