Masters E-commerce Literature Review Sample

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Critical Analysis of E-commerce in the Fashion Industry in Europe.

Literature Review

It has been observed that fashion worldwide keeps evolving, and numerous other factors connected to fashion brands and businesses find opportunities to acquire positive changes and move towards growth. With time, the ways the fashion industry in Europe also operates have changed. New preferences and strategies are developed to gain new customers, and one of those preferences is ‘E-commerce’ ( Torres, 2017).

According to Guadenzi, Mola, and Rossignol, 2021, new technologies are taking over the fashion industry. The markets keep shifting on both the economic and geographic levels, and new profitability trends are witnessed. All these revolutions have been observed in Europe’s fashion industry for the past few years, and e-commerce has played a vital role in it.

According to the statistics, the online fashion industry was not operating effectively by 2018 and only owned around $435 billion. However, by the end of 2024, this ratio is anticipated to grow to $953 billion, while by the end of 2021, this amount will touch $758 billion ( Macchion et al., 2017). Most operational sector within the e-commerce fashion industry of Europe, which led to substantial growth, targets the trade of apparel, accessories, and footwear.

These are expected to account for almost 32.8% of overall fashion e-commerce sales ( Cao, 2018). According to Bigon et al., 2019, when 2021 ends, online shopping is anticipated to amount to 22% of the entire fashion market in Europe and worldwide. On the other hand, the e-commerce penetration rate in the European fashion industry is expected to reach 50%.

Figure 1- Revenue in the European Fashion market, source: Bigon, L., Cassani, G., Greco, C., Lacasa, L., Pavoni, M., Polonioli, A., & Tagliabue, J. (2019). Prediction is very hard, especially about conversion. Predicting user purchases from clickstream data in fashion e-commerce. arXiv preprint arXiv:1907.00400.

E-marketplaces are a significant part of fashion internet retailing, comprising around 30% of it in Western Europe. Zalando is believed to be the very first European e-commerce marketplace, with a share of 7.4%. Amazon is now gaining much popularity worldwide after providing efficient e-commerce services in Europe. Amazon is reaching $12 to $17 billion in sales in the US by 2017 ( Carter, 2021).

While critically assessing different e-commerce fashion companies and retailers, Turcan & Boujarzadeh, 2020 claimed that Amazon is now considered to have the broadest customer base reaching up to 340 million online buyers in Europe within 28 nations on five market place including Amazon.fr, Amazon.co.uk, Amazon.de, Amazon. It, and Amazon.es.

This e-commerce fashion marketplace provides one to two days of free shipping, which its customers followed up through a survey according to which fast delivery of the e-commerce fashion companies is the primary reason why they shop from them and prefer to buy online instead to go and shop from stores ( Yang, Song & Tong, 2017).

As per the study given by Guercino, Bernal & Prentice, 2018, most of the fashion brands that decided to run their online stores witnessed a rise in their sales and profitability in a short time, as they got to receive excellent product reviews, which made them grow in terms of providing efficient customer service.

According to Karac & Stabauer (2017), the rise of global internet penetration by 58% by 2021 will be due to advancements in technology and consumers’ trust, which they have in most of the fashion brands they have developed with time. Social media technologies are anticipated to aid fashion e-commerce organizations in promoting their services and products directly to consumers.

Critically, it has been said that due to the rapid and affordable access to the internet, the presence of social media platforms, online industry-centric forums, and magazines, as well as customer awareness about the products and services, have maximized e-commerce, particularly in the fashion industry of the European continent including accessories, clothes, shoes, and other fashion suitable. It has benefited the market quickly ( Seidel & Blanquart, 2020).

Figure 2- Penetration rate in the global fashion market. Source: Carter, S., 2021. UX and E-Commerce: Comparing the Best Practices in Europe, Asia, North America, South America, and Africa. In Handbook of Research on User Experience in Web 2.0 Technologies and Its Impact on Universities and Businesses (pp. 316-352). IGI Global.

According to Payakkapong & Yeolao, 2017, e-commerce in the fashion industry is the major trend in retail, which has been assuring solid and long-term growth in online sales visible for most of the products and across all regions in Europe. It is also suggested that compared to other industries, the fashion industry in Europe has already gained much experience in moderating e-commerce practices as this industry has witnessed the rise and fall of sales through online marketing and the development of online marketplaces ( Arnold, Cardenas & Sorensen, 2018).

Per the study given by Fouskas & Chatziharistou ( 2020), the e-commerce business for the fashion industry of Europe has already got a strong hand in the online market with a considerable size, as well as with solid growth rates which are likely to continue for the foreseeable future. However, on the other hand, it was reported that Europe had experienced lower penetration rates for e-commerce, an average of 5%. This refers to the fact that only 41% of the European population bought something through the e-commerce stores of fashion brands last year ( Patten et al., 2017).

Moreover, personalization is believed to be the most used trend and the primary reason behind the popularity of the e-commerce fashion industry across Europe. Personalization is the depiction of a user’s interest according to his/her product search history or interest. This trait is followed commonly to ensure that consumers buy the fashion products that interest them, which would eventually benefit the fashion brand (Fliaster & Sperber, 2020).

The e-commerce fashion industry of Europe is widely using the product recommendation trend, which has enhanced the visualization of products and increased customers’ interest even more. According to Kunesova & Eger, 2017, e-commerce has gained much hype and popularity after the pandemic covid19. It was suggested that the unexpected coronavirus outbreak is anticipated to support the growth of the online shopping market, specifically the fashion e-commerce market, in the coming months, and there will not be a way back, as the fashion industry will prefer e-commerce to date.

References:

Arnold, F., Cardenas, I., Sörensen, K. and Dewulf, W., 2018. Simulation of B2C e-commerce distribution in Antwerp using cargo bikes and delivery points. European transport research review, 10(1), pp.1-13.

Bigon, L., Cassani, G., Greco, C., Lacasa, L., Pavoni, M., Polonioli, A., & Tagliabue, J. (2019). Prediction is very hard, especially about conversion. Predicting user purchases from clickstream data in fashion e-commerce. arXiv preprint arXiv:1907.00400.

Carter, S. (2021). UX and E-Commerce: Comparing the Best Practices in Europe, Asia, North America, South America, and Africa. In Handbook of Research on User Experience in Web 2.0 Technologies and Its Impact on Universities and Businesses (pp. 316-352). IGI Global.

Cao, H. (2018). The growth of e-commerce and its impact on the fast fashion retailers.

Fouskas, K., & Chatziharistou, C. (2020). E-commerce Success Factors: A Taxonomy and Application in the Fashion Industry. In Strategic Innovative Marketing and Tourism (pp. 775-782). Springer, Cham.

Fliaster, A., & Sperber, S. (2020). Knowledge Acquisition for Innovation: Networks of Top Managers in the European Fashion Industry. European Management Review, 17(2), 467-483.

Gaudenzi, B., Mola, L., & Rossignoli, C. (2021). Hitting or missing the target: Resources and capabilities for alternative e-commerce pathways in the fashion industry. Industrial Marketing Management, 93, 124-136.

Karać, J., & Stabauer, M. (2017, July). Gamification in E-Commerce. In International Conference on HCI in Business, Government, and Organizations (pp. 41-54). Springer, Cham.

According to The Business Research Company’s research report on the fashion e-commerce market, the unprecedented coronavirus outbreak is expected to support the growth of the online shopping market in the forecast period.

Macchion, L., Moretto, A. M., Caniato, F., Caridi, M., Danese, P., & Vinelli, A. (2017). International e-commerce for fashion products: what is the relationship with performance?. International Journal of Retail & Distribution Management.

Patten, E., Heilbronn, D. H. B. W., & Ozuem, G. W. (2017). The notion of omni-channel retailing in the fashion industry. READINGS BOOK, 776.

Payakkapong, A., Yeolao, D., & Worawongpongsa, W. (2017). Sellers’ Behavior in E-commerce: SME Exporters in Thai Fashion Industry. The Journal of Behavioral Science, 12(1), 69-78.

Seidel, S., & Blanquart, C. (2020). E-commerce in France and Germany a comparative analysis. Recherche Transports Sécurité.

Torres, J. A. S. (2017). Building brand loyalty in e-commerce of fashion lingerie. Journal of Fashion Marketing and Management: An International Journal.

Turcan, R. V., Boujarzadeh, B., & Dholakia, N. (2020). Late globalization and evolution, episodes and epochs of industries: Evidence from Danish textile and fashion industry, 1945–2015. Thunderbird International Business Review, 62(5), 515-530.

Yang, S., Song, Y., & Tong, S. (2017). Sustainable retailing in the fashion industry: A systematic literature review. Sustainability, 9(7), 1266.