How online fashion retailers respond to delivery problems
Status: 12.01.2022 12:44 p.m.
The online mail order business is one of the big beneficiaries of the pandemic. But there, too, the consequences of disrupted supply chains can be felt. How are the fashion retailers reacting to this?
Bibiana Barth, ARD stock exchange studio
In the shop you can see it when the trendy sneaker is not there or when entire parts of the winter collection are missing. And the situation is only slowly recovering. “We are still seeing delivery bottlenecks in the shoe industry,” says Manfred Junkert, General Manager of the Federal Association of the Shoe and Leather Goods Industry. “This applies to all areas from leather and textiles to yarn and cardboard. Here in particular, due to the lack of paper, we have noticed that there are problems.”
These problems also affect online retail. Only this can better hide them and, above all, control them – because the “longtail” principle applies, as Jörg Funder says, Professor of Commerce and Digital Transformation at the University of Applied Sciences in Worms: “That means that the last piece of goods is still available to customers thinks it just has to be put online. Therefore, online retailers have the broader ranges, and therefore it only seems as if online retailers are not threatened by delivery bottlenecks. “
Data and logistics help
In addition, online retailers have a great treasure: customer data. Thanks to data-driven systems, demand can be forecast even more precisely, explains Frank Düssler, from the Federal Association of E-Commerce and Mail Order. “The first option is to stock up on goods that are very sensitive in good time – before everyone else does.” In surveys on the last Christmas business, the member companies of the association stated that they often went this way. “A lot of people have told us that they are currently investing a lot in logistics and are also employing logistics staff so that they can cope with the whole chaos.”
In addition, online trading can influence customer flows. In the end, delivery bottlenecks are nothing more than supply and demand shocks on the market, according to the e-commerce expert, to which online retailing reacts accordingly and which it controls. Online retailers then try to avoid certain peaks in demand or to moderate them.
Some products are harder to find
“That can happen by shutting down certain promotions or discounts,” says Düssler. “But that can also mean that it is made more difficult for the customer to find certain products that are currently not in stock or that customers are shown less advertising on the Internet.”
In general, online trading is one of the biggest beneficiaries of the pandemic. This can also be seen in the figures from the German online fashion retailer About You. He was able to increase his sales in the third quarter by 48 percent to 512.5 million euros. However, the company wants to grow further: About You is expanding into other countries and is investing a lot of money in marketing. The bottom line is therefore only a minus – before interest, taxes and depreciation, the company writes losses of 30 million euros.
Struggle for market share
Strategically, however, the investments are right, according to trade expert Funder. “About You is not just a retailer, but also a platform in which other companies can participate. Therefore, in these times it is quite wise to also do customer acquisition in order to get more traffic to the website,” he says. “It makes perfect sense to act countercyclically in times of crisis and exploit the weakness of market participants and gain market share here.”
The company has been on the stock exchange since June; the majority of the shares are owned by the Hamburg mail order company Otto. Compared with its issue price of 23 euros, the share has lost more than a fifth since then.
Delivery bottlenecks in fashion – and how retailers deal with them
Bibiana Barth, ARD Börsenstudio, January 11, 2022 4:10 p.m.