Sometimes it feels like the fashion industry hasn’t changed in years. Designers still arrange glamorous shows for their new collection and retailers rush to be the fastest to copy general trends in the market. On the surface, this is all true, but there are several important changes taking place across the entire industry – for example, who would have thought that renting your clothes would be a serious proposition? Smart fashion retailers are shaking up the market by offering personalization that just was not possible until recent advances in data analytics.
TechStyle is a good example. They have moved away from the idea of a retailer as just a store, or just a place where brands can hang racks of clothes and hope for customers to see what is on offer. They run their business as a member-only club. It feels exclusive, as if you are getting special advice just by becoming a member.
Although TechStyle runs their business as a club, it is far from exclusive. Over 5 million people are now members across 12 countries and they have over 17 million fans on Facebook. A really interesting fact is that over 3 million of their members were directly referred to the brand by their friends. The average member visits the TechStyle store at least 25 times a year. How does that compare to your own personal visits to other fashion retailers?
What TechStyle has identified is that fashion customers today have very different expectations compared to how customers used to engage with brands. Customers today are more concerned about how and where their clothes are manufactured and they want style, but with convenience too. The fast-fashion retailers that change what is available on a weekly basis are starting to find that customers are tiring of the expectation that they will browse stores without knowing for certain if there will be any products they want to buy.
TechStyle uses data analytics to bypass this problem. The customer becomes a member of the club and they indicate the clothes they like. As the customer browses and purchases more items, it learns about the preferences of this individual customer. Ideas and suggestions can be sent to the customer based on this insight and deals can be created that are targeted at an individual person.
TechStyle has also deployed a chat system that uses Artificial Intelligence to ensure that customers can ask for help 24/7. The chatbots can answer most basic questions, such as ‘where is my order?’ and will automatically hand over to a human customer service agent if the automated system does not understand the customer.
What TechStyle is doing could pose a serious threat to the business model of many fast-fashion retailers. They are removing the randomness of browsing the store and just hoping there is something interesting on sale today. They are using data to create a highly personalized experience and they are valuing the most important commodity every customer has – their time. The personalized approach along with technology – such as the chatbots – all create an environment where the customer can dip in and out of the store quickly and always find what interests them immediately.
I believe that as more retailers focus on creating a personalized experience for their customers we will find it increasingly strange to interact with a retailer that expects you to accept the same recommendations and deals they are offering to every other customer. TechStyle is transforming fashion retail by showing that customer insight can be turned into transactions and loyalty.
Fashion works far better when the retailer knows their customer well, but I do expect this approach to become far more common in other areas of retail. The more the brand knows about their customer, the more they can predict what the customer wants and what they might do. Expect more retailers to follow the TechStyle model soon.
Photo by Alex Craig licensed under Creative Commons