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7 reasons why online fashion retailers FAIL

September 30, 2013 EC Milo Category : , , , , , , ,


Christy Ng at work
Learn from Christy Ng on how to succeed in online fashion business

Fashion & accessories comprises of about RM 130 million of the total transacted purchases as reported by Nielsen-PayPal (2011) which account to 7% of the total pie. Interestingly enough, most Malaysians prefer to purchase from local fashion or beauty stores as apposed to cross-border purchases. This number is expected to grow by close to four folds come 2014. With this numbers in mind, it is not surprising that a plethora of fashion e-stores are popping up like mushrooms after the rain.

With the boom of social media platforms and fashion marketplaces locally in Malaysia, everyone is jumping on the bandwagon selling a multitude of products; be it clothing, underwear, cosmetics, bags or shoes - we can't deny that woman's fashion products are always top of the search list!

Everyone is after a slice of this lucrative pie. Competition is steep, given the multitude of talented fashion designers and creative people in the industry. As such, the failure rate for selling fashion online is undeniably astronomical. Here in the post, I share my 7 perspectives on why fashion e-commerce businesses fail.


#1. Failure to innovate & lack of product differentiation


Innovate and differentiate yourself

Why should consumers be drawn to purchase a particular product from you when they can purchase that exact same product anywhere on the internet? Consumers today need to see some form of value in your product and service in order for you to seal the deal.

The dynamics behind online shopping is very much different from shopping in a brick and mortar store. Consumers are free to use the power of the internet to search, compare and conduct research between you and your direct competitors. If you are selling a product, ensure you take extra effort to differentiate your product from your competitors or adding extra value in terms of service or product.

Never ever copy or imitate a fellow competitors' product. Fashion enthusiast will always view you as the cheap replica copy cat alternative and imitation only flatters the other fashion brand you are copying - further reconfirming their dominance in the fashion landscape in your local marketplace.


#2. Engaging in absurd price wars


Avoid price wars

This is probably the worst move to make. In chess, bad moves like these are called "blunders". Instead of engaging in ridiculous price wars, e-tailers should spend more time trying to differentiate their products or services. Let your competitors engage in the price war which they want to be in.

Be smart, and walk away and focus on other key products which are generating the bulk of the revenue. Re-create your brand and strengthen your position by focusing on your e-stores strengths and star products. Focus on areas where your strengths lie and make a cunning but bold come back which will leave your direct competitors off guard and in state of shock!

Tell consumers why they should pay your more versus your competitor. Give consumers a good reason why they should pick you over your competitors and leave the price war to the masses while you settle comfortably into your sweet spot.


#3. Poor branding and lousy PR


No news is bad news

No news is bad news! Bait all attention at all cost! Reality being everything is judged by its appearance, and what is unseen accounts for nothing. Never let your brand or e-store get lost in the crowd. Stand out, and shine - never be buried in oblivion. Make sure your e-store appears larger, grander, with more colorful better range of products, and more fascinating compared to your competitors so much so your competitors appear blend and highly forgettable.

Lure and engage your potential buyers by creating the "envy factor" in regards to your brand. Play to the fantasies of consumers! Try recreating the fantasies of your target consumers. Life is harsh and everyone is looking for an escape - conjure our fantasies because desires are sexy deserts to the human heart: Consumers will come flocking to your store. There is great advantage into recreating the fantasies of your target consumers. Consumers can't buy from a e-store they never knew existed.

A good example here whereas Dylan Lauren, daughter of fashion mogul, Ralph Lauren had experienced great success when creating Dylan's Candy Bar in 2001 as she was successful in bringing everyone's childhood dreams to life. Inspired by seeing Willy Wonka and the Chocolate Factory when she was just five years old, she is recreating everyone's childhood dream - to be a great tasty candy store!

Aesthetically, poor photographs and lack of details are common reasons why a good product fails to leave the shelf. Always remember: Fashion e-stores are about selling style using pictures and words. How are you going to lure people into buying with poor pictures and kindergarten level descriptions? Note that photographs are also a reflection on your brand image!

Related article: 25 ways to increase your online sales


#4. Poor customer service, slow response time and poor product quality


Customer frustrated of poor service

"It takes a lifetime to build a reputation and 5 minutes to destroy it" to quote from Warren Buffet. Your e-store reputation is everything. Be sure you guard it with your life! Do not sell a product if it it of inferior quality. Selling an inferior quality fashion product is worse then selling an expensive product. Selling an expensive but good comfortable long lasting pair of heels is far better then selling a pair of heels with breaks apart two wears.

In short, its better to be known as an "expensive store" then to be known as a e-store which sells "trash". Another common mistake a lot of e-stores make is not putting in sufficient resources behind their customer service team.


#5. Stock management & cash flow


Merchandising is critical for fashion business

Fashion is fast moving and trends change faster then the wind. Failure to clear a certain SKU or design before the trend is perceived "out of fashion" is another common dilemma most fashion e-stores face.  Many fashion e-stores find it a constant struggle between balancing variety and stock movement. Identify which products move better; differentiate your fashion products between what products or designs fall under classic - "timeless", seasonal and runway.

Be ahead of the curve, do research on what items are in trend and what are not. Always collect data on what color sells best, what sizes sell more and trends in regards to your stock movement. Stock up on best selling products during peak seasons and lie low during off peak seasons to keep overheads minimal when the crunch comes. The art of knowing when to hit hard and lay low is ultimately the best way to stay on top of the game!


#6. Unappealing web store and poor user experience


Poor user experience will frustrate your customers

If you are selling female fashion products you will realize that not only man are visual creatures. People enjoy shopping on an e-store which looks great and is user friendly at the same time. If you are selling shoes or clothing for example, ensure you have your sizing guide right next to the product images on your product page. Also, ensure you state and describe your product down to the very last detail. Create a web store which will impress and you will see the results. 

Ensure your e-store supports all the necessary payment options to facilitate payment from your target audience and checking out is so easy that even the most primitive of users will be able to use it. In short, make sure every thing is "dummy proof". Never stingy on employing the right resources and getting professionals to do your artwork and communication collateral. If you are a small business or startup, it's always better to outsource your technical work or use a robust e-commerce solution which comes with professional support whole year round.


#7. Competing in the Red Ocean - Cluttered competitive marketplace


Do you want to be in a red or blue ocean?

A lot of e-commerce stores are trying to be a generalist shopper, selling a wide variety of products. They are exposing themselves into what we call a "red sea" Being a specialist merchant you specializing in niche retailing on the internet gives customers more confidence when purchasing with your store.

Also, moving to a uncontested marketplace also helps increase chances of survival and success. The far biggest mistake is a lot of fashion merchants are competing directly against the big boys and not finding their niche. Isn't it better to specialize rather then being a jack of all trades, yet a master of none?

This article is written by Christy Ng, who founded ChristyNg.com in July 2010 - which has since become a leading online women's shoe store in Malaysia.

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