The digital runway: How to understand the future of fashion retail

September 23, 2022 | By Matt Miller, Sr. Copywriter

Black shirts on hangers

In September 2021, fashion influencer Samantha Lauren shared an outfit from New Balance with her 53.4K Instagram followers that she said could be worn for walks and “doubles as a daytime statement.” Keyma Morgan, founder of lifestyle brand Style Weekender, posted an image for her 525K followers of another New Balance fit, calling it “elevated athleisure.”

These looks had something in common—they both came from New Balance’s the Drop collection with Amazon Fashion. The Drop allows customers to shop limited-edition collections curated by global influencers, and it’s just one of the myriad ways fashion brands are connecting with customers in this rapidly evolving industry. This particular New Balance collection was put together by Olympians Emma Coburn and Gabby Thomas.

Once reliant on glossy magazine spreads and linear TV commercials, the fashion industry underwent a seismic change in the early 2000s with the boom of online shopping. Digital advertising offered a new way to reach customers, and many brands set up their own direct-to-consumer stores for shoppers to browse products from their computer. But in the past five years, the fashion retail industry has accelerated, and customers have even more options, technologies, and tools at their disposal to shop for clothes, accessories, and more. Whether offering an influencer-curated collection, a livestreamed fashion show on Twitch, or a virtual garment try-on, brands need to be nimble, creative, and forward-thinking to deliver digitally savvy customers the shopping experience they expect.

A new generation of fashion shoppers

Like the return of the sweater-vest or the rise of Y2K nostalgia, fashion retail shifts as quickly as any style. And with continuous advancements in technology, customers have come to expect new ways to shop online for clothes and accessories.

“The ubiquity of digital retail has begun dissolving the boundaries between various web-based tools and services. In short, consumers increasingly expect commerce at the point of inspiration: When they discover a good, they expect to be able to transact immediately,” said Kim Nguyen, global head of distributed commerce at Huge, a creative growth acceleration company that recently published a detailed look at the state of today’s online fashion marketplaces. “Social media, search engines, traditional and digital publishers, streaming services, and even high-traffic wholesale retailer sites are all adopting digital retail business models, resulting in a convergence where seemingly everything is buyable everywhere.”

White shirts hanging from clothing rack

With such a fragmented landscape, Nguyen said stores like Amazon occupy an important place for brands hoping to reach consumers where and when they choose to shop. Stores like Amazon “have been building their fashion and apparel verticals for years, but are now adding more sophisticated capabilities for brands to take more control as direct sellers,” she said.

A May report from the Business of Fashion predicts that “fashion companies will ramp up their investments in technology, from between 1.6% and 1.8% of sales in 2021 to between 3% and 3.5% by 2030.” According to the report, shoppers now expect curated, personalized services that use artificial intelligence to provide experiences tailored to their tastes and needs.

“Technology can mean so many things, but the brands that are able to stay true to their brand while embracing and innovating on technology in some way are the ones that are really succeeding right now,” said Meredith Hudson, head of luxury at Amazon Ads.

A 2022 survey of consumers by Amazon Ads and Environics found that 87% of consumers worldwide want to decide where and when they interact with a brand, and 67% of consumers will pay more for brands, products, and services that are truly “authentic.”

“Over the past three to four years, there has been a significant increase in fashion mainstream digital adoption. This has manifested in terms of online buying providing more opportunity for fashion retail customers to have unique experiences with brands,” said Amy Newton, the head of fashion partnerships at Amazon Ads. “Fashion has become more accessible for everyone. It can be accessed online, through apps, through livestreaming, through the metaverse. Consumers can do closet sharing, and try before you buy. There are so many different ways to get access to what we deem as fashion versus what didn’t exist five or six years ago.”

This new generation of shoppers also cares more about the brand story and point of view.

“They care about social responsibility, social justice, corporate responsibility, sustainability—all of that is really key,” Newton said.

The Amazon Ads and Environics survey found that 62% of consumers actively seek out brands that are sustainable in their business practices, and 64% of consumers are more likely to buy an item from a brand that is willing to take a stand on social issues.

How brands can find success in this near-future fashion world

New Balance’s the Drop campaign with Amazon Ads had a total return on ad spend of $12.79 (above the athletic apparel benchmark of $6.14), and reached an audience size of nearly 900K on Fire tablet and 2.5M through display.1

“One of the reasons we enjoy working with Amazon Ads is the constant appetite and ability to innovate and test, which is a real shared value between our teams,” said Nathan Isaacson, the general manager of digital and lifestyle at New Balance. “We are always coming to each other with new ideas for how to deliver unique consumer experiences, or test product ideas, or connect consumers to athletes and ambassadors, and more.”

The Drop campaign—which reached audiences across influencer marketing, their brand Store, and display ads on Fire tablet—was a successful example of reaching audiences across a fragmented fashion landscape.

“The Drop campaign was a novel marketing opportunity,” Nguyen said. “For shoppers, what used to be ‘just a place’ to get what you need is becoming a destination for a suite of experiences. Brands can now reach consumers with recommendations and rich multimedia product detail pages that cross-sell companion items and content from your favorite celebrities and athletes.”

The success of this campaign shows how brands can innovate and experiment with new technologies to reach customers.

“Consumers expect more from brands than ever before. It’s not enough just to have a great product. As consumers have become more motivated by their personal values such as sustainability, inclusivity, human rights, and beyond, this has put a microscope on brands and business practices,” Isaacson said. “Consumers want to be associated with brands that represent them and their values, and they are voting with their wallet and their voices in a big way. For brands like New Balance that have been doing things the right, value-driven way for decades, this is a welcome change. We aren’t always the loudest, but when you get under the hood New Balance is real and authentic, and consumers can tell and want to be a part of it.”

As online shopping continues to become the norm for today’s fashion consumers, it’s important for brands to find new ways to connect with audiences.

Twitch has become an important place for brands to connect with young adult Gen Z and millennial shoppers.

“One thing about the fashion space is, [younger adult generations] don’t like things that are templatized. They like it to feel fresh, new, specific, and representative of their brand,” Newton said.

In September 2020, Burberry became the first luxury fashion brand to work with Twitch to livestream their Spring/Summer 2021 show from London Fashion Week. In May 2022, Amazon opened its first fashion store in Los Angeles, where customers can browse brands they know and love while also discovering new and emerging designers across hundreds of top brands throughout the store. Using the Amazon Shopping app, customers can send items to a fitting room, where they can use a touchscreen to browse more options, rate items, and request more sizes or styles that are delivered directly to their room within minutes.

“A lot of these fashion brands nowadays have a team just focused on innovation and tech just to figure out how to innovate within this digital world,” Hudson said. “So the brands that are comfortable jumping in and testing new things, those are going to be the brands that are most successful.”

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1 Advertiser Provided Data, 2021