Monday, January 23, 2017

OUGD501 - Studio Brief 02 - Study Task 05: Research


Before generating any ideas I researched into the clothing marketplace, current technologies related to retail, problems with online shopping and target audience. I also did some further research into marketing strategies, and analysed a variety of relative visual examples. This research will directly inform the ideas created in the next stage of the process.



MARKETPLACE

Online Retailers

The total value of UK retail sales in 2016 was £358 billion, whilst US sales hit almost $5 trillion. The biggest on-street clothinf retailers in the UK can be seen below. In terms of online clothing retailers in the UK, Amazon is the most used site, alongside many others.




To try and work out what makes a retailer so successful, research was made into the consumer and what they look for in online clothing stores.

31% of consumers say that they would be more likely to make purchases if they were offered personalised experiences such as product recommendations or tailored content online. Over the years, Amazon has invested a lot of time and money into its engagement data strategy so that its personalisation is very targeted, and very effective. Amazon tracks user interests and creates a personalized shopping experience for each user. The ‘response to buying suggestions’ that Amazon offers its customers is said to generate an additional 10% to 30% in revenue for the business.

Retailers who want to use recommendation systems on their own portals can either attempt in-house implementations, or utilize third party software. More recently, recommendation systems are being integrated into complete digital marketing platforms. By monitoring how people react to marketing campaigns, companies can learn about which message characteristics cause customers to be most responsive.
There are many reasons for why Amazon is so successful, functionally. Some of the main features that I have found that make the entire platform so effective are:

  • Personal Touch - Amazon's personalized marketing strategy makes the experience suited to each user, which is hugely beneficial when keeping customers engaged.
  • Reviews - One of the most important features is user reviews as research shows that a massive 88% of consumers ‘sometimes or always’ consult a review when making a purchase, and 60% were more likely to purchase from a site that has customer reviews on.
  • Big Calls-to-action - CTAs need to be big, colourful and obvious so customers can’t miss them. Ideally they should also create a sense of urgency and get the user straight to the checkout. Amazon's buttons are extremely identifiable, making site navigation very straightforward.
  • Detailed Products - All products have descriptions, several large images, shipping details, stock levels and social sharing buttons.

In terms of the UK, ASOS is the highest ranked high street retailers’ in The UK RepTrak list, based on almost 5000 interviews with the general public. Reputation Institute executive partner Kasper Ulf Nielsen makes a very interesting point:

'It is intriguing that an online-only retailer has achieved a stronger reputation than the old high-street favourites. This not only reflects the shift in shopping habits of the UK general public, but it also underlines the point that you can build a high degree of trust, respect, and admiration without the face to face experience.'

The fact that ASOS does not have any physical stores shows that purely online retailers can be successful, and that online retail is as successful as in-store retailers.






ASOS was founded in 2000 and has used various methods to become the forefront online retailer in the UK. Some of the methods used include the following:

  • Technology Investment - ASOS has been doing on the tech front. They’re the largest UK user of Microsoft cloud services and the largest contributor of open source code to deployment automation technologies. With a young customer base, ASOS prioritizes mobile, using upgrades on its mobile app and site before implementing them on the desktop. They’ve also been known to use mobile-only promos. The result is that 50% of its customers shop via mobile, generating 60% of the retailer’s overall revenue and 70% of its UK revenue. 
  • Customer Focus - ASOS have a structured advocacy program to thank their most influential fans for speaking positively about them on social media and elsewhere. The #AccessAllASOS program gives members exclusive benefits and discounts, as well as access to special events. This is one marketing strategy that is beneficial to not only ASOS, but the consumer too.
  • Social Media - ASOS has over 4.5 million likes on its Facebook page and 5.8 million followers on Instagram. CEO Beighton also recently stated that Snapchat is 'increasingly important' to their success. In terms of social selling, ASOS manages to market its products on various social media sites, using ads on Facebook, Instagram and Twitter with 'shop now' buttons.
    Social media has been used cleverly by ASOS to allow them to communicate directly with their fans, helping to build a closer and more personal relationship with their clientele and enabling their customers to have an input. This kind of personalisation, helps customers to really associate themselves with a brand, meaning they are more likely to return or recommend the company.
  • Clear Layout - Much like the Amazon website, products are accompanied with detailed descriptions, large images and sizing info. Some products even have catwalk videos, where customers can see short clips of items being worn. The aesthetic is modern, clean, simple and very straighforward, with identifiable CTIs. ASOS does not have reviews however. 

Statistics

Some interesting statistics relating to UK retail were found when researching online:

  • People aged 18-24 are twice as likely as their parents to do internet shopping using their smartphones.
  • 81% of customers say that they will buy from a business again if they were satisfied with the experience. So yes, going that extra mile for your customers and addressing their pain points will certainly pay off in one way or another.
  • UK online retail sales reached £133bn in 2016, an increase of £18bn, or 15.9%, year-on-year.
  • 77% of men and 75% of women shop online.
  • 49% of UK consumers made their last clothing purchase online.
  • People aged 25-34 buy the most clothes online in the UK.



CURRENT & FUTURE MARKETING TECHNOLOGIES

Personalised Video Ads & Dynamic Advertising:

Video ads are currently used all over the Internet; sites such as Facebook and YouTube use cookies and other means to target specific content to their users. Almost all online video ads today are pre-made clips that are directed at certain target audiences; however, some sites are starting to use data collected to make adverts personalised. One fairly recent example of this is Facebook’s ‘Year in Review’ feature in the UK, which allows users to relive all their favourite memories from 2016. Whilst this is not classed as advertising, it is a unique feature to Facebook that makes the platform much more memorable and personal to its users.



One major company that is moving towards using personalised video ads is Amazon. Midway through 2016, Amazon tested some new ad ideas at an event in London. Amazon’s concept is to make its adverts more effective by creating them on the fly, tailored to each user's interests. To do so, graphic templates are made that contain superimposed images and text. These can be selected and altered to specific users by the company's algorithms. Whilst many commercials can be created using such motion graphics templates, a human is usually required to arrange and edit their parts using specialised software - a time-consuming and potentially expensive activity. Therefore, the challenge is in making the ads work for all users, without the need of a human to program the ads.

A recent report by Leo Kelion, technology desk editor at the BBC, highlights how the ads showed huge potential; however, much of the feedback given in the talk inferred that they needed to treat ads very carefully. Maisie McCabe, acting UK editor of Campaign, emphasised the problems very clearly:

‘Video has always been an incredibly effective way of advertising. Technology is now enabling brands such as Amazon to combine the power of video with the precision of targeted online ads. However, this must be done sensitively and openly. Brands must be careful not to scare off potential customers by abusing the trust people place on them when they allow companies to track their data. Moreover, there's a big difference between what people expect from a static display ad and online video. Amazon will need to make sure its personalised videos are more engaging than the functional shopping ones they serve at the moment.’

Another example of how dynamic ads can be used effectively can be seen by Nike's 'We Run Paris' campaign. Each runner received an email with a personalised video, incorporating their own race time and course photo. The idea was to increase runners' social activity around the race, increase awareness of the cause and of the brands involved. An example email video can be seen below.



When considering a start-up clothing brand, personalised video ads would be very difficult to use in a marketing campaign as there would be no customer data to use (unless it was bought). Essentially, this marketing strategy is best for established companies, as they have access to information about their customers and their interests. It is definitely an aspect to consider in the idea stage however.

Sources - http://www.bbc.co.uk/news/technology-36773409


Video Engagement vs Photo Engagement

In terms of advertising there are two main possibilities - video advertising and photo adverting. Whilst it is difficult to weigh up which is more effective, recent studies have shown that videos will account for 69% of all internet traffic by 2017 (Visual Narrative, 2016). This means that consumers will be choosing videos over static webpages as a place to get news, information and entertainment.

Doubleclick, a digital marketing agency, found that videos run as advertisements received CTR (click through ratios) between 4 and 7 times that of image banner ads. Actual click-thru rates for video ads were measured anywhere from .4% to .7%, whereas GIF and JPEG ads only averaged about .1% CTR.

With video banner ads, the length of interaction and duration watched can be measured. It has been found that users tend to watch more than two thirds of the video on average. This highlights how users are captivated by the advertising message for a measurable duration.


CMO released a bunch of statistics about video advertising in 2013. They found the following:

  • 72% of in-stream online video ads are watched to their completions.
  • Consumers are 27 times more likely to click through online video ads than standard banners.
  • Static images, which were worth more than video two years ago, are now declining fast, at a rate of nearly 45 percent.

Overall, it is  clear that video advertising has become a much more effective marketing strategy to use than photo advertising. A lot of the information found here is from a few years ago; since then, video advertising has blown up, with social media platforms such as Facebook and Instagram being taken over by videos. This will definitely be considered when developing ideas forward.

Sources:

https://tubularinsights.com/video-ads-more-effective/
https://www.visualnarrative.tv/blog/2016/1/18/why-videos-are-more-effective-than-static-advertising
https://www.cmo.com/features/articles/2013/8/27/video_15_mind_blowing.html#gs.o57WrlA


3D Modelling

Amazon is developing a 3D modelling system to solve online clothes shopping’s biggest problem by making size recommendations to customers based on a 'reference item'. Amazon would use a device to take the internal measurements of its products, allowing it to create three-dimensional models it would store in a database. As a user shops, Amazon would be able to recommend products with a similar fit based on whether its dimensions match the reference item within a certain threshold. As an example, if you like the way in which your Converses fit, then you could be reasonably assured any sneakers Amazon recommends as a match would fit well, too.

Currently, Amazon are only developing a system for shoes. A system that works for all types of clothing is one possibility that would help to prevent serial returners from abusing the free returns system. This is one solution that sparked some of the initial ideas.

Source - https://qz.com/730986/amazon-may-be-developing-a-3d-modeling-system-to-solve-online-clothes-shoppings-biggest-problem/



Virtual Reality

One piece of technology that is constantly evolving is virtual reality and augmented reality. To date, no large retailers are using either as a a key part of their platforms; however, there are a few recent examples that highlight the potential of virtual reality.

One example is an app called 'The Sampler', which allows you to visually see what different Converses would look like on your feet. Whilst the execution of the shoe being shown on your foot is still very unrealistic, there is huge potential in being able to model footwear without being in a store. This concept, in my eyes, will be the future of online shopping, where users can visually see clothing on their bodies without having to leave the house.

A second example that is much more refined and professional, visual-wise, is IKEA's VR app, that allows you to see products in your home. The video below essentially highlights everything you need to know. It is a very clever way of allowing customers to see what IKEA's products would look like in their home. Both of these examples inspired me to consider a VR clothing idea in the following idea generation stage.





ISSUES WITH ONLINE CLOTHES SHOPPING

Serial Returners

New research has indicated that almost two thirds of internet clothes shoppers are 'serial returners’ (BBC News, 2016). These are people that regularly purchase clothes online, have them delivered and then send them back again in exchange for a full refund. With many online retail outlets offering free standard delivery and returns, it’s easier than ever to have a change of heart having tried on your purchases.

According to industry figures, up to 40 per cent of all online fashion purchases are returned while 63 per cent of women have returned an item within the last six months. Barclaycard say that 30 per cent of us deliberately over-buy and plan to return purchases (BBC News, 2016).

Whilst this may seem convenient, there are many negative outcomes that have been caused by so many items being returned for free. Firstly, there is the economic factor; experts now say that clothes prices are rising in an attempt to recoup profits. Globally, businesses lose an estimated $8.4 billion each year because of online purchases returned due to wrong sizing, according to a report by retail research firm IHL Group. As online shopping continues to grow, the volume of returns is reaching a tipping point - generating huge costs for retailers, such as charges for home delivery and processing returned items at specialist agencies that steam clean and re-package clothes.
Recent research from Barclaycard suggested that one in five online businesses had increased prices to cover the cost of managing and processing customer returns.

To try and work out what it is that makes serial returners buy various sizes of clothes I read through an article on The Daily Mail. This featured a variety of responses from women that claim to be serial returners. Some of the most relevant points that I took from the article can be read below:

  • ‘I’ll buy four pink T-shirts in different sizes and styles from various shops, but keep just one.
  • ‘There’s nothing worse than loving an item but finding it’s too big or small, so I leave nothing to chance.’
  • ‘But I’d never wear the clothes out before returning them. Frequently, I take a picture of myself on my mobile and send it to friends.
  • ‘Some months I spend as much as £2,000, but most of purchases go back. I try to always use free delivery and returns, so it doesn’t end up costing me much.’ 

Source - http://www.dailymail.co.uk/femail/article-3643556/Serial-returners-send-buy-online-driving-prices-rest-us.html

Whilst free returns is one service that is widely considered to be standard in todays clothing industry, it is clearly one aspect that is being abused, as people feel that they can order as much as they want and return it if to their liking, without considering the sustainability issues and financial issues involved. The main problem that many people clearly see with online shopping is the fact that it is very difficult to determine what size you are before buying.

Tony Mannix, CEO of Clipper, said that the brands he worked with did not want to be associated with the vast quantities of returns he handled at any one time - enough to cover ‘forty premier league football pitches’. You and Yours reporter Samantha Fenwick - who visited one of Clipper's plants at a secret Yorkshire location - said some of the clothes did not come back in peak condition. This results in 5% of items being binned. According to Euromonitor International, Apparel Retail Volume in Units was over 100 billion globally in 2015. Whilst 5% of items may not be binned by every retailer, an estimate based on the statistics found suggest that around 5 billion items are binned each year. This therefore highlights the other effect of serial returners - the environmental effect, as such wastage is a sustainability issue that can be a big problem for retailers.

Lee Bloor, from the online fashion retailer, Lavish Alice, made a really interesting point about the whole issue:

"They shouldn't advertise free returns and free deliveries if that's a problem for them. I feel that this is partially a part of the problem in one sense; whilst it may separate some clothing stores from others, it would make much more sense in terms of sustainable reasons for stores to only allow free returns if it is not problematic'.

To stop the problem, there definitely needs to be some way of preventing, or limiting, people from ordering multiple sizes of the same item. As almost every large clothing retailer now offers free returns, it would be very difficult to stop such a service; however, there are ways of stopping the problem. This is what inspired me to focus on improving the user experience of online shopping.

Source - http://www.bbc.co.uk/news/business-36395719



It's Complicated

One problem that is associated with online clothes shopping is the overcomplexity of it, and the fact that there are thousands of retailers to choose from.

Studies by Forrester Research estimate that approximately 50% of potential sales are lost because your visitors can’t find what they are looking for. Sales are also lost where product information is missing.

In terms of the functionality of online stores, one new technological possibility that can be used by online stores is heat map tools. Sites such as Mouseflow and UserReport give detailed diagrams of where consumers are clicking, and how sites could be improved. For a start-up company, this could be very useful to trial with a test group before lanching a site fully. The best online stores have clear customer service and an easy-to-use, accessible layout. According to Kissmetrics, 81% of customers say that they will buy from a business again if they were satisfied with the experience. This will definitely be a key aspect to consider if I choose to design a new store.

Source - http://www.guided-selling.org/solve-the-5-biggest-problems-of-online-shoppers/


TARGET AUDIENCE

With online retail, the importance of target audience is crucial when, especially in the sense of marketing. Geographically, I want to focus my ideas purely on the UK because I have experienced using the online retail market and have much better access to getting feedback from people in the UK.

According to an industry report of the UK market demographic, age groups of individuals that buy clothing are very close. The highest buying age group is 25-34, followed by 18-24 and 35-44. The lowest buying age group is over 65's. It has been found that online shopping is more common for women, where 59% of women purchase clothing and sports goods online.
















I managed to find interesting opinion on the demographic of online shopping when researching online. This was an answer given to someone wondering what age group they should target when launching a clothing brand:

'So if I was to open an online shop either pick a target market of 25-30 or 30-45 or 45-75. I'm talking women's clothes of course. But men are different. Older men just buy what is necessary for work which is very prescribed and very little for casual. The real men's market is 25-36. They are into fashion in a big way because they are competing for women. There are more women in the world than there are men. Get the picture? That is the difference between the sizes when it comes to fashion. Women compete with other women and to attract a male but the real aim is to upstage another women. So for men, I would target the younger age market.'

Whilst this is just one person's opinion, they are spot on about 25-36 being the real market for men. Demographically and psychographically the majority of men at this age are looking for partners. Socially, they will be going out a lot, and therefore have a more focused attitude to their appearance and clothes.

Cooper Smith, a senior research analyst with Business Insider Intelligence, highlights some important stats about online shopping demographics psychographics:

  • Age - Despite having relatively low incomes, millennials, those consumers aged 18 to 34, remain the key age demographic for online commerce, are spending more money online in a given year than any other age group. 
  • Age - Despite having ultra-low incomes, Generation Z, those aged 18 to 24, spends the highest share of their income online.
  • Gender - The conventional wisdom is that women drive shopping trends, since they control up to 80% of household spending. However, when it comes to e-commerce, men drive nearly as much spending online as women.
  • Gender - Men are more likely to make purchases on mobile devices. 22% of men made a purchase on their smartphones last year, compared to 18% of women. 
  • Gender - Many men want to buy everything online: 40% of men aged 18-34 say they would ideally 'buy everything online', compared to only 33% of women in the same age group.
  • Income - Online shoppers tend to live in households with higher-than-typical incomes. 

As more women use online shopping than men, it seems much more suitable to focus my target audience on women, as this will solve a higher percentage of the problems online. Informed by the research I have made, 3 personas have been produced. One of these will be chosen to develop ideas forward.

1. Young Adults

Ages - 16-24
Income - Fairly low, but they spend the most online, and the highest share of their income on clothes.
Nationality - UK
Interests & Lifestyle - As young adults are still growing and maturing, their clothing interests change over the years. This means that product information, particularly sizing, is very important. Consumers of this age are mainly mobile shoppers, and are very tech-savvy when navigating online stores.
Attitudes - 76% of youths prefer to 'webroom' (research an item online before going in-store), as opposed to researching in-store and then buying online. Young people are more likely to enjoy shopping, to label themselves “shopaholics” and to find shopping less of a chore. They are also more likely to use mobiles to research or purchase products than older age groups.

2. Top Consumers

Ages - 25-34
Income - Average
Nationality - UK
Interests & Lifestyle - With a higher income, this age group has more money to spend. The top consumers are quite tech-savvy, and spend the most on clothes and sporting goods.
Attitudes - Similar to the young adults target audience, the top consumers prefer to 'webroom' and use mobiles to research for products. Whilst men are into fashion in a big way at this age, women are also clothes shopping the most online.

3. Mature Adults

Ages - 35-50
Income - Fairly high
Nationality - UK
Interests & Lifestyle - Lifestyle wise, many adults of this age have families and children. Whilst online spending for clothes is still clearly a big market in this age group, customers are interested in more expensive brands, and buying in-store.
Attitudes - Whilst this age group is still fairly young, maturer adults spend less money on clothing and prefer to shop in-store than online. Mature adults are averagely not as tech-savvy as younger consumers; they tend to use various devices to order clothing, rather than just mobile platforms.

https://www.statista.com/statistics/286096/clothes-and-sports-goods-online-purchasing-in-great-britain-by-demographic/

https://www.quora.com/What-are-the-challenges-faced-by-online-clothing-retail-stores



VISUAL ANALYSIS


After reading through Noble and Bestley's 'Visual Research', I analysed a variety of marketing campaigns and existing clothing platforms. Some of the key terms mentioned in the book were used when analysing. A list of the words that I found useful were as follows:

  • Typography
  • Colour
  • Antithesis (contrasting terms/images)
  • Metonymy (images or names replaced by symbols)
  • Semiotics
  • Signs (iconic, indexical and symbolic)
  • Puns

Colour & Antithesis

One aspect that is crucial in online clothing stores is making the user experience simple and straightforward. Clear CTIs are crucial for customers to know where they need to go and what they need to do to buy products. ASOS does this through antithesis colour use. The typography on the page is kept black, the background is white and the important CTI buttons are made green for sharp visibility and user navigation. A screenshot example can be seen below.



Iconic Signs & Metonymy

Another way in which online stores visually direct their users is by using semiotics effectively; many stores use iconic signs to visually direct users. As an example, I analysed a few UK clothing sites that use signs to highlight where to go to checkout. Icons of shopping bags and baskets were used to visually emphasise these areas. Whilst these signs are iconic, online stores also accompany them with text to further make the shopping experience clear. Therefore, online stores are not entirely metonymic, which is one aspect that I will need to consider when developing ideas. 











Antithesis in Marketing

ASOS do a great job of using contrasting images to catch potential consumers attention. Their sponsored adverts are specifically targeted to social media users, and combine clothing of interest to the user with a range of colourful, and duller, items. This contrast between items is eye-catching and grabs users attention very well. This was a screenshot that I took on the Facebook app of some of the pieces of clothing that caught my eye when scrolling down the feed. The style of clothing appeals to me and the brighter pieces immediately made me stop scrolling - a successful bit of marketing in my belief.

















Puns

Looking away from the marketing of clothing, some campaigns that have been successful in making items stand out from the competition are visual pun adverts. D&AD featured visual puns in an article on Ways to Create a Great Ad, stating that:

'Visual puns can sometimes communicate the benefit without the need for an explanatory line. This creates clean, simple ads that can stand out among cluttered competition'. 

One example of a visual pun advert can be seen by the old Fiat 132 advert, which plays on the phrase ‘a wolf in sheep’s clothing’. This is very clever advertising, as Fiat are essentially highlighting that their car is not all that it appears - without actually showing any images of the car itself in the campaign. This highlights how I could launch a marketing campaign that isn't necessarily obvious or visually clothing focused.



Another great example is an old British Airways advert, which uses the windows on its planes and light to create a visual pun of tired-looking eyes. The concept behind visual puns are very simple; however, they are very different to ordinary campaigns and have a very strong impact.








No comments:

Post a Comment