This post was originally published on Forbes.com.
With millions of people around the world staying home, strange things are happening to the economy and many industries. Those not deemed essential are working from their homes and without many opportunities to go outside people are spending much more time online than before. They work, play, stay in touch with friends, and go shopping online.
While fashion and beauty retailers, like other industries, are suffering financially during this pandemic, many are also seeing massive increases in online traffic during the past few weeks. The CTO of Shopify, Jean-Michel Lemieux, shared a screenshot on Twitter that shows their merchants receiving “Black Friday level traffic every day”.
A big increase in visitors to retailers websites could seem like a silver lining during these troubled times, but for many shops those visitors don’t actually turn into customers.
Fashion and beauty products sold online have always been hampered by the obvious downside of customers not being able to try on and feel out the products before buying them. Some brands have relied on physical retail stores where prospective customers could browse, try out, and get inspired before deciding to order online. For most online shops the common approach has been to offer generous returns policies to let customers take more chances with products. Buy it now, and if it doesn’t work out, simply return the products at no or low cost within a set time frame.
Unfortunately, these approaches are not cutting it in the current situation. Many, if not most, fashion and beauty retail stores all over the world are closed and will remain so for an unknown period of time. Even if the stores were to reopen soon, it’s hard to know when customers will feel safe enough to go out and shop in public again. Those returns policies might not do much to help customer confidence either, since an extra trip to the post office or package shop carries the risk of interacting closely with other people and potential infection.
The digital approach
For years there’s been a growing interest in digital solutions that help customers make the right choices and to make those choices faster and with less hassle. These solutions can help shoppers make sure that a certain product will fit and compliment them and increase the likelihood of making a sale even in times with high consumer uncertainty.
Now more than ever, fashion and beauty retailers need to start investing in tools that support and increase the purchasing confidence of existing and also potential customers.
For example, in the fashion category there are virtual fitting and sizing solutions helping shoppers find the right size and fit. Some will simply map a shopper’s body measurements to size charts or garment measurements. Others will show how a product might look like using augmented or virtual reality technologies. There are also solutions, like Easysize, that don’t rely on garment or body measurements and instead use machine learning to recommend a size based on a shopper’s unique style and fit, as well as their history of previous purchases and returns.
Extending return windows
In order to adapt to the current situation, many online shops are changing their returns policies and extending the return windows. Cuts, a premium t-shirt maker, for example, tripled their exchange window to 60 days. The company’s CEO Steven Borrelli said, “People can’t really go to the post office right now, so we want to be really flexible with people.” Adore Me, a fast-growing lingerie and activewear brand, have also expanded their window by a factor of three and their policy is now 90 days.
Similarly, big retail chains like Gap, Macy’s, and Victoria’s Secret are all extending their return windows by 30 days or more. Some, like Kohl’s and Sephora, even specify that the return period will be extended up to 30 days from when stores reopen. These extended return windows might be helpful, but that will probably not do much to assuage the feelings of customers. As BMO analyst Simeon Siegel told CNBC, even in a post-pandemic world, “there is going to be a lingering fear of walking into stores.”
The same challenge applies to online purchases. Returning products still involves a trip to the post office for most people and this will be associated with an increased and probably unnecessary risk for infection in the minds of those customers. My prediction is that despite longer return windows and “free returns” offers, customers will increasingly become and remain more hesitant to purchase products they are unsure about in the first place, knowing there will be a chance they will have to return them.
Delaying the payment decision
One solution that might be having it’s big breakthrough is the try-at-home model, popularised by companies like Stitch Fix and Adore Me. Customers receive an order with multiple items they chose themselves or curated for them by an algorithm or a stylist working at the retailer. They can try on the products in the comforts of their own homes and keep the items they like while sending back the ones they don’t.
According to Ranjan Roy, head of content at Adore Me, they have seen a big increase in the number of new customers using the product in the past few weeks. Speaking to Glossy, he said: “Typically, 30% of new customers use the feature, but in the last four weeks, that has jumped to 50% on some days.”
But while this approach is increasing in popularity, it still comes with its own challenges. “[...] We are trying to grow this in a scalable manner. There are so many complexities to this, in terms of how you onboard customers, and how you position the service and the logistics capabilities to handle returns,” Roy explained. Brands in other categories, like jewellery have also experienced and increased interest in try-before-you-buy products from customers.
Some companies are combining their packaged offerings with “buy now, pay later” services, like Afterpay. When a customer buys products using this solution, Afterpay takes on the full credit and fraud risks for the purchase, allowing the merchant to drive sales while also offering the customers the comfort of a flexible payment plan. This approach could turn out to be crucial in a time of financial insecurity for many and where many people’s paycheques could be delayed or lower than expected because of the health crisis.
The only certain thing is uncertainty
It is still unclear, and probably impossible to predict, how long lockdowns and shelter-in-place orders will be going on for. We are in the midst of a global pandemic after all. Many retail stores might not survive long periods of being closed and even if they survive, the habits of shoppers could be changed for quite some time afterwards if not forever. Customers could be hesitant to try on clothes or sample makeup in stores due to fear of infection for the foreseeable future. So it seems safe to assume that the lack of touch and feel for customers is here to stay and it is up the fashion and beauty retailers to adapt to this new reality as quickly as possible.