‘Buy-now’ Culture: Where the market is heading or an attempt by brands to stay relevant?

Emily Dorotheou in Advertising

in Advertising

In 2014 Twitter took its first step into e-commerce with the announcement of a ‘buy now’ button. The concept was simple – the tool would allow users to store their bank details on Twitter’s secure internal system so that when they come across a tweet featuring a product that they like – for example Burberry’s new shade of eyeshadow – they simply touch the button and said product wings its way to their billing address.

Twitter is not the only business to trying and adapting in order to meet ever increasing consumer demands; Google is also looking to create a ‘buy now’ button for mobiles, which will begin appearing next to products featuring in Google Shopping Campaigns (currently still being tested before its release to the US, and then the UK.). It will afford users the opportunity to purchase items without having to leave Google Shopping (and so maintaining data traffic). Pinterest have also ventured into e-commerce in the USA, by partnering with stores including Macy’s and Nordstorm, to allow users to purchase items directly from the website.

Fashion houses are also taking notice, with brands such as Burberry, Tom Ford and Vetements all announcing their intention to align their runway and retail calendars, so offering consumers instant gratification.

For those unaware of what this entails, moving forward the brands will no longer exhibit separately at both men’s and women’s fashion weeks, and will instead present both collections at once, twice a year (once in February, once in September). Far more significant than this consolidation of catwalk efforts, however, is the news that every item seen in these shows will go on sale immediately afterwards online and in-store, effectively ending the decades-old practice of exhibiting collections roughly six months before they go on sale to the public.

The focus on the ‘buy now’ culture seems to be based on meeting the demands of consumers; namely a desire to shop “on their time and on their terms.” as noted by Roseanne Morrison, fashion director for trend intelligence firm Doneger Group. Thus, whilst the concept of a ‘buy now’ button is different to the ‘buy now’ culture that has set the fashion industry abuzz, they are part of the same shift in consumer philosophy.

Advantages

From a consumer perspective, the introduction of a ‘buy now’ button would allow individuals to purchase a product in as few clicks as possible, without the need of having to navigate away from Google or Twitter. This will speed up the process of completing a transaction, especially for individuals using mobile devices.

Nathan Hubbard, Twitter’s Head of Commerce recently commented on the demand for this form of social commerce, noting that more than 50 million tweets a month say “I want” or “I need” something, whilst over 100 million people follow a brand on Twitter. Thus it seems only logical to provide people with the opportunity to actually purchase an item they may want.

More than 50 million tweets a month say “I want” or “I need” something, whilst over 100 million people follow a brand on Twitter.

Google Shopping, meanwhile, allows for product prices to be compared at-a-glance, which is especially useful if prices are competitive. This is where the ‘Buy now’ button will be used to good effect; users will be able to simply identify the website selling their coveted item at the cheapest price and purchase pretty much instantaneously.

For the fashion industry, the decision to sell clothing almost straight off the runway appears to make complete sense. Why should a brand spend millions orchestrating elaborate runway shows and drumming up PR support around a collection, only to let it simmer away and die over half a year later, while the clothes trickle into stores? Even Kanye West thinks it makes sense, recently tweeting “I just thought of the craziest idea of all, I’m going to sell winter coats in the winter!!!”

Business of Fashion dubbed the recent announcement to adapt to the ‘buy-now’ culture, as potentially “the move the industry has been waiting for,” while WWD called it “the snowflake that begins an avalanche of change.” The broad consensus among pundits seems to be overwhelmingly positive, with Diane von Furstenberg, chairman of the CFDA, telling The Guardian:

“everyone seems to feel that the shows being consumer-driven is a very good idea.”

In principle therefore, the move to a ‘buy-now’ system is a good thing, as it shows companies reacting to consumer demands for quicker and easier ways to purchase things. However whilst there are some obvious positives to focusing on the consumer, and their demands, it could have drastic consequences for some of the smaller brands and companies.

Disadvantages

Firstly, the introduction of a ‘buy-now’ button would allow users to bypass a retailer’s platform, thus missing out on the entire brand experience. In doing so, the user has no engagement with the business and consequently the business itself misses out on the opportunity to cross-promote products and push up-sell opportunities. Although order fulfillment and confirmation emails, etc., will be carried out by the retailer, it could still damage brand engagement.

Brand loyalty will also be hugely affected; by shopping through websites such as Google, and Twitter, users are unlikely to show any allegiance to a particular retailer – they’ll simply choose the cheapest price.

By shopping through websites such as Google, and Twitter, users are unlikely to show any allegiance to a particular retailer.

It also places greater pressure on how a company advertises on websites such as Twitter, Google and Pinterest, as smaller brands may not be able to afford the premium advertising space required to compete with some of the larger companies. This would naturally raise fears of going bust, due to an inability to gain traction in the market. Companies may also have to consider remarketing, using campaigns which are focused around browsing and purchase history. These are likely to come with significant costs, putting smaller companies at a disadvantage.

Google is said to be planning on passing along customer information, such as email addresses, to retailers; however if Google chooses to withhold customers’ payment information, this could cause issues for retailers trying to gain that all important ‘complete view’ of customers. Ultimately this may reduce the number of companies who choose to enter the market due to a fear that a lack of funding and an unknown client base will lead to an inability to compete with some of the larger companies.

A similar concern has been voiced in the fashion industry; currently the fashion industry operates on a system of six-month delay, as it allows designers to exhibit their collections to a room full of buyers, who then place advance orders for the items they wish to sell in their stores. This gives designers a solid idea of how much stock they then need to produce to meet demand, and means they have a guaranteed sum of money from those initial orders.

By removing the period of time between public presentation and sale date, Burberry and others are placing far more emphasis on an inventory-type retail model — one in which brands produce large quantities of their wares upfront, in anticipation of consumer demand. This model is far riskier, as it involves a large capital outlay at the start of each season with no guarantee on the return to cover those costs. That isn’t such a big deal for Burberry — a company worth some $7.5 billion, with a guaranteed sales presence right across the world — but the same can’t be said for younger, smaller labels trying to get their foot on the ladder. For them, one bad season could spell financial disaster.

While Burberry has stated that it will be offering buyers a low-key, advance preview of its collections before its runway presentations (allowing them to place orders in something approaching the traditional format), the extent of who will be invited to these previews still remains unclear. This raises questions over whether certain retailers will be given preferential treatment over others, thus gaining a competitive edge via early access to the brand’s latest product. This would again have a knock-on effect on a retailer’s marketing campaign and pricing strategy, whilst they try to remain competitive.

An alternative view is that, the fewer third party retailers stocking a collection when it releases to the public, the more people are driven to purchase direct from the brand themselves. It is quite easy to see how a company could leverage that position to benefit a select few, and themselves. Either way, it is likely we will see a small number of companies prosper; whilst many struggle should such an environment become the norm.

Conclusion

Impatience has become a way of life for consumers, and the effect it is having on the market is undeniable. As companies, such as Twitter and Google, continue to adopt and create new technology in order to remain ahead of the competition, and meet ever growing customer demands, we are seeing some of the larger brands in the fashion industry adopt a similar approach in order to remain relevant.

The effect of these moves is an ever growing fear for smaller companies and brands that may not be able to compete, should such an environment become the norm. Thus whilst the ‘buy now’ culture could lead to some interesting and stimulating changes, we must remain aware of the risk of immediacy, despite the demands of the consumer. Consumers and retailers would do well to keep in mind the words, written nearly a century ago, of French author Henry de Montherlant: “The day will come when, given the banality of speed and the ease of its one-upmanship, slowness will appear as the most natural way to express a certain delicacy.”

 

‘Buy-now’ Culture: Where the market is heading or an attempt by brands to stay relevant? was last modified: April 22nd, 2016 by Emily Dorotheou