The Future Is Online for Apparel Retailers

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The Future is Online for Apparel Retailers
Euromonitor International 26 October 2011

Coming up with innovative ways to harness the huge potential of the internet is the biggest retail challenge facing the apparel industry over the next five years. And at the core of the challenge is the need for a fast, efficient and hassle-free returns service.

A tipping point for online apparel retailing
The practice of waiting in line for an available changing room to try on new clothes might one day become a novelty rather than an unavoidable nuisance as apparel internet retailing enters a dynamic new era of growth. Over the 2005-2010 period, global online sales of clothing and footwear generated US$32 billion of incremental value, with compound annual growth (CAGR) running at 18%. That was four times faster than any other retail channel, according to Euromonitor International. Yet the size of online retailing's incremental growth surge, robust as it was, will seem like small fry over the next five years as a new wave of internet investment comes on stream. And at the root of new investment is the need to make online apparel shopping more convenient, accessible and user-friendly.

Online distribution hubs
This month, the UK's House of Fraser department store chain, which is the fifth biggest in the country with some 61 outlets, is launching two 'virtual department stores' in a bid to ease the difficulty factor of buying clothes over the internet. It is indicative of the type of strategic retail innovation that will become increasingly visible in developed markets over the next five years as department stores, as well as specialist retailers and big grocery chains, look to beef up their participation in what has become a squeezed apparel market. In the specific case of House of Fraser, two 'Buy and Collect' outlets (located in Aberdeen and Liverpool) will be piloted as distribution hubs for online orders. They will provide changing rooms as well as customer service...