In the webinar Accelerating data-driven brand strategies, Andreas Andrup, SVP Advertising at Zalando and Michele Pilati, Head of Digital Transformation at Karl Lagerfeld, discuss about their main projects in 2021 and explore the biggest digital opportunities and strategies that best served customers during the pandemic.

In the light of the challenges faced in the last period, brands responded to store closures and changing customer behaviour with a shift to online and a new focus on customer data. Data from U.S. Census Bureau indicate a growth of e-commerce over total retail sales from 0.6% in the fourth quarter of 1999 to 16.1% in the second quarter of 2020.

This trend, confirmed in the following years of the pandemic, is indicative of a larger global shift to shopping online. And it leads to several questions: how are brands responding to higher customer expectations of online experiences? How are these experiences affecting customer loyalty and retention? And above all, how can brands best use data to inform personalised marketing strategies without being bogged down by that amount of information?

Digitalization is here to stay.

The Brand Partner Study, published by Zalando, shows how the next years will look like for e-commerce. About 95% of respondents expect a highly accelerated rate of digitalization, and see the future of online retail as platform-driven, seamlessly connected with offline. Digital sales are expected to soon overtake offline, and brands are reinforcing their own ecommerce.

In such a fast-paced digital landscape, it’s easy to understand that data and insights are key to pivoting strategies. This leads to a shift from data collection to data interpretation, meaning brands need to learn how to translate insights into actionable strategies.

And obvious push in this direction came from the pandemic:

“It didn’t change so much the trajectory but it accelerated it a lot so for sure we had a lot of adaptation to do in terms of how the logistics was run during lockdown and in terms of the the onboarding of new customers, by deepening customer relationships […] and this is the real effect we’ve been able to see” – Andreas Andrup, SVP Advertising at Zalando

“Digital is not new for Karl Lagerfeld. In 2012 Karl Lagerfeld brand launched exclusively online with and weeks later on so digital has always been key to a collaborative strategy and it’s still a central part of the brand DNA. Of course the pandemic has created conditions that accelerated processes that were planned to only happen in the future.

So let’s say the digital became the natural solution to engage and to serve our consumers, which today it means to connect with them where it really matters, reading through their needs and being capable to really provide what they’re looking for whether it is a product or content or simply an experience with the brand” – Michele Pilati, Head of Digital Transformation at Karl Lagerfeld

How did the Pandemic affect Consumer behaviour?

With people spending more time online, has that influenced the way that they discover new brands? Absolutely. Interestingly enough, e-commerce growth during the pandemic is not only due to improved retention metrics of the previous customer base, but to new customer onboarding, in particular amongst segments of the population older or much younger than the usual shopper, and in general people that were less prone to e-commerce so far.

Also engagement has gone up:

“We see that people are increasingly using commerce platforms to inform themselves and to also to some degree kill time during the lockdown and this has led to browsing and discovery consumption to go up, so we see lot more broader interaction with the the assortment than before” – Andreas Andrup, SVP Advertising at Zalando

The pandemic has brought a very special emotional state for customers, and the way that brands connect with the customer has changed. Showing empathy, creating authentic connections, is something that has been growing in relevance and has highlighted again the need for brands to be very clear in terms of who they are and what kind of role they want to play in people’s lives in a broader sense.

“As a brand we decided to go straight forward with our social channels launching something personal: “Stay at home with Karl” campaign but then in parallel we worked hard to optimize the digital experience across all the channels to ensure that we could really meet consumers expectations in such a critical moment”– Michele Pilati, Head of Digital Transformation at Karl Lagerfeld.

Leveraging data to create personalised shopping experiences

Closing the gap between the offline and online experience has been the challenge for many brands, and you need data to get the necessary insights to really connect with customers. 

You need to understand exactly who you are talking to, how they interact with the brand, how to engage with them, and make the online experience feel as high touch as it might feel if a customer walks into a store.

This democratisation of data is not only limited to acquisition channels, but goes deeper along the whole purchase funnel. From the hyper-targeted piece of content, down to personalised onboarding flows and discounts, up to pre-filtered catalogues. The siloes between branding and performance that we are used to in an offline world is somewhat crumbling.

And when we talk about data used across the whole funnel, a big game-changer are the recent developments of sizing solutions for apparel, up until some years ago limited to larger luxury brands and now more and more common and affordable also for smaller brands. A try-on, which until a few years ago could only be done in a mortar-and-brick store, can nowadays be done in the comfort of one’s home, thanks to the latest development of AI and VR.

Data is the keys to stay close to your online customer, and offer them a more humanlike experience, and leveraging data to create personalized shopping experiences has become paramount in the pandemic years. The successful brands will be the ones who understand that having a deep understanding of customer behaviour is the only way to get closer to them.

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