Why the customer is in control and how fashion brands should respond

Global e-commerce and multichannel retailing expert Martin Newman shares his tips on how to build a better e-commerce business.

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Martin Newman is known globally as one of the foremost authorities in e-commerce and multichannel retailing. The executive chairman and founder of e-commerce consultancy Practicology shared his tips for online success with the audience at a Virgin Australian Melbourne Fashion Festival e-commerce masterclass.

Prepare for Amazon

Lucas Dawson Photography

Martin Newman, founder Practicology
Lucas Dawson Photography

Amazon is planning to enter the Australian market, likely sometime later this year with a wide retail offering including books, home wears, groceries and clothing.

“What you need to do as businesses is to go back and talk the board of your businesses because you need to have a defensive strategy for these guys,” Newman told the audience. “You might be surprised to learn that they are one of the biggest fashion retailers, at least from a sales perspective, in the world.”

Newman said Amazon will take market share, but it will be also provide an opportunity to sell via another channel. Brand owners can sell their products to Amazon for the US e-commerce giant to sell, while retailers can sell through Amazon.

“Even if you don’t have full control of the data or the customer, I think you have to think hard about being there, because they’re going to come into your category anyway,” he said.

Expand internationally – but get it right

Newman said businesses wanting to respond to Amazon and grow their brands sustainably will need to expand into new markets.

But many fail to get the basics right on their websites.

There are many small differences between countries that can cause an overseas shopper to drop off a website before they make a purchase because the sites aren’t localised.

Product categories and names must correspond with local usage – for instance, “pants” in the Australia and the US are “trousers” in the UK. Sizes are also different in different countries, and shoppers won’t make a purchase if they can’t understand the sizing.

Newman said it was very important to get the “hygiene factors” right. This means ensuring prices are offered in local currency and that country’s most popular payment options are offered, which is even more important when brand awareness is low.

Structure for international success

Companies sometimes make the mistake of not giving the e-commerce team extra staff to run their overseas expansion.

“If you’re going to internationalise, it’s a big ask for the people who trade your domestic market here in Australia and New Zealand, people are already working pretty hard,” Newman said. “And arguably they might not have the knowledge and skills to take you into new markets.”

In fact, one of the keys to success in a foreign market is to be plugged into that country, and that means local staff and local expertise.

Businesses need native language speakers who understand the nuances and culture of the country.

“Local language is massively important,” Newman said. The more of a website that is translated the greater conversion will be.

Get your returns policy right

“I won’t buy something online unless I know what it’s going to be like if I have to return it – are they going to charge me, is it going to be a complicated process?” Newman said.

He is not alone. European research reveals the important of return policies on websites:

  • 76% of shoppers viewed a company’s return policy before placing an order.
  • 51% of shoppers drop off a site because the returns process offered either wasn’t easy or wasn’t convenient.

“It’s a massive, massive barrier to conversion and it doesn’t matter whether you’re selling in Timbuktu or the CBD of Sydney, the issue is the same,” Newman said.

The returns policy needs to be prominently and clearly displayed to give shoppers confidence.

The customer is in control

In years past, retailers were in control, Newman said. Customers could only visit bricks-and-mortar stores near where they lived and only when the stores were open, but e-commerce has changed all that.

“Now the customer is 100 per cent in control of when, where and from whom they buy,” he said.

This means that customer experience and customer service is everything. “It’s a huge strategic driver for your business and should be treated as such,” Newman said.

He said US online appliances retailer AO.com puts the customer at the centre of everything it by making customer satisfaction they key target for its staff, instead of the more traditional KPIs of sales, website visits and revenue.

“Retailers need to become service providers,” he said.