The problem with online shopping

The simple ease of being able to grab fashion bargains on the couch is becoming a worry for real-time retailers. Photo / Thinkstock

Have you bought a pretty frock, or maybe some designer boots, online recently? You may well be driving other New Zealanders out of business. But should you be feeling guilty about it, or celebrating the joys of internet shopping? Viva investigates.

For fashion followers who fantasise about footwear, it is the best of times, it is the worst of times. The announcement last week that one of the country's most delightful designer shoe emporiums was closing makes them feel - in the words of Charles Dickens, in his Tale of Two Cities - like they have nothing before them. Yet, hang on a minute, they also have everything before them.

And that's exactly the problem. As Jo Pearson, the owner of Mei Mei, a Ponsonby Rd store that's been selling select brands to Auckland's well-heeled for around 12 years, announced on the boutique's website: "Constant sales, and online shopping at discounted prices means few people are prepared to pay full price anymore. This has meant that the effort I am putting in is not paying off anymore."

Although they may not tell you so openly, those in Auckland's retail sector know exactly what she's talking about: customers come into their stores, they see something they like and they try it on. But then, rather than buying it from the local store, they head home to their computers. Then the dedicated follower of designer-fashion-at-a-discount will see if they can find it at a cheaper price, online.

It doesn't take a lot of imagination to understand that this process would be particularly easy when it comes to designer shoes. And though real-time retail suffers, online sales have been growing.

Surveys indicate that between January 2011 and January 2012, of the over 90 per cent of New Zealanders who went online, 63 per cent of them bought something. And, according to other research, around a third of those online purchases were made from overseas businesses.

In 2011, those online sales were thought to be worth around $2.68 billion and this is set to almost double by 2015.

And it seems that the fashion sector may be suffering more than many others. In a Sydney Morning Herald story from June last year Australian analysts suggested that, while "online sales now account for about 3.4 per cent of the entire Australian retail sector ... for clothing sales that figure is above 6 per cent".

Because of the similarities in geography, we may speculate that the New Zealand figure must be similar - if not actually even higher because we're even further away from covetable international brands than they are.

So, dear reader, are you feeling a little guilty yet about - ahem - driving New Zealand fashion retailers out of business? Clearly this consumerist's moral quandary bears further investigation.

"[Online fashion sales] are a problem," agrees Paul Blomfield, Auckland-based fashion public relations chap and chairman of Fashion Industry New Zealand, which represents industry interests from throughout the sector. "But they're also an opportunity. They're a double-edged sword," he argues.

Blomfield points out it is true that online fashion stores are doing a lot of damage to the kinds of fashion retailers who buy a selection of garments from a number of different manufacturers or designers; stores like Mei Mei for example. However, he adds, "if you're operating a vertical model - that is, you're making your own garments and selling them in your own stores, then it is an opportunity. While some retailers are under serious threat, on the other side of the coin we have other labels being inventive and flexible in their approach to this."

Blomfield points out the Stolen Girlfriend's Club and I Love Ugly labels as examples of this.

"With chain stores like Top Shop and Zara shipping to New Zealand, I think stores in a similar bracket in New Zealand have to work hard to stay competitive, in both price point and design," says designer James Dobson, the man behind the Jimmy D label.

Jimmy D has been selling online for longer than most here, having been involved with the New Zealand-based website, General Cucumber, since 2006; it was started by an enterprising friend of Dobson's who was fascinated by international sites like Net-A-Porter.

"The only way that New Zealand retailers that offer similar labels can compete is on service", Dobson agrees. "Both in store and online."

In this regard, Dobson says he and his colleagues stay active online, with constant feedback to customers. "We're very active on all platforms of social media which is a great way to keep in touch with our customers.

"If something arrives in store that I think a customer will like, and that will work with their existing purchases, I'll email them photos. We have to provide a level of personalised service that a huge company simply can't," he says.

At the other end of online retail is a label like Carlson; though they've had a website for several years now, they started retailing on it just over four months ago.

The Auckland-based designer sees the brand's new online experience as part of her business' service. She is well aware that designer name-conscious shoppers may be heading offshore, online, to buy European and US labels. But, as she says, "for us, retail sales are about building relationships. There's a connection, it's not just some faceless brand. It's also about having a product with integrity. It's tough but I'm committed to keeping production in New Zealand and although I believe price and fit are the overriding factors, with us, customers also know the providence of the product."

Zambesi is another label that has only started selling online relatively recently. Zambesi garments have been sold online for the past three seasons and mainly, it's an aid to customers who are not always near one of the label's stores. But it is also another way of communicating with customers, Zambesi's menswear designer, Dayne Johnston, explains.

"It presents the collection in a very clear, concise way," he points out. And Johnston also thinks New Zealand labels need to work particularly hard to innovate in this realm. "I had a friend purchase something from Mr Porter [the masculine equivalent of Net-A-porter] recently. And he couldn't stop raving about the packaging and how amazing it was. Presentation is key," Johnston concludes, "and vital to the experience of shopping, both online and within a store."

This is where online brands who offer things like free shipping, free returns (if the garment doesn't fit) and personal, online advice about styling make advances.

Okay, so now back to you, and that all-important question about online fashion retail sales and what effect they're having on your good, social conscience.

Perhaps, as in all things, it's about finding a balance. It is true that New Zealanders can tend to get a little too excited about overseas labels sometimes. Blame it on our isolation. But a lot of those labels, particularly those from less upmarket brands, are not even nearly as well made or innovative as some made right here in New Zealand.

As Dobson points out: "As a designer, my only plea is that people start to look at which labels are still produced locally and realise that it does cost more to produce here. We're on a knife-edge here and soon we won't have the opportunity to manufacture locally. I'm not into the idea of restrictions being put in place to control how people shop," he argues, "but I do think people need to temper their desire for fast fashion with locally produced, design-led clothing."

But of course, it's also true that shoppers have the right to seek out the best bargains. Not to mention, access cool stuff you can't even get in New Zealand.

Of course that is going to hurt some local retailers, who will either begin playing a cleverer game, upping their service quality or getting out of the trade.

Additionally, as one fashion insider, who preferred to stay anonymous, put it, some local labels have been a bit late: "Younger and more emerging labels are obviously more at ease with the notion [of online sales]. But I think that's just generational more than anything else."

Analysts suggest there's a "saturation point" with online retailing - they believe that once around 15 per cent of all retail sales are online, things will smooth out. However, when he was interviewed for a business story earlier this year, the chief executive of the New Zealand Retailers Association wasn't so sure. Instead John Albertson advocated what's known as "multi-channel" selling - that is, working both your real store and your web store in every way you can.

"We will have a lot less stores," Blomfield concurs. "But hopefully those that remain will be showcases of excellence in fashion that really show off their brands."

"I think we will end up with a store that acts more like a flagship for the brand, that's a kind of branding exercise," Carlson predicts. "I think that's going to be predominantly about people coming in, trying things on and then buying in the comfort of their homes."

"I feel there will always be customers who want to shop in a store," Johnston adds. "Our customers like the tactile aspect of shopping, being able to touch the fabrics, trying things on to see how a garment fits on the body. All that is missing when you buy online. So I think there will always be a demand for boutique shopping - it's just that personal service will get even stronger."

Dobson agrees: "It's just not realistic to operate a label or a boutique in the same way you did five or 10 years ago," he concludes. "But that change doesn't have to be a bad thing. Having more options is a good thing. It's just our job to make sure we're the best option."