Offline vs. Online Media in Fashion Retail: When Does Offline Win?
June 19, 2023 | Juha Nuutinen, Carmen Bozga
In today's fast-paced digital world, online media has become an essential part of any fashion retailer's marketing strategy. From social media ads to email marketing, online media offers a range of cost-effective and highly targeted advertising options. However, offline media, such as television and print ads, still has its place in the world of fashion retail.
There has been a long-standing debate among fashion retailers about which type of media is more effective for marketing campaigns: offline or online. Some fashion retailers find that offline media, such as television and print, works better for them, while others swear by online media, such as social media and search ads, other favor offline media. It's important to note that there is no universal answer to this question, as both types of media have their advantages and limitations, and their effectiveness depends on various factors such as the target audience, advertising budget, and the product or service being promoted.
Based on the performance of the media they use, we can categorize fashion retailers into two groups: those who have better performing online media and those who have better performing offline media.
When does online media steal the fashion spotlight?
Fashion retailers who find their online media to perform better than offline media typically have certain characteristics such as:
- High Share of Sales in E-commerce or Pure-Play E-commerce: Online media is particularly effective for fashion retailers with a high percentage of sales through their e-commerce or pure-play e-commerce channels. Since these channels typically have a narrower focus and a more specific audience, online media provides a cost-effective and precise way to reach those customers.
- High share of global brands in assortment (or well known brands with an established name) can make online media more effective for fashion retailers as online channels can rapidly reach the audience for these brands. For example, social media platforms, in particular, can be highly effective for promoting global brands through influencer partnerships and targeted ads.
- Highly Specialized Niche Customer Segment: For fashion retailers with a specialized niche customer segment, online media can be more effective than offline media. Online channels offer precise targeting capabilities that allow retailers to reach specific audiences based on demographics, interests, and behaviors. This can be particularly effective for reaching niche customer segments that may be more difficult to reach through offline media.
- Heavy Investment in Tactical and Performance Marketing: Fashion retailers that invest heavily in tactical and performance marketing, such as search ads and social media ads, can benefit from the precise targeting and real-time feedback offered by online media. By tracking conversions and adjusting their campaigns in real-time, these retailers can optimize their advertising spend and maximize their ROI.
- Low marketing investment level: Fashion retailers with a low investment level in marketing may find that online media is more effective than offline media. This is due to the fact that online media has a much steeper response curve compared to offline media. With a small dose online media channels can be highly effective, but the marginal ROI of the last euro or dollar invested is diminishing quickly when investment levels grow close to the saturation point. Often it is beneficial even for the pure-play e-commerce retailers to start with TV, radio and out-of-home after saturating their digital channels and looking for new sources of growth.
When does Offline Media Reigns in Fashion Retail?
Fashion retailers who find that offline media performs better than online media typically have different characteristics compared to those who prefer online media. Here are some traits of fashion retailers who see better results with offline media:
- Extensive Store Network and High Sales in Physical Stores: Fashion retailers with a large brick-and-mortar presence may see better results with offline media as it can drive foot traffic to physical stores and increase brand awareness among local customers.
- Own their Brands and have Private Labels: For fashion retailers who have mostly their own brands and private label products, offline media can be a powerful tool to create brand awareness and establish their products as credible alternatives to global brands.
- High Scale and Purchasing Power: Fashion retailers with high scale and purchasing power can negotiate better prices with publishers and media houses, making offline media more cost-effective for them. When we refer to "high scale" in the context of fashion retail, we are referring to retailers that have a significant level of sales. Sales per capita is a common benchmark used to determine the scale of a fashion retailer. This metric measures the amount of revenue a retailer generates per customer or per population. For example, if a fashion retailer has $10 million in revenue and a customer base of 100,000 people, the sales per capita would be $100. This metric can be used to compare the scale of different retailers, and it can help determine whether a fashion retailer is large enough to invest in offline media. Fashion retailers with high sales per capita may find that offline media is more effective for them, as they have a larger customer base and a higher potential return on investment. In contrast, retailers with lower sales per capita may find that online media is more cost-effective, as it offers precise targeting capabilities and can be more budget-friendly for smaller businesses.
- Large Audience and Potential Customer Segment: Fashion retailers with a wide target market or a diverse product range may find that television advertising is a more effective way to reach a large audience. This can include retailers that sell clothing and accessories for men, women, and children, as well as retailers with a variety of product categories such as shoes, handbags, and jewelry.
- Higher Share of Awareness and Brand-Building Campaigns: Television advertising can help fashion retailers create brand awareness, showcase their products, and convey a particular message to a wider audience. Additionally, television advertising can be more effective than other forms of advertising in terms of building brand image and brand equity.
If you're a fashion retailer looking to expand your marketing efforts to offline media, you may be wondering if it's the right move for your business.
- Do you have a large number of physical stores?
- Do you sell mostly own brands and private label products?
- Do you have a wide target market?
- Do you have a high level of sales per capita?
- Do you have a strong brand identity that you want to promote?
If you answered yes to most of these questions, offline media could be an effective marketing strategy for your fashion retail business.
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