Nowadays, every organization can gain a competitive advantage by adopting information technology in its business plan. New types of retailers have been born, retailers that do not need a physical store, but the ones who are at a click away such as Zalando and Asos. So, the blog will dive into giving a perspective on how fashion online retailers maintain their brand loyalty as it cannot be measured and obtained by traditional factors. Could AI influence brand loyalty? The answer is YES.
Online fashion retailers such as Zalando and Asos, use the click-only strategy. Click-only companies can only be found online, in a constant need for innovation in order to improve efficiency, enhance sales, and increase customer satisfaction (Forbes, 2019). So, it can be said that these fashion retailers create the service of connecting customers to different fashion brands, and also with their brands. But how do they maintain and gain brand loyalty? Brand loyalty is usually affected by promotion, consumer satisfaction, and trust.
With more products, an online retailer has higher chances of more customers and higher satisfaction. By delivering different functions on the website, such as color search, the customer can see different products, not actually looking at the brand. This happens with the help of machine learning. By looking at prices, a good price of the products on a website is crucial for loyalty. An optimized machine learning algorithm will adapt the price by looking at past datasets such as competitors’ pricing data, transactional data, past promotions, inventory, and customer reviews. Thus, machine learning can affect brand loyalty, as a customer can go to another website which has smaller prices on the wanted product.
Last but not least, brand loyalty requires marketing programs that target potential customers and maintain the current ones. One of the most important factors is the customer’s contact with the brand, so traditionally it would be the salespeople. But what happens when the encounter is online and there is no person who can make an impact? Artificial Intelligence can positively impact the customer’s experience on the website, with the use of Chatbots or Virtual assistants. These services are created with the help of machine learning, which collects as much data as possible and learns from each customer interaction. For example, Asos increased its purchases by 300% using a chatbot (Forbes, 2018). Visual search is another extraordinary innovation that AI can offer. By only uploading a picture with a fashion product the Asos application matches the image with similar products (BusinessInsider, 2018).
More and more functions created by AI are changing the way people are shopping. Could these new trends lead to the extinction of traditional retailers? No more going shopping on the streets or at a mall? Could AI also be implemented for traditional retailers? Feel free to share your views!
References:
BusinessInsider, New App Asos app feature which uses a photo to save you money, [Online], Available at https://www.businessinsider.com/asos-style-match-app-review-how-to-use-tips-tricks-2018-3
Forbes, 2018, Customer Experience is the new brand, [Online], Available at https://www.forbes.com/sites/shephyken/2018/07/15/customer-experience-is-the-new-brand/#24cf0e8a7f52,
Forbes, 2018, How much money has poured into AI and Customer experience?, [Online], Available at https://www.forbes.com/sites/blakemorgan/2018/06/06/how-much-money-has-poured-into-ai-and-customer-experience/#579d7ca27ed2,
Hi Ada! Really nice post. Good insights into how the fashion industry are affected by these technologies. It was useful to see real life examples. I also know that Asos has short videos of their clothing, which I think is really useful for optimizing conversion rates. One point that would also be nice to consider is how these technologies can improve physical fashion stores, as I think people will still always want to go shopping and try on clothes.
Hey Ada!
My opinion is that traditional retailers will not go extinct. While companies are less able to generate customer data in stores as we’ve learned from the Coolblue guest lecture, being in a physical store allows for a more human approach, and you are able to feel the product. Both of these components are not imitable online.
The current pandemic might make it seem important to emphasize to not shop in stores, but instead shop from your home. However, down the road this will disappear when everything returns to normal.