By Johan Davidsson

A recent IMRG report – Fixing Fashion – included some facts and figures that will be all too familiar to a lot of people working in online fashion retail. In fact everyone from the merchandisers and the CRO guys through to the CEO in brands where crucial metrics are heading in the wrong direction.

For these fashion retailers, customer loyalty is on the decline, abandonment rates are up and conversion rates are falling fast – by 28% since 2010.

Much of this is self inflicted. Not every fashion retailer is suffering – just those that cling to an outdated way of selling online, a way that simply doesn’t work any more. These are the brands that still rely on a manual approach to merchandising. But this is being swept away by smarter, more agile approaches that draw on artificial intelligence and machine learning to transform sales performance.

The writing really is on the wall, and the issues that will increasingly impact on the late adopters are once again highlighted in that IMRG report.

Too slow

The first is an inability to respond to trends anything like quickly enough. These days, socially-driven trends come and go in a matter of minutes or hours not days, weeks or months. The ability to ride these short-lived waves, by making on-trend products easy to find, is crucial.

Too few fashion retailers have this ability however. According to IMRG, fewer than a third can react to trends in real time, 63% take hours or days to respond and, incredibly one in 20 can’t respond at all.

Too human

Then there is the fact that hiring skilled people is getting harder and harder.

More than 90% of the retailers IMRG surveyed found it hard to recruit the people they need – and in a labour-intensive, manual merchandising world, this is a critical limiting factor.

It’s no coincidence that the people they found hardest to hire were those with the skills to understand customers (analytics) and then respond to that insight by delivering an outstanding customer experience (online marketing and UX).

Conversion obsession

Manual merchandising also promotes a focus on the wrong metrics. A retailer’s survival might depend on profit, but a merchandiser’s job is measured in conversion – a false proxy for retail success.

In my view, this focus on conversion is completely self-defeating. It creates an unhealthy focus on sales and promotions. Yes, slashing prices will help you convert more, but at what cost to profitability?

What really matters is profit, and that’s what should drive merchandising and, more specifically, product exposure…