Fashion sector sees eCommerce as best way to combat recession
The Prologic Report 'Technology in Fashion' presents new market research into the challenges and issues faced by the UK fashion industry. Prologic the specialist provider of software, services and consultancy to the fashion & lifestyle sector, reveals that there is significantly more optimism and hope for the future than last year when the recession was just beginning to bite, with eCommerce in fashion the top priority.
Produced in partnership with Oracle and carried out by retail industry market research specialist Martec, The Prologic Report - 'Technology in Fashion' - is an annual report that focuses on the challenges and issues faced by the UK fashion retail sector whilst also providing a crucial insight into strategies for surviving and prospering in the current economic climate. It also examines investment priorities for IT budgets and satisfaction with current systems.
Executive Summary of Technology in Fashion Prologic Report
• This UK technology in fashion industry survey covers companies with total sales of pounds Sterling 5.2 billion and a total of 9,030 stores, representing 18% of the UK fashion industry.
• 63% said their top priority this year is investment in eCommerce in fashion, followed by an increase in wholesaling (58%).
• 55% of companies predicted their sales would increase next year, with 33% predicting they would remain the same, and only 12% predicting a decrease.
• This year companies are reporting their IT spend is averaging 2.3% of sales, compared to 1.8% last year.
• Website sales represent a significant proportion of total sales for most fashion industry companies at 6.3% of total sales.
• The majority of companies have websites that are in profit (68%) and half say they achieve profitability within the first year of operation. However, this leaves a third that are still not trading profitably.
• Of those that are profitable, 68% say their website is more profitable than their stores.
• 67% of retailers are currently able to offer their customers the chance to return products bought online at the store.
• However, checking store stock levels from the website, a capability that consumers are particularly keen on, is currently offered by only 30% of companies.
The 'Technology in Fashion' research survey was conducted via telephone interview with leading figures across the fashion retail industry, from Managing Directors and Finance Directors to IT Directors. The results reflect the opinions of some 18% of the UK's clothing, footwear and accessories market.
Sam Jackson, Chief Executive of Prologic, comments, "It is encouraging to see that the mood is now more optimistic, and that the majority of retailers are predicting sales will increase. Whilst controlling costs is still very important, it looks like companies are now more forward looking and do not see cutting back as the primary way to stay profitable. Website sales now represent asignificant proportion of the total for many fashion companies, which is clearly why they now see investment in eCommerce in fashion as a top priority."