The Revolution Online Retail Report sponsored by Ecommerce Expo: Fashion - Are clothes sites back in fashion?

his account of the soaring highs and plummeting lows that led to online
fashion retailer boo's demise.

Perhaps rather tragically, Boo.com was experiencing steady growth in
sales - $500,000 (£274,000) in its final two weeks - yet
this wasn't enough to stop it being overwhelmed by a catalogue of
errors, which included technological incompatibilities, overambitious
global expansion, over-inflated visitor expectations and a loose
approach to company spending.

In the immediate aftermath of the dotcom bust, prospects for e-commerce
were bleak, but particularly so for clothing. Yet, clothes sites appear
to be back in fashion. According to Verdict Research, the online
clothing market was worth £873 million in 2005, an increase of
24.5 per cent on the previous year. And it forecasts £2.27 billion
by 2010.

Although women are prolific online shoppers, more men are buying clothes
on the web, up from 30 per cent in 2003 to 40 per cent in 2005,
according to Verdict.

Some of the biggest factors driving growth are also driving the
e-commerce market as a whole: convenience, 24/7 shopping and high-speed
web access.

Statistics from Nielsen//NetRatings found that, in December 2003, 72.3
per cent of the UK population had connection speeds of up to 128k. Now
that figure is only 17.2 per cent, as two-thirds enjoy 512k.

Unique items

One unique driver behind the clothing market is the opportunity to buy
items that are hard to find on the high street. This might be the reason
why, in a recent survey by Verdict, eBay was the retailer most shoppers
visit to buy clothing and footwear. "EBay offers the opportunity to
capture one-off pieces of clothing from all over the world," says Harsha
Wickremasinghe, retail analyst at Verdict Research.

Azita Qadri, small business manager at eBay and former manager of the
clothing category, agrees this was initially why clothing sold well on
the auction site. Since then, the category has grown at a tremendous
rate.

"A piece of women's clothing sells every seven seconds on the UK site.
People saw there was demand and started listing items they had worn
once, as well as new clothes. Then young designers started using the
site and small businesses wanting to sell excess stock," she adds. It
hopes to boost sales with the launch of eBay Express, a new site where
small firms can sell new items at fixed prices.

Certainly, the clothing market is seeing greater investment from online
retailers as well as traditional outlets and mail-order providers. Next,
the most popular online clothing retailer, saw a 13.7 per cent rise in
sales in its Next Directory division (which includes online) in 2005,
taking total revenue to £685m. It attributed a significant
proportion of this increase to growth in online purchases. ASOS, an
online retailer targeting celebrity and fashion-conscious buyers, saw
group revenue increase by 39 per cent this year to reach £18.8m.

Meanwhile, several latecomers have launched new stores online, such as
luxury brands Marni, Louis Vuitton and Kurt Geiger. The latter has
already reported that sales from its site, which launched last October,
are double its expectations.

Social aspect

But, despite encouraging growth, Susanne Goller, director of the retail
and leisure division at research agency Ipsos-MORI, says most fashion
retailers' web services haven't worked as well as hoped. "Part of the
reason is that fashion customers, who are primarily female, like the
social aspect of shopping," she explains. "Online clothing retailers do
not give the same experience. Often, clothes are presented in a boring
way, the pictures are small, the outfits incomplete and you cannot home
in on the fabric, so you don't know what you're buying."

For this reason, many retailers that have had a web site for several
years are redesigning, rebuilding and relaunching them. The common goal
is to make their service more compelling and entice consumers to spend
more.

Revamped sites such as Adams.co.uk, have brought more stock online, so
visitors can buy items that are unavailable in their local store. "We
convinced Adams to bring about 600 different product lines online to
make it quite a large category," says Oliver Schonrock, CEO at
e-commerce agency Real TSP, which developed the Adams Kids site.

When Topshop.com (see box, p60) relaunches soon, it will feature every
clothing line, with a few concessions. "It will be representative of our
Oxford Circus flagship store," says TopShop brand director Jane
Shepherdson.

Window dressing

Clothing web sites are also becoming more sophisticated, as retailers
try to replicate the offline experience. "A whole profession has been
built around shop window dressing and that hasn't been for nothing,"
says Goller. "But, with today's technologies there's no reason why you
cannot make web sites interesting."

Sites such as Marksandspencer.com and Adams.co.uk, for example, make
greater use of photography and professional styling. "Marks & Spencer
used to feature mannequins wearing its clothes, but we've changed this
to include real people and close-up pictures of garments," says Laurent
Ezekiel, client services director at M&S' agency, Wheel, whose other
clients include Laura Ashley and Ted Baker.

Designer retailer Net-a-Porter manages its photography in-house. "Our
aim is to get the consumer as close to the product as possible,"
explains head of marketing Martin Bartle, who previously worked at boo,
thinks the concept offered by Net-a-Porter, which combines editorial
with retail, has helped it to double turnover since launch; last year it
generated £21.5m. "A high-fashion customer is looking for advice,"
he says. "If you're spending up to £800 on a handbag, you'll want
to know why it's the 'it' bag of the moment."

A more personalised shopping experience is a key trend in the sector, as
retailers try to engender loyalty among shoppers. At present,
Net-a-Porter customers can email the site and seek advice on a garment's
fit.

"The next step might be to have online stylists guide you in what to
wear, not just how to wear it," adds Bartle.

Indeed, many retailers seek to offer inspiration and advice to boost
cross-selling. Net-a-Porter and Marks & Spencer's sites offer outfit
suggestions when a visitor clicks on an item of clothing. "The next step
will be for sites to suggest products based on customer order histories
and registered preferences, such as designers or styles," says Neil
McCarthy, commercial director at e-commerce agency Tamar.

H&M has tried to overcome the problem of not being able to try clothes
on by offering a virtual 'dressing room'. Users create a model based on
their size and click on items to find out what size they need. Women's
retailer New Look has tried something similar. But, such efforts are
overshadowed by limited stock and the lack of an e-commerce engine at
both sites.

Usability issues

While new technology is enabling retailers to offer a greater
interactive experience, many are going back to basics. TopShop, for
example, is eliminating Macromedia Flash from its site as it increases
the time it takes to load pages. Accessibility is a big issue in online
retail, where the focus tends to be on design. High-street retailer
River Island was criticised this year for launching an entirely
Flash-based site that is inaccessible to disabled users (Revolution,
April, p15), and even the most popular sites still have issues with
usability (see box, p58).

When mail-order provider Boden bought its site back in-house a few years
ago, flexibility was a key requirement. "Our focus is on getting
customers to the checkout quickly and helping them find what they want,"
says marketing director Mark Binnington. Boden's online arm has grown
significantly and now generates 50 per cent of sales in the UK and 65
per cent in the US.

Such significant figures have caught the attention of many offline
retailers.

Clarks, Crew Clothing, JJB Sports and Adams Kids are a few of the
retailers to have built transactional sites. When Adams Kids conducted
an e-commerce trial last year, it found customers spent double what
they'd typically spend in-store. Director of product Jonathan Tillery
says: "In the first year we expect to take as much as one of our largest
stores."

Despite being quick to bring grocery shopping online, the big
supermarkets have been slow with clothing. Keith Chamarette, project
director at digital agency WARL Evolution, which works with Tesco's
clothing division, says: "With the grocery model, someone goes round the
store and puts the goods in a basket. But, the clothing department has
such a high turnover of stock that it isn't mapped in the same way," he
says. "We need to examine whether Tesco needs to move to a
distribution-centre model, which is how a lot of non-food items are
picked."

But, Tesco can claim a head start on its competitors, having conducted
an e-commerce pilot for some of its 'back to school' range in the
summer.

Sean Murray, head of marketing for clothing marketing at Tesco, says a
fully transactional site is likely to follow in the next 12 months.
"Over half the feedback we receive via email asks when they can buy
online," he says.

Tesco's caution highlights retailers' fears of getting it wrong
online.

"The industry is still young and there's loads of room for improvement
in areas like delivery and returns," says James Roper, chief executive
of the Interactive Media in Retail Group. But, as a lot of retailers
have demonstrated, when you get it right online, the results speak for
themselves in increased sales and customer loyalty, and it would be
foolish for any fashion retailer to ignore this channel.

SECTOR AT A GLANCE

Shopping-comparison site Kelkoo has reported an increase of more than 50
per cent in traffic to the fashion category over the last year.

According to Forrester Research, 16 per cent of European consumers
bought clothes online in 2005, equivalent to 39 million Europeans. By
2009, Forrester predicts this will rise to 73 million.

The most visited clothing sites in June 2006 were:

1. Next

2. ASOS

3. La Redoute

4. Additions Direct

5. TopShop.co.uk

6. Figleaves

7. River Island

8. M and M Direct

9. Freemans of London

10. Mothercare



SOURCE: Hitwise

USABILITY ISSUES

Revolution asked Nomensa to examine the usability of the three
most-visited clothing and accessories web sites - Next, ASOS and La
Redoute - and identify any usability issues.

It found problems with JavaScript. The sites enable users to view the
sites and look at what is available, but they would be unable to add any
items to their basket or place an order if JavaScript was
deactivated.

All three sites open new windows when viewing items and that can be
frustrating;

There were terminology issues. Using a foreign language on a co.uk site
could be confusing for some customers as they might not understand the
language.

Looking at the aesthetic, it found cluttered pages with inconsistently
placed navigation or product navigation and images that had been reduced
to fit.

SOURCE: Nomensa

TOP SHOP IS REVAMPING SITE TO INSPIRE ONLINE SHOPPERS

Visitors to TopShop's soon-to-relaunch web site will discover a new
'styleblog', inspirational features on the home page showcasing
particular items, such as 'five ways to wear white skinny jeans', and
slick-styled product photos, instead of Flash images.

More interactive elements, like the styleblog, podcast and RSS feed,
point to TopShop's aim to inspire and advise visitors.

"The idea is that you'll get a sense of TopShop as a living, breathing
brand with a voice and personality," says Tom Hostler, partner at Poke
London, which revamped it.

The extended product ranges reveal ambitions to increase sales
online.

"Web sales are significant at the moment and equate to the size of our
second-biggest store," says Jane Shepherdson, brand director at
TopShop.

"But, we see this as our single-biggest opportunity, especially as we
hope to sell online to overseas markets in the autumn. It could be
bigger than our retail arm in 10 years."