Online fashion is one of the most interesting sectors worldwide. Fascinating pure-players such as ASOS, Zalando and boohoo.com are conquering the world, and large physical retail chains such as Zara, H&M and Mango are relentlessly working to integrate digital into their spectrum of shopping channels. However, fashion e-tail is challenging: Customers have to sacrifice the ability to try on apparel for a different kind of experience, often driven by convenience and price. Return rates are high and returns are often a hassle for buyers and a financial challenge for sellers. Are retailers ready to give consumers what they need? Are you turning visitors into buyers?
The latest Ecommerce Benchmark & Fashion study by the Ecommerce Foundation, conducted among 250 retailers from seven countries in cooperation with our partner organisation Ecommerce Europe, reveals the most relevant KPI of this sector. Following the research by the Ecommerce Benchmark, we have compiled some insights and tips:
1- Conversion rates
First of all, when starting to sell in a new market, retailers should adjust their expectations to the local reality. Average conversion rates differ per country. According to the report, the average conversion rate in the e-fashion sector is 1.8%. The UK boasts the highest conversion rate with 2.6%, and Italy las behind with a rate as low as 0.9%. A German retailer being used to an average of 1.9% should thus not expect his Italian business to reach that same level within no time.
Source: Ecommerce Benchmark & Fashion Report
Tip: The report cites expert Martin Newman, CEO of the British consultancy Practicology: “Improving your conversion rate requires optimisation of products, pricing and propositions as well as the usability of the site. However, my main advice is that conversion rate optimization should be an ongoing program of activity, not a one-off project, if you want to keep up with consumer expectations.”
2- Bounce Rate
Many e-commerce companies put a lot of effort and resources into the acquisition of traffic. However, traffic often does not equal sales at all. Whenever there is a discrepancy between the expectations of the visitors and what they find when arriving at your landing page, they will disappear. Bounce rates vary slightly per country, finds the research: The Netherlands show a rather low bounce rate with 33.5%, whereas Germany and the UK with respectively 39.3% and 38.2% are at the higher end.
Tip: Invest in landing pages that correspond to customer expectations. Take into account the preferences of your (local) audience, as well as the expectations you create yourself through your campaigns. Usability and content are key!
3- Abandoned baskets
Abandoned baskets- a well-known challenge for any online seller. On average, 52.5% of fashion shopping baskets are abandoned, finds the benchmark. The UK is on top of this unfavorable list with a rate of 57.3%. Denmark has a very low abandonment rate with 25.5%.
Source: Ecommerce Benchmark & Fashion Report
Tip: Customers leave their baskets for a number of reasons, including getting distracted or just browsing around. However, there are also many relevant factors that you as a seller can actively influence: Be transparent and upfront about extra costs, shipping times and the total price. Bad surprises drive customers away! Furthermore, a lot of ground can be gained at the checkout: Be simple (not too many clicks and forms to fill out), be trustworthy (think local trust marks and a secured connection), and offer the payments options the local customers are used to.
4- Average delivery and return costs
The costs a company has to cover in order to get a product from a warehouse to a customer, or in order to handle a return, vary from country to country. In Italy, a seller has to cover an average €8.22 for a product delivery, in Greece this amounts to €3.43. Second most expensive is Germany with €6.33. In some countries, such as Germany and the UK, free delivery has become the standard, which is also an important factor in this cost-equation.
Source: Ecommerce Benchmark & Fashion Report
Tip: Logistics should be a key priority in your cross-border strategy. In order to reduce costs and increase efficiency, you should carefully weigh all options of streamlining delivery and returns in all (foreign) markets. The price of a delivery also influences the product price and the costs your customer will have to pay (if any). Many retailers selling to international audiences use third party providers in order to take care of order delivery and handle returns.
5- Your customer retention needs improvement (Repeat Buyers)
The Ecommerce Fashion Benchmark shows that in Germany (45%) and the Netherlands (51.3%) the number of ‘repeat buyers’ is high, whereas in the US (20%) and the UK (17.5%), this share is barely half of that. The degree to which customers are driven to buy again in the same store might vary per country, but one thing is for sure: Customers only come back if the experience was a good one!
Tip: A good shopping experience ranges from usability to a good, native speaking and easily available customer service, to short delivery times, transparency on costs and a clear and smooth return policy and after sales care. Invest time and money in launching your new markets in order to make sure you make a great impression right away- loyal buyers are the ones spending the most!
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