Fashion is often viewed as an extension of who we are as individuals and it’s apparent that we hold it very near and dear. According to a report from MarketLine, apparel, accessories and luxury goods sales worldwide generated a total revenue of $1,778.5 billion in 2011, equivalent to 58.3% of the market’s overall value.
The research company predicts that by 2016, the market value will reach $3,748.7 billion, with an anticipated 4.2% CAGR over five years (2011-2016).
In this Fashion Industry Outlook, we’ll discuss how fashion brands are using online video to reach consumers on mobile devices, drive ecommerce sales and engage with users on social media. We’ll also include our outlook for the rest of the year.
First, let’s take a broad look at video advertising within the industry. Adroit Digital found that 45% of women are most likely to respond to an online video ad that appears alongside fashion and beauty content. More of these videos should be appearing alongside related content as luxury ad dollars shift from TV to online video.
Combine this information with these facts—55% of luxury brand marketers believe that sound, sight and motion are necessary to showcase luxury items and 72% agree that standard online banner ads do not do their products justice—and it’s clear why fashion brands are shifting advertising dollars to more interactive, engaging ad formats like online video.
Back in 2012, Martini Media conducted a survey of digital marketing professionals that work closely with luxury brands. When asked how they anticipate leveraging digital formats, 69% of agency respondents expected their clients to increase spending on video, and 68% expected them to increase spending on mobile.
Mobile users are fast becoming a huge audience of online video viewers. According to a report from BI Intelligence, about 50 million people in the U.S. now watch video on their mobile phones and 15% of all online video hours globally are viewed on tablets and smartphones. As such, fashion brands’ increased interest in mobile advertising and online video advertising has caused an overlap.
A 2012 report from the U.S. Luxury Institute and Plastic Mobile found that 64% of wealthy consumers favor brands that offer mobile applications over those that do not, and 71% believe that they are better connected to the brands after downloading their mobile app. To cater to consumers’ needs and behavior, fashion brands are creating mobile apps with integrated video components.
Louis Vuitton created its own mobile application with a beautified way to connect print ads with digital media and mobile commerce. Instead of bulky, aesthetically-displeasing QR codes, Louis Vuitton stamps its print ads with a branded icon that, when scanned with the Pass app, gives users access to exclusive photos, video and the mobile commerce page with details about the featured merchandise.
Burberry allocates upwards of 60% of its total marketing budget to digital. One of the brand’s most buzzworthy projects is Burberry Kisses. In partnership with Google, Burberry launched a website on which users can capture their kiss print via webcam or smartphone camera. Consumers can then dress up their kiss with Burberry lipstick, use it to seal a digital letter and send their personalized note to whomever they choose.
While the message is being sent, users are shown a personalized, animated video of their letter traveling through cityscapes to its destination. The YouTube video introducing the site has racked up more than 600,000 views.
Armani set out to engage mobile consumers with a call for user-generated content. As part of its eyewear campaign, “Frames of Life,” Armani encouraged fans to create short videos on mobile video app VideofyMe using its branded filter. Participants then shared these videos using the hashtag #FramesofYou, driving greater awareness of the brand and its campaign.
Each week, Armani picked three videos to display on its website.
Online video boosts purchase intent and fashion brands are using video to tightening the ties between mobile usage and online shopping. According to Google Insights, 79% of consumers use a smartphone to help with shopping. Additionally, Compete found that 75% of high-income consumers ($150K+) believe they do more mobile shopping now than they did three months ago (survey conducted in 2013).
Animoto found that 96% of people find videos helpful when making purchase decisions online, and with more and more consumers shopping via mobile devices, fashion brands are eager to merge the two (whether that’s through mobile websites or apps).
Speaking of purchase decisions…we’ve already mentioned that online video plays a significant role in driving online sales—this is why fashion brands are utilizing this engaging ad format to drive ecommerce.
In the United States, nearly 85% of fashion brands support ecommerce, and the Americas drive 60% of global online luxury sales (Source). Martini Media also reported that among affluent shoppers, the average spending on luxury sites was up 20% year-over-year in 2013 and American Express Publishing and Harrison Group found that 48% of shoppers discover new luxury products online.
Enter shoppable video—the latest and greatest trend sweeping through the fashion industry. The convenience is astounding. Just watch a branded video, hover or click on the items you see and bam! You’ve bought a dress.
The industry has already come a long way in terms of shoppable video. Brands like Juicy Coutoure have used YouTube to promote videos like the one below:
However, when users click on any of the options, the video stops and they’re taken away to the brand’s site. And because this video is two years old, many of the pages turn up with 404 errors. As the need for improved shoppable video formats grew, innovative platforms emerged.
Cinematique, for example, “realized the need for a more interactive and social experience through video,” states the company’s website. Here is an example of a Cinematique shoppable video from Net-A-Porter & Temperley London.
So far, Cinematique’s videos have averaged a 13% conversion rate.
“But we’re not just monitoring conversion. We’re looking at whether this person is sticking around from start to finish, what percent of touchable items are being clicked, and which items are being clicked on the most,” said Sarah Slutsky, the company’s director of brands and partnerships.
These kinds of insights are incredible valuable to fashion brands, as consumer preference and behavior play a vital role in marketing direction. There is still room for innovation in this space, and fashion brands that jump in sooner, rather than later, will be deemed pioneers (and may see greater success because of it).
Obviously for fashion brands, having a strong social media presence is essential as word-of-mouth advertising and viral marketing stem from social sharing and engagement. From Facebook to Vine to Flipagram to Instagram, fashion brands seem to have a hand in it all. Let’s take a look at how some of the bigwigs are using social video to entertain, educate and inspire.
Dior boasts more than 14 million likes on its Facebook page, and the average number of social shares on the last three videos posted is a little over 2,800. With video content ranging from teasers to collection overviews to product displays and more, Dior keeps fans constantly coming back for more.
With 53K+ followers and more than 400,000 total loops, Marc Jacobs has attracted a loyal fan base on this short-form video sharing app. The brand’s Vine profile features behind the scenes clips, sneak previews, event coverage, collection presentations and more! Take a look.
Michael Kors keeps its Instagram chock-full of video content. The brand’s last five Instagram Videos average 40,000 likes. Not only is Michael Kors using the app to highlight products, tell branded stories, etc., but the brand is also showcasing its humanitarian efforts.
One of the newer apps on the market, Flipagram allows fashion brands to create 15- or 30-second photo slideshows set to background music or narration. Though brands have the opportunity to share Flipagram videos across a variety of social media sites, it deserves its own section as it enables companies to quickly produce video from photos to share with fans.
In an interview with eMarketer, founder and CEO of fashion and beauty influencer network Style Coalition, Yuli Ziv said, “Online video started more along the lines of commercials, but now we’re noticing that brands are actually producing videos specifically for the web with the notions of [their becoming viral] and social sharing in mind.”
Social sharing is what drives true virality. Fashion brands that produce high-quality social videos that focus on the needs and wants of viewers will drive greater awareness and overall engagement through organic, word-of-mouth advertising.
Taking into account the information above, below is our 2014 outlook for the fashion industry.
Two words: engagement and actionable media. Yuli Ziv said it perfectly in her interview with eMarketer:
“Only up until a few years ago, for most fashion brands, their marketing strategy was based around print, and the only goal was to be pretty. There were no engagement metrics to attach to it. There was no call to action. You would just see a pretty image and a little logo in the corner, and the brand hoped that would create sales. And for a long time it did create sales. But today, online, there is much more actionable media. That transition is still challenging for many brands. How do we go from a static, print, beautiful advertorial page to an engaging, interactive online message?”
Already, shoppable video is moving toward a completely seamless viewing and shopping experience. However, video platforms will continue to evolve as fashion brands demand more from shoppable video ad formats. This year, ecommerce sales for U.S. apparel and accessories are expected to reach $52 billion and will experience a CAGR of 13.4% through 2018.
Alongside ecommerce, mcommerce (mobile commerce) for the fashion industry will continue to grow as consumers become more mobile-dependent. To make things easier for brands to cater to mobile consumers, new platforms like Spring, a mobile marketplace for fashion brands, will emerge. Spring doesn’t hold any inventory, but instead acts as a middleman between brands and consumers. Users are encouraged to follow their favorite companies and make purchases through the app.
The importance of personalization will also increase. Because fashion is an extension of the self, personalized marketing efforts will resonate deeply with consumers. This doesn’t mean that brands have to create individualized pieces of marketing content. With the help of big data and precise targeting capabilities, fashion brands can reach the right consumers on their preferred platforms, ultimately driving qualified views, shares and engagement.
Online video marketing within the fashion industry will continue to flourish as brands seek to bring their designs and products to life. This highly entertaining and engaging medium will evolve along with the industry, as fashion brands experiment with new ways to tie digital media to purchase decisions.