"Two years' work, five offices overseas, 350 staff. All these people trusted me and now I have failed them. What have I done? How could things have gone so wrong?" writes Ernst Malmsten, one of boo.com's three founders, in Boo hoo: a dot.com story from concept to catastrophe, his account of the soaring highs and plummeting lows that led to online fashion retailer boo's demise.
Perhaps rather tragically, Boo.com was experiencing steady growth in sales - $500,000 (£274,000) in its final two weeks - yet this wasn't enough to stop it being overwhelmed by a catalogue of errors, which included technological incompatibilities, overambitious global expansion, over-inflated visitor expectations and a loose approach to company spending.
In the immediate aftermath of the dotcom bust, prospects for e-commerce were bleak, but particularly so for clothing. Yet, clothes sites appear to be back in fashion. According to Verdict Research, the online clothing market was worth £873 million in 2005, an increase of 24.5 per cent on the previous year. And it forecasts £2.27 billion by 2010.
Although women are prolific online shoppers, more men are buying clothes on the web, up from 30 per cent in 2003 to 40 per cent in 2005, according to Verdict.
Some of the biggest factors driving growth are also driving the e-commerce market as a whole: convenience, 24/7 shopping and high-speed web access.
Statistics from Nielsen//NetRatings found that, in December 2003, 72.3 per cent of the UK population had connection speeds of up to 128k. Now that figure is only 17.2 per cent, as two-thirds enjoy 512k.
One unique driver behind the clothing market is the opportunity to buy items that are hard to find on the high street. This might be the reason why, in a recent survey by Verdict, eBay was the retailer most shoppers visit to buy clothing and footwear. "EBay offers the opportunity to capture one-off pieces of clothing from all over the world," says Harsha Wickremasinghe, retail analyst at Verdict Research.
Azita Qadri, small business manager at eBay and former manager of the clothing category, agrees this was initially why clothing sold well on the auction site. Since then, the category has grown at a tremendous rate.
"A piece of women's clothing sells every seven seconds on the UK site. People saw there was demand and started listing items they had worn once, as well as new clothes. Then young designers started using the site and small businesses wanting to sell excess stock," she adds. It hopes to boost sales with the launch of eBay Express, a new site where small firms can sell new items at fixed prices.
Certainly, the clothing market is seeing greater investment from online retailers as well as traditional outlets and mail-order providers. Next, the most popular online clothing retailer, saw a 13.7 per cent rise in sales in its Next Directory division (which includes online) in 2005, taking total revenue to £685m. It attributed a significant proportion of this increase to growth in online purchases. ASOS, an online retailer targeting celebrity and fashion-conscious buyers, saw group revenue increase by 39 per cent this year to reach £18.8m.
Meanwhile, several latecomers have launched new stores online, such as luxury brands Marni, Louis Vuitton and Kurt Geiger. The latter has already reported that sales from its site, which launched last October, are double its expectations.
But, despite encouraging growth, Susanne Goller, director of the retail and leisure division at research agency Ipsos-MORI, says most fashion retailers' web services haven't worked as well as hoped. "Part of the reason is that fashion customers, who are primarily female, like the social aspect of shopping," she explains. "Online clothing retailers do not give the same experience. Often, clothes are presented in a boring way, the pictures are small, the outfits incomplete and you cannot home in on the fabric, so you don't know what you're buying."
For this reason, many retailers that have had a web site for several years are redesigning, rebuilding and relaunching them. The common goal is to make their service more compelling and entice consumers to spend more.
Revamped sites such as Adams.co.uk, have brought more stock online, so visitors can buy items that are unavailable in their local store. "We convinced Adams to bring about 600 different product lines online to make it quite a large category," says Oliver Schonrock, CEO at e-commerce agency Real TSP, which developed the Adams Kids site.
When Topshop.com (see box, p60) relaunches soon, it will feature every clothing line, with a few concessions. "It will be representative of our Oxford Circus flagship store," says TopShop brand director Jane Shepherdson.
Clothing web sites are also becoming more sophisticated, as retailers try to replicate the offline experience. "A whole profession has been built around shop window dressing and that hasn't been for nothing," says Goller. "But, with today's technologies there's no reason why you cannot make web sites interesting."
Sites such as Marksandspencer.com and Adams.co.uk, for example, make greater use of photography and professional styling. "Marks & Spencer used to feature mannequins wearing its clothes, but we've changed this to include real people and close-up pictures of garments," says Laurent Ezekiel, client services director at M&S' agency, Wheel, whose other clients include Laura Ashley and Ted Baker.
Designer retailer Net-a-Porter manages its photography in-house. "Our aim is to get the consumer as close to the product as possible," explains head of marketing Martin Bartle, who previously worked at boo, thinks the concept offered by Net-a-Porter, which combines editorial with retail, has helped it to double turnover since launch; last year it generated £21.5m. "A high-fashion customer is looking for advice," he says. "If you're spending up to £800 on a handbag, you'll want to know why it's the 'it' bag of the moment."
A more personalised shopping experience is a key trend in the sector, as retailers try to engender loyalty among shoppers. At present, Net-a-Porter customers can email the site and seek advice on a garment's fit.
"The next step might be to have online stylists guide you in what to wear, not just how to wear it," adds Bartle.
Indeed, many retailers seek to offer inspiration and advice to boost cross-selling. Net-a-Porter and Marks & Spencer's sites offer outfit suggestions when a visitor clicks on an item of clothing. "The next step will be for sites to suggest products based on customer order histories and registered preferences, such as designers or styles," says Neil McCarthy, commercial director at e-commerce agency Tamar.
H&M has tried to overcome the problem of not being able to try clothes on by offering a virtual 'dressing room'. Users create a model based on their size and click on items to find out what size they need. Women's retailer New Look has tried something similar. But, such efforts are overshadowed by limited stock and the lack of an e-commerce engine at both sites.
While new technology is enabling retailers to offer a greater interactive experience, many are going back to basics. TopShop, for example, is eliminating Macromedia Flash from its site as it increases the time it takes to load pages. Accessibility is a big issue in online retail, where the focus tends to be on design. High-street retailer River Island was criticised this year for launching an entirely Flash-based site that is inaccessible to disabled users (Revolution, April, p15), and even the most popular sites still have issues with usability (see box, p58).
When mail-order provider Boden bought its site back in-house a few years ago, flexibility was a key requirement. "Our focus is on getting customers to the checkout quickly and helping them find what they want," says marketing director Mark Binnington. Boden's online arm has grown significantly and now generates 50 per cent of sales in the UK and 65 per cent in the US.
Such significant figures have caught the attention of many offline retailers.
Clarks, Crew Clothing, JJB Sports and Adams Kids are a few of the retailers to have built transactional sites. When Adams Kids conducted an e-commerce trial last year, it found customers spent double what they'd typically spend in-store. Director of product Jonathan Tillery says: "In the first year we expect to take as much as one of our largest stores."
Despite being quick to bring grocery shopping online, the big supermarkets have been slow with clothing. Keith Chamarette, project director at digital agency WARL Evolution, which works with Tesco's clothing division, says: "With the grocery model, someone goes round the store and puts the goods in a basket. But, the clothing department has such a high turnover of stock that it isn't mapped in the same way," he says. "We need to examine whether Tesco needs to move to a distribution-centre model, which is how a lot of non-food items are picked."
But, Tesco can claim a head start on its competitors, having conducted an e-commerce pilot for some of its 'back to school' range in the summer.
Sean Murray, head of marketing for clothing marketing at Tesco, says a fully transactional site is likely to follow in the next 12 months. "Over half the feedback we receive via email asks when they can buy online," he says.
Tesco's caution highlights retailers' fears of getting it wrong online.
"The industry is still young and there's loads of room for improvement in areas like delivery and returns," says James Roper, chief executive of the Interactive Media in Retail Group. But, as a lot of retailers have demonstrated, when you get it right online, the results speak for themselves in increased sales and customer loyalty, and it would be foolish for any fashion retailer to ignore this channel.
SECTOR AT A GLANCE
Shopping-comparison site Kelkoo has reported an increase of more than 50 per cent in traffic to the fashion category over the last year.
According to Forrester Research, 16 per cent of European consumers bought clothes online in 2005, equivalent to 39 million Europeans. By 2009, Forrester predicts this will rise to 73 million.
The most visited clothing sites in June 2006 were:
3. La Redoute
4. Additions Direct
7. River Island
8. M and M Direct
9. Freemans of London
Revolution asked Nomensa to examine the usability of the three most-visited clothing and accessories web sites - Next, ASOS and La Redoute - and identify any usability issues.
All three sites open new windows when viewing items and that can be frustrating;
There were terminology issues. Using a foreign language on a co.uk site could be confusing for some customers as they might not understand the language.
Looking at the aesthetic, it found cluttered pages with inconsistently placed navigation or product navigation and images that had been reduced to fit.
TOP SHOP IS REVAMPING SITE TO INSPIRE ONLINE SHOPPERS
Visitors to TopShop's soon-to-relaunch web site will discover a new 'styleblog', inspirational features on the home page showcasing particular items, such as 'five ways to wear white skinny jeans', and slick-styled product photos, instead of Flash images.
More interactive elements, like the styleblog, podcast and RSS feed, point to TopShop's aim to inspire and advise visitors.
"The idea is that you'll get a sense of TopShop as a living, breathing brand with a voice and personality," says Tom Hostler, partner at Poke London, which revamped it.
The extended product ranges reveal ambitions to increase sales online.
"Web sales are significant at the moment and equate to the size of our second-biggest store," says Jane Shepherdson, brand director at TopShop.
"But, we see this as our single-biggest opportunity, especially as we hope to sell online to overseas markets in the autumn. It could be bigger than our retail arm in 10 years."