The shift from brick and mortar store to online store was shift and sudden. The new online e-commerce environment provided consumers with endless possibilities especially for the clothing industry. With a total amount of US $332.1 billion in 2016 this industry accounted for 28% of the total eCommerce market. Additionally the industry is expected to grow at an average annual growth rate of 13.8% (Bohnhoff 2016).
Despite this increase in online sales and ecommerce there are still consumers that are hesitant to order online. The biggest part of this hesitation is the distrust in technology and the supply chain involved, but next to that little is known about online “innovators” and “early adopters” (Goldsmith and Goldsmith 2002). Enter the Cloakroom, a Dutch start-up determined to change the scene!
What is the Cloakroom?
Launched in a small apartment in Amsterdam the cloakroom is dedicated to bringing curated shopping to the public. With a simple vision: “We believe that every man deservers the luxury of having his own personal shopper”, founders Asbjørn Jorgensen & Kasper Petersen set out to become market leader in their own curated shopping niche.
How does it work?
Instead of focussing on the logistic parts and providing customers with an extensive amount of choices, the cloakroom focusses on the consumer and provides him with the personal shopping advice necessary. Customers apply through the website and fill in an online survey regarding preferences, these preferences lead to a profile which in the next step is discussed during a phone consultation. Based on the customer information and extensive knowledge of personal shoppers the customers receive 10 to 15 pieces of apparel. This apparel is send for free and can also be returned without any costs, this provides those customers warry about online purchases with an extra certainty. After a customer has ordered a box, picked out his favourites, and returned the leftovers, he is provided with the opportunity to provide feedback to his personal shopper. This feedback is hence forward used to alter the customer profile and future apparel choices (The Cloakroom n.d.).
The Customer-Centric Cloakroom
What makes the Cloakroom customer centric is their intricate knowledge of their customers, before being send a clothing box customers are thoroughly analysed through surveys, phone interviews and store visits. This allows the Cloakroom, and its personal shoppers, to identify and provide the customer with their preferred product. The personal approach whereby the customer can get in touch with his personal shopper through both online, Facebook and WhatsApp, and offline, phone and store visits, allows for the building of customer trust. Trust which is deemed crucial for the growth and success of mobile commerce (Siau and Shen 2003). Additionally, the Cloakroom is able to take returns, a major pain point in eCommerce, and turn it into an opportunity. First of all it allows them to gain a better understanding of their customer, and secondly customers who have had good return experiences will spend significantly more on return trips than other customers (Rivero and Zhu 2016).
Apart from providing customers with the experience that suits their needs, The Cloakroom also leads to joint profitability in the ecommerce sector. The company absorbs part of the risk traditional ecommerce companies have with regards to returns, additionally it provides consumers with a hassle free shopping experience and excellent service. Part of this risk absorption is possible due to the customer centric approach of the Cloakroom providing them with information about their customers traditional ecommerce companies do not have.
Since the founding of the Cloakroom many traditional ecommerce and clothing companies have started their own ventures (Zalon from Zalando, The Box Office from Suitsupply etc.) This is to show that the model employed by Cloakroom is a promising new model. A business model that is customer focused, allows for quick adaptations and feedback, and provides join profitability.
Bohnhoff, T. (2016). E-Commerce: Fashion. [PDF] Hamburg: Statista. Available at: https://statcdn.com/pdf/ca_study_readsample/DMO_sample_38340.pdf [Accessed 10 Mar. 2018].
Goldsmith, R. E., & Goldsmith, E. B. (2002). Buying apparel over the Internet. Journal of Product & Brand Management, 11(2), 89-102.
Siau, K., & Shen, Z. (2003). Building customer trust in mobile commerce. Communications of the ACM, 46(4), 91-94.
Rivero, P. and Zhu, Z. (2016). Online Clothes Shopping An Industry Landscape Study Focusing on Returns. [PDF] California: Sutardja Center. Available at: http://scet.berkeley.edu/wp-content/uploads/zhuzihan_late_4894259_68726594_IEOR-290-final-report-1.pdf [Accessed 10 Mar. 2018].