It is no secret that South Africa is one of many countries currently experiencing a difficult economic climate. The retail industry is taking a lot of strain as consumers are spending less. Although, online shopping has not only transformed the way we shop it has also added a huge benefit in the form of convenience.
I have given the inter-dependable consumer-retailer relationship some thought. I’ve used my own personal journey as a consumer for a frame of reference and have tried to extend this reference to peers and people within my circle and what I observe from their buying patterns as consumers.
Me the consumer
I opened my first store account (much to the dismay of my older self) already when I was a student. The ‘luxury’ of this was a saving grace in many ways but also a curse….one card generally leads to another and another ……..Before I knew it I had a magnificent wardrobe full of clothes and a pair of shoes for literally EVERY occasion complete with a huge amount of debt. At times I could even hear myself sitting in an AA meeting saying: “Hi, I am Bernice and I am a shopaholic”. The problem is that whenever you go to the shops to pay your account you end up buying something new. My younger self struggled for years to NOT shop on account and to pay off these damn accounts. Boy…was it difficult.
Thankfully as you get older and wiser you learn not to buy on impulse and that cash buying is king. The conundrum comes in that once you have paid off all your accounts, keeping in mind that you are so used to paying money towards these accounts, it takes the ultimate restraint to NOT buy on account again. Account buying is so easy and forces you to not only make X amount available in your budget for settling the monthly account/s, but simultaneously encourages you to keep up appearances.
As an on-account-buyer, once you’ve finally paid off your accounts, you think twice before buying anything, especially when you need to force yourself to buy it cash and even more so in difficult economic times. Buying on account is much more affordable because of the small increments. Remove the small increments and you just stop buying. Zero Sum Game for both the consumer and the retailer.
You the retailer
I know some people in my network who have been in the retail industry for years and whose livelihood depends on it. Times have been tough. The retail industry is finding itself having to become more innovative and creative to stay alive and competitive in the war for mind share and revenue. The retail industry has many challenges ranging from investing in mountains of stock (at the risk of not selling them) to paying astronomical amounts for rent when a consumer can simply browse the stock in-store and ultimately order it online; and consumers who once bought on account and have now stopped buying.
I have pondered this over the past couple of weeks. I am a middle-aged woman who likes to look and feel on-point. I find myself living in an Instagram world, where shopping online is certainly much easier and more convenient than having to go to a mall, try on a 1000x things and walk out the mall several hours later.
A typical clothing journey in the 21st century looks like this: once you end up buying an item you may wear it once maybe twice, take a couple of pics/selfies, post it to social media, then it gets buried in a cupboard never to be taken out again, because you would not be seen dead in the same dress and by the third opportunity to wear it you are already bored with it etc. That concludes the lifespan of the item. We have become an on-demand society obsessed with image.
Opportunities for both consumer and retailer
I believe there are many opportunities for retailers to use the current social community trends to their advantage. I have gained some experience in the Software-as-a-Service (SaaS) industry. This business model pretty much works on the principle that clients pay a monthly or quarterly fee to use software solutions for their business. The client owns their data but never owns the software. This SaaS business model can without a doubt be applied to the retail industry.
The online retail industry has seen the rise of some innovative payment gateways such as PayFlex. PayFlex allows online consumers to buy what you need now and pay the merchant in 4 interest-free installments. Great concept. For retailers needing a cash boost/advance to enhance or grow their business, Merchant Capital offers innovative short-term funding solutions on a “pay-as-you-trade” system. These are just two alternative ways of disrupting the ‘traditional’ way of consumer spending and retail funding.
I’ve made mention of alternative opportunities for the ‘traditional retail’ industry to experiment with new ways of ensuring consumers continue investing in their image even in tough economic times.
Allow me to unpack some possible options.
Pre-paid clothing (PPC)>>
Empower consumers that don’t want to spend on account. Empower consumers that have ‘paid off’ their accounts but cannot afford to continue shopping without having an account. Empower the consumer by changing the terms to making them pay an ‘upfront license fee’ on a monthly or quarterly basis. The latter is already used to paying a monthly account, so why not get them to commit to continue paying X amount on a monthly basis. This way they are ‘banking’ their money towards the freedom of having to spend it on clothing, cosmetics or food when they need to or want to. This is really the traditional buying-on-account system, but in reverse. Pre-paid clothing (PPC) allows the consumer to automatically invest in their image and it becomes part of their monthly budget and spend with the exception that they don’t accumulate debt. Instead, the consumer is ‘saving’ towards that incredible matric farewell dress, that school uniform, that back-to-school stationery, that all-important interview or birthday bash outfit. This model also ensures the retailer a continuous revenue stream.
Same-same, just different and a win-win for both consumer and retailer.
Styling-as-a-Service (SaaS)>>
Empower consumers to look and feel on-point. Save consumers’ time and make them look great. Embrace the 4th industrial revolution by styling your consumers as a service. Think of a personal shopper, only it is extended and continuous. Consumers pay retailers a ‘subscription fee’ on a monthly or quarterly basis. This scenario allows retailers to profile their subscription clients (their size, their age, their favourite brands, their office dress code, their lifestyle, their preferred accessories, their favourite colours etc) to map and identify a selection of new seasonal wear for every month/quarter based on their budget and needs. By embracing the power of technology retailers can style their individual consumers (using their profiled data) by offering the consumers a small selection of outfits to choose from and then ensure that the preferred options are delivered to them on a monthly or quarterly basis.
This option ensures a new fresh wardrobe for the consumer every quarter/season and a continuous revenue model for the retailer. This model will not only enhance the consumer shopping experience but will assist the retailer to understand their consumer and their buying trends. Consumer data is the new currency and the key to a more positive buying experience. In turn, retailers can not only improve their own buying processes but also improve their consumer relationships whilst ensuring a continuous revenue stream.
Again, a win-win for both consumer and retailer.
Clothing-as-a-Service (CaaS) >>
Embrace the power of the sharing economy.
As indicated earlier, this model works on the same principle as the B2B software as a service. Consumers pay retailers a ‘license fee’ on a monthly or quarterly basis. Much the same as the previous model retailers can profile their licensee clients. The subscription clients get to choose from a catalogue of available seasonal wear to their preference. The retailer again delivers the selected wardrobe but the difference here is that the consumer gets to wear the wardrobe for a season and then return it. This option ensures a new fresh wardrobe for the consumer every quarter/season, obviously terms and conditions apply, however, the clothes are never owned. The consumer receives the next fresh new wardrobe and returns the previous season’s worn clothes back to the retailer. The retailer then re-distributes or re-purpose the previously worn items to other channels at a discounted rate. This option ensures consumers always keep up with appearances and retailers not only embrace the ‘sharing economy’ but secures ongoing revenue.
_____
Current trends have seen the rise of the “on-demand and sharing economy”. Online shopping has certainly revolutionised shopping and enabled Clothing-on-demand (COD). The key to transforming the ‘traditional shopping’ model for both retailers and consumers is to embrace and integrate the endless payment and styling possibilities made possible by technology. Integrate technology together with the flexibility this offers and embrace the 4th industrial revolution to better understand your consumers.
_____
My personal consumer journey has certainly evolved over time and I urge retailers to review the ‘way it’s always been done’. It’s time for new ways to look at your consumers. Become innovative with the consumer’s buying power and embrace their need for convenience.
#consumer #retailer #clothingondemand #cod #clothingasaservice #caas #consumerdata #retailsolutions #stylingasaservices #saas #retailopportunities
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It is no secret that South Africa is one of many countries currently experiencing a difficult economic climate. The retail industry is taking a lot of strain as consumers are spending less. Although, online shopping has not only transformed the way we shop it has also added a huge benefit in the form of convenience.
I have given the inter-dependable consumer-retailer relationship some thought. I’ve used my own personal journey as a consumer for a frame of reference and have tried to extend this reference to peers and people within my circle and what I observe from their buying patterns as consumers.
Me the consumer
I opened my first store account (much to the dismay of my older self) already when I was a student. The ‘luxury’ of this was a saving grace in many ways but also a curse….one card generally leads to another and another ……..Before I knew it I had a magnificent wardrobe full of clothes and a pair of shoes for literally EVERY occasion complete with a huge amount of debt. At times I could even hear myself sitting in an AA meeting saying: “Hi, I am Bernice and I am a shopaholic”. The problem is that whenever you go to the shops to pay your account you end up buying something new. My younger self struggled for years to NOT shop on account and to pay off these damn accounts. Boy…was it difficult.
Thankfully as you get older and wiser you learn not to buy on impulse and that cash buying is king. The conundrum comes in that once you have paid off all your accounts, keeping in mind that you are so used to paying money towards these accounts, it takes the ultimate restraint to NOT buy on account again. Account buying is so easy and forces you to not only make X amount available in your budget for settling the monthly account/s, but simultaneously encourages you to keep up appearances.
As an on-account-buyer, once you’ve finally paid off your accounts, you think twice before buying anything, especially when you need to force yourself to buy it cash and even more so in difficult economic times. Buying on account is much more affordable because of the small increments. Remove the small increments and you just stop buying. Zero Sum Game for both the consumer and the retailer.
You the retailer
I know some people in my network who have been in the retail industry for years and whose livelihood depends on it. Times have been tough. The retail industry is finding itself having to become more innovative and creative to stay alive and competitive in the war for mind share and revenue. The retail industry has many challenges ranging from investing in mountains of stock (at the risk of not selling them) to paying astronomical amounts for rent when a consumer can simply browse the stock in-store and ultimately order it online; and consumers who once bought on account and have now stopped buying.
I have pondered this over the past couple of weeks. I am a middle-aged woman who likes to look and feel on-point. I find myself living in an Instagram world, where shopping online is certainly much easier and more convenient than having to go to a mall, try on a 1000x things and walk out the mall several hours later.
A typical clothing journey in the 21st century looks like this: once you end up buying an item you may wear it once maybe twice, take a couple of pics/selfies, post it to social media, then it gets buried in a cupboard never to be taken out again, because you would not be seen dead in the same dress and by the third opportunity to wear it you are already bored with it etc. That concludes the lifespan of the item. We have become an on-demand society obsessed with image.
Opportunities for both consumer and retailer
I believe there are many opportunities for retailers to use the current social community trends to their advantage. I have gained some experience in the Software-as-a-Service (SaaS) industry. This business model pretty much works on the principle that clients pay a monthly or quarterly fee to use software solutions for their business. The client owns their data but never owns the software. This SaaS business model can without a doubt be applied to the retail industry.
The online retail industry has seen the rise of some innovative payment gateways such as PayFlex. PayFlex allows online consumers to buy what you need now and pay the merchant in 4 interest-free installments. Great concept. For retailers needing a cash boost/advance to enhance or grow their business, Merchant Capital offers innovative short-term funding solutions on a “pay-as-you-trade” system. These are just two alternative ways of disrupting the ‘traditional’ way of consumer spending and retail funding.
I’ve made mention of alternative opportunities for the ‘traditional retail’ industry to experiment with new ways of ensuring consumers continue investing in their image even in tough economic times.
Allow me to unpack some possible options.
Pre-paid clothing (PPC)>>
Empower consumers that don’t want to spend on account. Empower consumers that have ‘paid off’ their accounts but cannot afford to continue shopping without having an account. Empower the consumer by changing the terms to making them pay an ‘upfront license fee’ on a monthly or quarterly basis. The latter is already used to paying a monthly account, so why not get them to commit to continue paying X amount on a monthly basis. This way they are ‘banking’ their money towards the freedom of having to spend it on clothing, cosmetics or food when they need to or want to. This is really the traditional buying-on-account system, but in reverse. Pre-paid clothing (PPC) allows the consumer to automatically invest in their image and it becomes part of their monthly budget and spend with the exception that they don’t accumulate debt. Instead, the consumer is ‘saving’ towards that incredible matric farewell dress, that school uniform, that back-to-school stationery, that all-important interview or birthday bash outfit. This model also ensures the retailer a continuous revenue stream.
Same-same, just different and a win-win for both consumer and retailer.
Styling-as-a-Service (SaaS)>>
Empower consumers to look and feel on-point. Save consumers’ time and make them look great. Embrace the 4th industrial revolution by styling your consumers as a service. Think of a personal shopper, only it is extended and continuous. Consumers pay retailers a ‘subscription fee’ on a monthly or quarterly basis. This scenario allows retailers to profile their subscription clients (their size, their age, their favourite brands, their office dress code, their lifestyle, their preferred accessories, their favourite colours etc) to map and identify a selection of new seasonal wear for every month/quarter based on their budget and needs. By embracing the power of technology retailers can style their individual consumers (using their profiled data) by offering the consumers a small selection of outfits to choose from and then ensure that the preferred options are delivered to them on a monthly or quarterly basis.
This option ensures a new fresh wardrobe for the consumer every quarter/season and a continuous revenue model for the retailer. This model will not only enhance the consumer shopping experience but will assist the retailer to understand their consumer and their buying trends. Consumer data is the new currency and the key to a more positive buying experience. In turn, retailers can not only improve their own buying processes but also improve their consumer relationships whilst ensuring a continuous revenue stream.
Again, a win-win for both consumer and retailer.
Clothing-as-a-Service (CaaS) >>
Embrace the power of the sharing economy.
As indicated earlier, this model works on the same principle as the B2B software as a service. Consumers pay retailers a ‘license fee’ on a monthly or quarterly basis. Much the same as the previous model retailers can profile their licensee clients. The subscription clients get to choose from a catalogue of available seasonal wear to their preference. The retailer again delivers the selected wardrobe but the difference here is that the consumer gets to wear the wardrobe for a season and then return it. This option ensures a new fresh wardrobe for the consumer every quarter/season, obviously terms and conditions apply, however, the clothes are never owned. The consumer receives the next fresh new wardrobe and returns the previous season’s worn clothes back to the retailer. The retailer then re-distributes or re-purpose the previously worn items to other channels at a discounted rate. This option ensures consumers always keep up with appearances and retailers not only embrace the ‘sharing economy’ but secures ongoing revenue.
_____
Current trends have seen the rise of the “on-demand and sharing economy”. Online shopping has certainly revolutionised shopping and enabled Clothing-on-demand (COD). The key to transforming the ‘traditional shopping’ model for both retailers and consumers is to embrace and integrate the endless payment and styling possibilities made possible by technology. Integrate technology together with the flexibility this offers and embrace the 4th industrial revolution to better understand your consumers.
_____
My personal consumer journey has certainly evolved over time and I urge retailers to review the ‘way it’s always been done’. It’s time for new ways to look at your consumers. Become innovative with the consumer’s buying power and embrace their need for convenience.
#consumer #retailer #clothingondemand #cod #clothingasaservice #caas #consumerdata #retailsolutions #stylingasaservices #saas #retailopportunities
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