Target and Toys R Us posted overall sales declines during the holidays.
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Scene7 retailer customers in the apparel segment have accumulated enough experience that CEO Doug Mack has identified specific ranges in improvement the technology affords retailers, across several metrics. Among them, a typical sales lift that an apparel retailer might expect from implementing some dynamic imaging capacity is in the range of 5% to 15%, even when using only one element, such as clickable swatches, for example, he says. Some retailers have exceeded that range considerably, he adds. Retailers using Scene7 technology also have been able to reduce returns rates by roughly 2% to 5% on average, he says, by doing a better job of closing the gap between customers’ expectations and what is delivered to their front door.
For apparel that does get returned, getting it back out into the sales stream as quickly as possible is critical. “That’s particularly true if you are dealing with apparel that’s seasonal or high-fashion. Trends in high fashion come and go,” says Dampier.
Across Newgistics’ apparel clients, about 90% of retuned merchandise is eligible for resale, but it’ll be at a lower price if it’s not back in inventory in time. Newgistics’ outsourced web-based returns service speeds up that process by capturing key data including customer information at the point of sale and barcoding it on every outbound package. The coded information facilitates the quick disposition of packages that go back to the retailer.
With such advance notification about which packages are on their way back, some Newgistics clients, like Neiman Marcus Direct, are able to pick the returned item right off the loading dock and send it out in response to a customer order without having to return it to warehouse inventory first. Given the short product lifecycle for apparel, that allows Neiman to maximize sell through, says Greg Shields, vice president of operations at Neiman Marcus Direct.
While technology and systems exist to take online apparel sales into a new realm, such initiatives must compete for retailers’ time and resources like anything else. Generally, technology developments are a few steps ahead of retailers’ ability to roll them out on their sites and in their systems. Nevertheless, tech vendors say adding even some of the new functionality can boost online apparel sales, and different pricing models exist to support retailers buying into technology and services at different levels. A single function like zoom, for example, might cost somewhere in the range of a few thousand dollars a month for a retailer whose use is scaled to a particular level, while implementing a broader functionality under a license model could entail a one-time fee in six figures.
Fast forward a few years in online apparel sales, and the addition of features and functions now in development could make the tools now used to present and sell clothing online seem as outdated as a dime-store mannequin. If they find their way into standard use online, however, it will be because even the newest tools and systems designed to sell and showcase clothing have adhered to a classic business standard along the lines of that articulated by Scene7’s Mack: “In all implementation types,” he says, “our clients generally see their business benefits dwarf their investment cost.”