March 4, 2021
5 Actionable Digital Engagement Strategies for Fashion and Apparel Brands
Digital customer engagement has become an urgent need for fashion and apparel brands. To survive in this highly competitive industry, you must deepen your data literacy for actionable insights, agile decision-making, and personalized customer engagement across channels and touchpoints. Here are 5 impactful strategies for acquiring, growing, and delighting consumers online.
McKinsey describes fashion and apparel as “a winner-takes-all-industry,” with top-performing brands capturing the vast majority of economic profit.
These top players have experienced rapid growth over the past decade through effective digital strategies and a heavy focus on improving the customer experience across all channels.
Although digital and analytics excellence has been a key competitive advantage for years now, the fashion and apparel industry’s need for digitization has skyrocketed in the wake of the COVID-19 pandemic. According to McKinsey, the pandemic has dramatically widened the gap between industry giants and small-to-mid-sized brands. Businesses that survive this shift will be the ones that embrace digital and analytics sooner rather than later.
Customer Data Platforms (CDPs) are a popular tool for quickly and effectively adapting to this digital transformation. Winning fashion and apparel brands are using CDPs like Lexer to improve the digital experiences they offer with advanced analytics and customer segmentation, personalized engagement, and omnichannel campaign orchestration.
In this playbook, we’ve compiled data-driven strategies and industry-specific examples for engaging fashion and apparel consumers at key touchpoints.
5 actionable digital engagement strategies for fashion and apparel brands
1. Grow your email database.
One of the most cost-efficient ways to engage consumers is through owned channels like email. By using data to inform your prospecting campaigns, you can build a robust pipeline of high-quality prospects for future email marketing.
Our high-performance prospecting strategy is built to kill three birds with one stone: building your email database, re-engaging lapsed customers, and enriching customer profiles.
STEP 1: Build your audiences.
Start by identifying your high-value customers, lapsed or disengaged customers, and customers with information gaps in their profiles. We recommend including these three audiences because:
- Targeting lookalikes of your highest-value customer segments attracts quality prospects who are likely to become loyal, high-value brand evangelists.
- Targeting lapsed customers or those who’ve opted-out from email gives you the opportunity to re-engage those customers on a channel they’re actually paying attention to.
- Targeting customers with gaps in their profiles allows you to capture new insights about these customers to improve future engagement efforts.
Additionally, segmenting your high-value audiences by simple attributes like gender, recency, or past products purchased can provide customer insights that inform the prize or offer featured in the campaign.
For example, high-end ski apparel brand Spyder used the Lexer CDP to segment high-value customers by frequency of purchases, average order value, and location to identify three core persona segments. By matching the creative, messaging, and products featured in their prospecting campaigns to the inferred buying motivations of these personas, Spyder drove an 85 percent growth in Spyder’s email database, a 94 percent increase in revenue for promotional emails, and a 52 percent increase in revenue for content-focused emails.
STEP 2: Develop a contextualized campaign featuring a relevant offer.
Once you’ve identified your target audience and derived insights from the current information you have about them, use that information to develop an enticing and contextualized offer.
Your featured offer doesn’t always have to be a free gift or a giveaway—it could be tickets to an exclusive event or access to gated content, for example—but it should be both enticing enough to encourage people to sign up and specific enough to provide you with additional context about who your audience is and what their interests are.
For example, gift cards are generic offers that don’t tell you anything about a prospect’s specific product interests and buying motivations. If your brand sells both men’s and women’s clothing, then developing a campaign around men’s clothing, shoes, and accessories is a more targeted and useful strategy than developing one that solely features a gift card.
STEP 3: Ask the right questions on your sign-up form.
Sign-up forms present an important opportunity for learning about new prospects and customers. This information freely given by customers is known as zero-party data.
Be sure to ask basic identifying information like name, email address, gender, and location, because segmenting audiences by these simple attributes can increase campaign results dramatically. If you’re not currently capturing gender in your sign-up forms and surveys, the Lexer CDP can accurately infer gender for about 65 percent of your database using a gender inference model based on first names.
Additionally, ask for preference information to help you sort contacts into the correct personas. For example, if you sell both professional and comfort clothing, you could ask contacts if they’re most interested in apparel for work or for home. Try to avoid asking open questions if possible, because open-ended responses are difficult to combine and standardize into useful attributes.
Lexer’s Secure Form Feature can help you build a branded form that immediately unites respondents to customer profiles within the CDP.
STEP 4: Follow up!
All too often, brands and retailers forget to include this important conversion opportunity following the form submission: Directing prospects to a relevant product page after they’ve signed up.
Because entrants have already expressed an interest in your brand, they have a higher potential for making a purchase. Make the most of this top-of-mind moment by directing prospects to a product page and following up with a relevant email immediately after their entry. By triggering an email welcome series following sign-up, you can continue nurturing prospects and maintain an active relationship with your brand.
When the sweepstakes winner is chosen, be sure to email all of the non-winners with a discount or other offer to minimize their disappointment, thank them for participating, and encourage them to convert. Messaging such as “sorry you didn’t win—but here’s a 10% discount when you spend $50 or more!” gives interested prospects the incentive to make their first purchase regardless of the outcome of the sweepstakes.
Although prospecting campaigns aren’t typically associated with immediate revenue generation, this strategy can drive a small but impactful number of conversions that fund the initial cost of the campaign.
2. Acquire new high-value customers.
Our strategy for increasing the impact of your acquisition campaigns is founded on the Pareto Principle or the 80:20 Rule.
The Pareto Principle occurs when 80 percent of the business’s overall revenue comes from only about 20 percent of its customers, and it’s massively common for fashion and apparel brands we’ve worked with. Fashion consumers have a tendency toward strong loyalty for the brands they love, resulting in the “winner-takes-all” dynamic aforementioned by McKinsey.
Knowing that a small number of customers will provide materially higher value to your business than the rest, you need to build your lookalike acquisition audiences around these high-value segments to drive significant improvements in campaign performance and growth.
STEP 1: Identify your hero products for customer acquisition.
Once you’ve identified your highest-value customer segments, dig into your data to understand which products customers most often purchase first. This information will help you make inferences about what attracts loyal, high-value customers, so you can choose the right products to feature in your acquisition ads.
Rank each product category by the volume of customers who purchased them first, and then measure the historical and future value of these customers to place products on a value/volume matrix. You should find four distinct segments:
- High-value, high-volume: These products should be your first priority, because they provide the biggest opportunity for attracting high-value customers.
- High-value, low-volume: Often, these products fall into niche categories that drive a low volume of loyal, long-term customers, providing a compelling opportunity for targeted acquisition.
- Low-value, high-volume: These products may be useful for attracting new customers to your brand, but are unlikely to lead to high lifetime value. Avoid featuring them in your paid campaigns.
- Low value, low-volume: These products might be useful for cross-selling or retention campaigns, but aren’t effective for driving the first purchase. Avoid featuring them in your paid campaigns.
Once you’ve identified your best products for high-value, high-volume customer acquisition, take a peek at the churn risk of the customers who fall into these categories. Choose the products with the highest potential for future growth.
STEP 2: Choose your highest-value audiences for each hero product and build your lookalike audiences around them.
Now that you know which products are most effective for high-value acquisition, build a segment of all purchasers of that product. Segment these audiences further by layering on additional attributes like gender, email engagement, and recency.
As you continue to layer on attributes to improve the audience’s quality, you’ll notice that the audience size decreases while its lifetime value increases. Building your lookalike audience around this small, high-value segment can drive an impressive return-on-ad spend (ROAS), both in the short-term and the long-term.
For example, Brand Collective, the apparel group whose brands include Clarks, Hush Puppies, Shoes & Sox, Superdry, and Volley, used this process to create agile, insight-driven acquisition campaigns. By personalizing the creative and messaging around the high-value audiences identified using the Lexer CDP, they drove a 220 percent increase in ROAS, a twofold increase in customer acquisition, and a five times increase in revenue from paid channels. Click here to read their story.
STEP 3: Create and activate a targeted campaign featuring your hero products.
Finally, target your lookalike audiences on paid social with creative highlighting the hero product you chose in step one.
Along with featuring your hero product to attract high-quality customers, simple tips for increasing the ad’s relevancy and impact include:
- Personalizing the ad based on gender, instead of sending a broad, gender-agnostic campaign to your entire audience.
- Contextualizing the ad based on current events, such as a holiday sale happening soon.
- Incorporating your brand values into the messaging to make an emotive first impression on new customers.
A CDP like Lexer can help you quickly and easily activate these acquisition campaigns across paid channels. If you’re just getting started with paid, our support team can help you become an acquisition rockstar in no time. For example, snow apparel and equipment retailer Corbetts teamed up with Lexer to launch their first-ever data-driven Facebook advertising campaigns, resulting in massive ROAS. Click here to read their story.
3. Convert one-time buyers into two-time buyers.
The second sale is the most important milestone in the journey to long-term customer loyalty.
That’s because two-time buyers are nine times more likely to make repeat purchases than one-time buyers. By communicating with customers at the right time, through the right channels, with the right messages, you can maximize the number of one-time buyers who go onto becoming highly valuable lifetime customers.
Here’s how to set up an insight-driven upsell campaign that turns one-time buyers into two-time buyers:
STEP 1: Identify your highest-value customer segments and product categories.
Although one-time buyers are often one of the largest segments by volume for apparel brands and retailers, the reality is that not all of these one-time buyers have the potential to make a second sale.
Instead of targeting all of the one-time buyers in your database, target only the customers who have the potential to become loyal, long-term customers. Be sure to suppress churned, irrelevant, or otherwise unqualified audiences to reduce wasteful ad spend.
Additionally, look at the first-purchased products with the highest conversion rate to second order, as well as the product most commonly purchased next.
For example, if you find that denim has the highest conversion rate to second order, then this indicates that customers who purchase this product first have the most satisfactory brand experiences. By looking at the products these customers most commonly purchase next, you can identify which products to feature in your advertisements.
STEP 2: Dig deeper into your data to discover insights about the right time to target buyers following their first purchase.
For this strategy, timing is critical.
If you wait too long to target one-time buyers, they may have forgotten about your brand. If you target them too soon, they may experience ad fatigue.
To pinpoint the optimal time to send your next marketing messages to first-time buyers, measure the conversion rate to second order, the average time to second order, and the products most commonly purchased next for each of your acquisition products.
For example, you may notice that the majority of customers who are acquired on denim tend to make their second purchase within the next 30 days, whereas customers acquired on leather jackets don’t make their second purchase until 180 to 365 days have passed.
- For near-term repurchase rates, encourage the second order by offering free or expedited shipping for orders placed within the next 30 days.
- For long-term repurchase rates, provide care instructions, style guides, and other relevant content to maintain the customer relationship until the next purchase.
A CDP like Lexer can help you automate your email or paid social advertisement to trigger at the right moment.
STEP 3: Target customers on paid social and email with relevant messages.
Now that you’ve identified the right audience, product, and timing for your campaign, it’s time to target your customers with relevant creative and messaging across channels.
If you found that the second purchase is most frequently made in the same product category as the first, then you can feature the same product in different colors or styles for your follow-up targeting. On the other hand, if the second purchase is most frequently made in a different product category, you can develop ads with messages like, “complete your look” or “based on your interest, here’s a hand-picked selection of products we think you’ll like.”
Here are some real-life examples of one-time to two-time buyer campaigns from Adidas, Lord & Taylor, Everlane, and lemlem:
4. Capitalize on repeat purchases.
Most fashion consumers don’t change their style, so repeat purchases in the same product category for new sizes or colors are common. Some products, such as denim, underwear, or tops, naturally wear down or run out and need to be replaced.
By targeting customers at the right time for these replenishment purchases, you can ensure they remain loyal to your brand instead of trying new products elsewhere.
This strategy is similar to the one-time to two-time strategy, in that its timing is the most important factor. Here are the steps:
- STEP 1: Identify the products most commonly repurchased.
- STEP 2: Determine the average time between repurchases. We recommend focusing on the time it takes for about half of customers to repurchase.
- STEP 3: Create ads and emails featuring frequently-replenished products. Be sure to use messaging relevant to the buying motivation for repeat buyers, such as “time to restock?” or “new colors you’ll love.”
- STEP 4: Create segments of customers who purchased the chosen product during the desired time range and push these audiences to paid and owned channels for targeting.
Once you’ve engaged and delighted an apparel customer on a replenishment product, you’re in a great position to grow their lifetime value by simply targeting them with timely, targeted, relevant ads. A CDP like Lexer can help you automate these replenishment journeys so you never miss the optimal opportunity to re-engage these customers.
5. Mitigate the high cost of return rates.
Online returns have the potential to cripple your margins.
In the apparel industry especially, customers tend to purchase multiple items of different sizes or colors in order to try them on at home. These “serial returners” drive up return rates and wreak havoc on your margins, given the many additional costs associated with the returns process.
Along with reducing the profitability of your ecommerce business, returns typically have a negative impact on the customer experience. By mitigating the high cost of return rates, you can keep costs low, profits high, and customers satisfied.
STEP 1: Identify frequent returners in your database.
Using customer analytics, segment customers by the frequency of returns and explore the differences between frequent and infrequent returners.
For example, you could use your data to answer questions like:
- How do NPS scores compare between frequent returners and infrequent returners?
- Which products do customers most frequently return?
- What is the lifetime value of frequent returners and infrequent returners?
- Which persona segments are most likely to return products?
These insights will help you pinpoint the causes behind high return rates, so you can adjust your digital strategy accordingly.
For example, THE ICONIC, Australia’s largest digital fashion retailer, used the Lexer CDP to understand the characteristics of frequent returners. These insights are informing new UX ideas and tailored campaigns to reduce return rates. Click here to read more.
STEP 2: Suppress frequent returners from lookalike audiences in ad targeting.
Advanced audience suppression can help you mitigate costs in a number of ways.
Once you’ve identified your highest-value customers for your acquisition and growth campaigns, suppress frequent returners from that segment before you build your lookalike audience. This suppression will ensure that you’re only targeting high-value audiences with a low likelihood of becoming “serial returners,” improving overall customer profitability.
STEP 3: Send post-return surveys to understand the reasons behind returns.
Well-executed customer surveys can improve the quality of your data, inform your acquisition and growth strategies, and lead to valuable insights such as what products customers return most frequently and why.
For example, if you find that customers most frequently cite sizing issues as their reason for returning products, then you should offer a clear, comprehensive, easily accessible sizing guide on your website. If you sell your products in multiple countries, make sure to offer comparative sizing to make it as easy as possible for customers to find the sizes they’re familiar with.
Additionally, consider implementing a proactive outreach and engagement strategy. Using a CDP-powered clienteling tool, your sales and service associates can identify high-value shoppers on any channel and engage them to streamline the customer experience and deter sales that would ultimately result in a return.
On the other hand, if poor product quality or price point are the most common reasons for returns, then you may need to address product defects or rework your pricing strategy.
The #1 tool for engaging fashion and apparel customers online
For today’s fashion brands and retailers, ecommerce success depends on unified data, customer-centric operations, insight-driven strategies, and personalized omnichannel engagement.
With one of the simplest set-up, onboarding, and integration processes in the industry, Lexer’s CDP will effortlessly combine, cleanse, standardize, and enrich your data into a holistic single view of the customer. When every team has access to these enriched customer profiles, insights will guide your digital engagement strategies from prospecting to retention.
As the CDP of choice for leading apparel brands like THE ICONIC, John Varvatos, Spyder, and more, we’d love to answer any questions you have about customer analytics, CDP use-cases, ecommerce excellence.
Interested in winning the apparel market with CDP-powered digital engagement strategies? Use the calendar link below to book a meeting with one of our ecommerce experts.