Footwear and Clothing Brands Underperforming in Omnichannel
Posted by Amanda McLaughlin on Jun 27, 2024
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The apparel and footwear industries are growing rapidly and are forecast to demonstrate strong growth in the coming years.
Consumers are continually evolving in how they engage with brands, shop, and transact, seamlessly moving across multiple digital and physical channels in their journey. Leading brands in these categories offer robust apps, immersive in-store experiences, BOPIS, and easy in-store returns.
However, our survey of more than 450 brands in these verticals for the 2024 Omnichannel Leadership Report found that while many have improved their omnichannel capabilities, significant work remains to be done to enhance the customer experience.
The apparel and footwear industry is growing rapidly and is projected to achieve an 18.5% compound annual growth rate between now and 2032. This growth is partly driven by an increase in the working population, a trend towards embracing athleisure culture, growing awareness around fitness, and the move to popularize gender-neutral fashion.
While more consumers are shopping via mobile and digital channels, brick-and-mortar stores remain the bedrock of retail for footwear, clothing, and sport/athleisure brands. Digital capabilities also significantly influence how consumers view and engage with brands in-store. Many consumers still visit stores for traditional shopping experiences, but others now use stores as showrooms or fulfillment centers. Across all retail sectors, three-quarters of consumers want digital tools to enhance and support their in-store buying experience, including self-checkout, in-store inventory visibility, wayfinding features, and more.
Leading brands like Foot Locker, Nike, Chico’s, and Lululemon have made significant strides in recent years to enhance omnichannel experiences with robust mobile apps, immersive in-store experiences, and seamless interactions across all channels.
“Today’s omnichannel leaders excel by seamlessly unifying digital and physical experiences,” said Erik Holm, VP, Product Marketing at NewStore. “They don’t rely on siloed technologies but instead adopt highly flexible solutions that enable their brands to evolve with consumer demands.”
While market leaders in these categories demonstrate strong performance, many brands still lag in omnichannel capabilities and are not meeting consumer expectations.
In our 2024 Omnichannel Leadership Report, we examined each brand’s store experience and the factors that contribute to a positive buying journey for both customers and associates. We evaluated brands on the ease of finding and selecting items, the ability to access past purchase history, and the tools available to associates to create a seamless experience.
Among footwear, clothing, and sport/athleisure brands, several notable findings emerged:
Buy online pickup in-store (BOPIS) has become a critical element of the modern omnichannel experience. Today, many consumers base their retailer choices on return policies and the ease with which they can perform those returns. This is particularly important in the footwear and clothing sectors, where customers want to ensure that the sizes they need are readily available.
Nevertheless, approximately 40% of footwear, clothing, and sport/athleisure brands have yet to implement BOPIS capabilities. Additionally, among those that do offer BOPIS, only half have items available for same-day pickup, with clothing slightly lower at 44%.
BOPIS is now an essential fulfillment capability that consumers consider a baseline expectation, said Holm. While it may not be practical for brands with only a few stores, those with an extensive network of locations can find significant value. “BOPIS brings customers into the store, where they might make additional purchases, and it helps brands move stock more efficiently. Brands need BOPIS to stay competitive and meet evolving consumer demands,” he said.
In today’s landscape, where consumer patience for out-of-stock items is minimal, having endless aisle capabilities becomes paramount in saving sales and preventing missed opportunities.
More than half (54%) of brands enable associates to sell inventory from other store locations, marking a significant increase from 44% in 2022. Notably, clothing brands (56%) offered slightly higher endless aisle capabilities compared to footwear brands (55%) and sport/athleisure brands (51%). These capabilities are particularly essential in the footwear and clothing sectors, where products often come in many sizes, colors, and styles.
Holm notes that for best-in-class brands, endless aisle capabilities can boost in-store sales by up to 41%. “It’s a key omnichannel capability that can help brands unlock additional value in their stores. It can also enhance customer loyalty by ensuring you never have to say no,” he said.
However, one noticeable deficiency across all three verticals is the inability for associates to combine an in-store order and an endless aisle order into a single transaction (mixed cart). Three-quarters of observed brands lacked this capability, instead requiring consumers to place in-store orders and endless aisle orders in separate transactions. Sport/athleisure brands were relatively more likely to offer this experience (29%), followed by clothing brands (28%) and footwear brands (14%).
Consumers worldwide increasingly rely on their mobile devices throughout the shopping journey, from browsing to ordering and fulfillment. In clothing, apparel, and athleisure, a robust mobile experience is imperative. Leading brands such as Nike, AWG, Scheel’s, and Golf Galaxy utilize their apps to deepen customer relationships and foster loyalty.
Consumers often prefer using retail apps over websites because they offer a convenient and fast shopping experience, a preference that gained momentum during the pandemic. The best apps feature special offers, curated content, and a store mode for enhanced functionality.
However, roughly two-thirds of brands in these categories are still without a mobile shopping app. A higher portion of sport/athleisure brands (39%) have an app compared to footwear brands (33%) and clothing brands (31%). Among those with an app, sport/athleisure brands are less likely to allow consumers to use the app without creating an account (64%), compared to clothing (75%) and footwear (79%) brands.
“Some brands face decision paralysis when it comes to mobile shopping apps due to long-standing beliefs about their barriers and benefits,” said Holm. “However, these beliefs are no longer relevant as apps have evolved from being nice-to-have to a must-have for omnichannel brands.”
When it comes to the capability of buying in the app and picking up in-store, clothing brands topped the list (67%), followed by sport/athleisure brands (57%) and footwear brands (55%). Additionally, footwear brands with an app were more likely to offer special incentives such as insider access and exclusive drops. Specifically, half of the footwear apps offered these features, compared to 43% of clothing apps and 36% of sport/athleisure apps.
“Technology should empower store associates, not hold them back.”
Erik Holm, VP, Product Marketing at NewStore
While consumers are all about using technology in stores, many brands lag behind in providing similar capabilities to their associates. Only half or more of the brands surveyed empower their associates to perform essential tasks such as checking inventory, accessing a customer’s in-store purchase history, and placing orders from other stores. Additionally, less than half (41%) enable associates to view a customer’s online history, facilitate a return, access wishlists, or combine multiple orders.
“Technology should empower store associates, not hold them back,” said Holm. “Mobile devices are easy to use, quick to learn, and preferred over clunky legacy systems. A mobile-enabled store associate can significantly boost in-store conversions by providing seamless, continuous service without having to leave the customer’s side.”
Interestingly, clothing bands (21%) were more likely than footwear (20%) and sport/athleisure brands (17%) to enable associates to view a customer’s wishlist. However, three-fourths of brands across all segments enable associates to check inventory at other locations, with footwear brands slightly leading at 81%. Comparably, less than a fifth of brands in all three verticals enable associates to complete checkout with mobile devices.
Historically, apparel has been identified as having the highest potential for RFID adoption due to the depth and complexity of goods within the space, as well as the necessity to accurately understand what inventory is on hand and available. However, surprisingly, only a limited number of brands in our research have adopted these technologies. Less than one-fifth of all hang tags incorporate QR codes, and less than one in ten utilize RFID sensors.
Adoption of RFID technology was notably low across footwear, clothing, and sport/athleisure brands, with rates falling below 3%. However, a higher proportion of brands use QR codes on their garment hang tags. This included 9% of footwear brands, 19% of clothing brands, and a third of sport/athleisure brands.
“Not all RFID use cases are customer-facing, which might explain the low adoption figures. Brands are taking varied approaches: some are implementing RFID in warehouses, while others are introducing it in stores,” said Holm. “Regardless, it’s essential to remember that RFID and omnichannel strategies go hand-in-hand. To maximize their investments, brands need to consider both.”
Despite strides in omnichannel capabilities by footwear, clothing, and sport/athleisure brands in recent years, there is still ample room for improvement. Enhancing the customer experience through app upgrades and refining BOPIS and endless aisle programs could be key areas for many brands to focus on.
Read more about the findings and download the full 2024 Omnichannel Leadership Report.
