As department stores like Saks Fifth Avenue try to bring customers back to stores after the Covid-19 pandemic shutdown, the move to online sales may accelerate further thanks to personalization technology.
Richard Lautens | Toronto Star | Getty Images
In-person shopping services, once reserved for the wealthiest consumers, are growing in popularity in the face of the pandemic as high-end retailers switch online and consumers make more retail purchases from home.
These bespoke fashion styling services are becoming accessible to the lower fashion markets through social media and other technologies. For example, employees of high-end brands like Saks Fifth Avenue, Neiman Marcus, and retailers can connect with customers through a simple text or social media platform direct message.
Brands like Nordstrom have long had proprietary personal styling services like Trunk Club and Style Links that sales reps can use to curate looks and sell them on their social media platforms. During temporary store closings, they started virtual styling appointments, which, according to the company, made up around 30% of all styling appointments in the third quarter.
Over the past year, Neiman Marcus has also accelerated the use of apps that connect customers with style advisors who can share recommendations using artificial intelligence or help with instant purchases over the phone.
“This integration with the use of social functions as part of our regular services enables our style consultants to serve many customers at once, and provides easy access to inventory and merchandise images in all Neiman Marcus Group stores and warehouses, including items that are not online.” said Elizabeth Gleason, vice president of digital sales experience at Neiman Marcus Group.
The impact of the pandemic on shopping
Personal styling is not a new innovation. The pandemic only accelerated the rollout and solidified social media as a viable platform for building customer relationships. In the past decade, mobile applications like Style Counsel have emerged, offering users shopping tips, while subscription boxes and personal styling platforms like Frank & Oak, Dia & Co. and Stitch Fix bring personalized outfit options right to your doorstep. The consumer shift online is only accelerating the need to improve personalization, whether through machine-learned recommendations, personalized emails, or targeted advertising.
Victoria Rivkin is a Saks sales rep who has moved her activities to social media. Via platforms like Facebook’s Instagram, the once time-consuming process of following a prospect through the store is reduced to a simple direct message, saving time and allowing Rivkin to juggle multiple customers at the same time.
“I don’t see in-store shopping as a thing in the future,” said Rivkin, who currently works on Saks Fifth Avenue. “It’s so much easier for people to do things online. It’s so much faster and more effective.”
Stylists like Rivkin are also seeing a surge in younger generations and millennial customers looking for personalization, whether through investing in streetwear or entry-level designer items, said Sean Chalich, a Long Island-based personal stylist.
While personal styling allows sales reps to leverage commissions and build customers from home, it’s also a win-win for retailers looking to grow sales. According to research by McKinsey & Company, personalization can increase sales by 5 to 15 percent.
Luxury brands like Kering’s Gucci, LVMH’s Louis Vuitton, and others have long used social media to target younger populations. This powerful tool is also used by influencers to engage Millennials through sponsored content and curated feeds.
Automation and machine learning make personal styling services more affordable. Using a combination of quizzes and customer feedback, retailers can, among other things, tailor the experience and better understand their customers’ preferences without forcing a one-on-one interview with a customer and a stylist.
Stitch Fix is a platform that uses a mix of automated machine learning and person-stylist interactions to curate clothing options that take into account clients’ budgets, preferences and dimensions. In the first quarter of fiscal year, the San Francisco-based personal styling service, with styling options starting at $ 30 for adults and $ 10 for children, reported active customers to reach 3.8 million, up 10.2% year over year. The company’s shares soared above $ 100 this year – they went public in 2017 with a share value of $ 20.
The company recently launched Style Shuffle, an online game that allows users to move items up and down and that helps create a personalized feed that takes into account individual consumer preferences. More than 50% of in-app users played the game on a daily basis in the first quarter of 2021, and Stitch Fix has garnered over six billion reviews since the tool was launched in 2018.
What makes personal styling services like Stitch Fix so popular is their ability to change with changing consumer patterns like the sweatpants and the athleisure trend, which can be easily adjusted as the pandemic begins. However, there are barriers to personalizing consumer shopping. According to a study by the IBM Institute for Business Value, around 60% of retailers say they are not competent enough to deliver personalized customer experiences.
Challenges for stationary retail
While many brands have begun investing in augmented and virtual reality technology for personalization that appeals to younger generations, generation gaps persist and difficult-to-use applications and buggy software keep older generations away, said Karen Lee, senior research specialist at Gartner.
Personal styling is shifting toward a long-term trend and away from the luxury market, but it’s still a niche proposition that encompasses a subset of clothing sales, warns Aaron Cheris, partner at Bain & Co. who leads the American retail practice.
“Yeah, it’s growing, yeah, some of it that we gained during the pandemic is going to stay, but I don’t want to cross the mark on how big it will be relative to the rest of the clothing sales,” Cheris said.
Personalized shopping can give both workers and retail businesses a boost, but it won’t turn the tide in the larger retail sector battles.
Over the past year, several large retailers shut down or filed for bankruptcy as statewide lockdowns and an uncertain economy forced consumers to cut their spending. Large department stores like Neiman Marcus and JC Penney have been hit by declining sales due to the pandemic, which was attributed to longer-term challenges in brick and mortar retail.
In December, popular high-end retailer Century 21, a staple of high-end discount fashion in the New York area, closed after nearly 60 years in business. Lord and Taylor, one of the oldest department stores in the country, announced in August that they would be closing all of their stores after doing business for nearly 200 years
Shopping malls have seen declining sales for decades as e-commerce business accelerates across the country. Coresight Research data suggests that about 25% of the US’s 1,000 or so malls will close over the next three to five years
But while shopping malls and brick and mortar stores have seen a decline, they’re not going away, Cheris said. Despite the pandemic, retail sales rose about 8.3% from 2019, according to the National Retail Association, and retail sales rose 3.6% year over year in November and December, representing 75% of retail sales. after a bain analysis.
“Even if they don’t sell it as a service like Stitch Fix, everyone is trying to find a way to make their marketing message and website more personally relevant,” he said.