The fashion business world has changed with improvement in technology. In particular, e-commerce has had a big effect on how we buy things. Instead of going to the store to purchase items, we can simply sit on the couch and buy anything we want online. For example, you can easily buy shoes at online stores like Walk London. You can always read up reviews about Walk London to know what kind of company they are and whether they have quality and reliable products.
If you’re new to shopping online, you can read more about buying online to gain the first-hand experience from users who have. However, the question is, is this mode of purchase damaging big fashion companies in any way?
To answer this question, we first need to consider what e-commerce is and its effect on the current fashion market. In the past few years, there has been a rapid surge in the e-commerce industry. Between 2014 and 2018, the revenue generated by the e-commerce industry grew by 113% and achieved a market value of $2.8 trillion.
In the U.S alone, about 20.4 per cent of the revenue generated by fashion retail was attributed to online sales from apparel and accessories. This was evaluated at $102.8 billion in revenues. As you can see from the data above, e-commerce has mostly had a positive effect on the fashion industry. But we have to ask, has it damaged the big fashion companies in any way.
The answer to this question is, yes. Because e-commerce allows every retailer to profit from its business model, it has in some way affected the sales of big fashion brands. If you consider the past when sales were only done in-store, small brands struggled to keep us. Setting up a store and maintaining it require quite a great flow of capital. At the same time, it was not guaranteed that the store would bring the number of sales that the retailer expects.
However, with the advent of e-commerce, the risk is reduced and long-distance communication with customers is facilitated and made cheaper, faster, and easier. It helps smaller businesses cater to a larger audience without a big investment. A business can easily maintain a website for promoting and selling its products without necessarily owning a physical store.
This change has somehow levelled the playing field for all fashion retailers regardless of their size. It presents the same opportunity to both small fashion retailers and big fashion brands. This is the main reason why so many small fashion retailers can make a lot of sales through e-tailing. In fact, according to a report, more than $4.3 billion were purchased online in 2014, which was double the amount purchased in 2013. This data shows that e-commerce has grown and small businesses have really profited from it.
That’s not to say that fashion giants haven’t profited from it either. In fact, they have also been leveraging it for themselves. For example, Nike, one of the top manufacturers of fashion products in the world, recorded a growth of 30% through e-commerce sales in 2012. Another big fashion retailer, Debenhams, recorded a 40% increase in online sales in April of 2013. To buttress this further, John Lewis reported a 20.7% increase in its products sold online in 2012.
This shows that big brands have also been enjoying the benefits of e-commerce. There has been an immense increase in product sales and awareness. That said, e-commerce has made it easier for the customer to purchase products of their choice, right from their home. That means that a customer can decide not to shop from Nike, but instead shop from a lesser-known brand and still get value for their money.
This type of buying decision can negatively affect the big brands, and in the context of this article, damage them. So, while e-commerce has a positive effect on their sales, it can also have a negative effect by levelling the playing field and allowing customers to shop from smaller brands.