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Are you still watching? Lessons from Netflix for your Fashion Brand

December 22, 2022

Remember how awesome the Friday night visit to Blockbuster used to be?

They had the best selection of movies and all the newest releases and a computerized system that made it so easy to find what you wanted.

Then things changed.

Netflix appeared and offered to do the same things Blockbuster did, but even better, including shipping your movie directly to your home and allowing you to send it back to them when you were done with it, so that the next thing on your “to-watch” list could be shipped out for you to watch the next day.

Seems like something that should have been on Blockbuster’s radar, right?

Netflix founders Reed Hastings and Marc Randolph actually had a meeting with Blockbuster and offered to sell Netflix to them for $50 million in early 2000. They were laughed out of the room. But 2 years later, the founders had the last laugh: Netflix went public and is now worth $236 billion.

Blockbuster’s future wasn’t so bright, with the company filing for bankruptcy a few years later, and Friday nights were never the same again. (although at one point you could still rent out an old Blockbuster on Airbnb)

Blockbuster’s demise is not unique. Ecommerce and online B2C fashion brands are taking over brick and mortar market share in a lot of similar ways that Netflix took over the movie rental/streaming market.

At the time when Fashionnova (arguably the largest “new-age” online fashion retailer today) was founded in 2006, Blockbuster was barely hanging on. SexyBack was the #1 song, Crash was the #1 movie, and Instagram was 5 years away from even being an idea.

Fashionnova is now worth $450 million and they’re still only a small piece of the pie.

Fashion is the largest B2C ecommerce market segment and its global size is only getting bigger – estimated to reach $1 trillion USD by 2025.

In the same way that Blockbuster started out as the most convenient way to get what you wanted but was overtaken by new better offerings, fashion brands and retailers are now realizing that there’s only so much convenience you can offer in-store, and there will always be a faster, more convenient way to shop for most items.

In a digital-first world where convenience and selection reign supreme, there are a lot of things fashion brands can learn from the rise and fall of Blockbuster, and it all starts with catering to your customers unique needs.

Personalization: People like this purchase things like that

Netflix estimates that their personal recommendation engine saves them upwards of $1 billion per year.

By utilizing their customer analytics and data points, Netflix is able to confidently suggest future content recommendations that their customers are going to watch (and enjoy), which ultimately increases their overall time spent on the app and leads to fewer people cancelling.

They even personalize the tile images that users see depending on their recent history and viewing behaviour.

In a modern digital world, brand loyalty is becoming harder and harder to retain. But by giving customers a personalized shopping experience based on their actual behaviours, companies can create the best possible experience for customers and ensure that they see things that they’re interested in.

How this relates to fashion

Just like Netflix revolutionized movie night, ecommerce has completely transformed the way we shop for everything – including fashion.

Even the most basic online fashion retailers now have access to more information and purchasing behaviour from their customers than they know what to do with. Here are a few ways you can “personalize” your ecommerce website to cater to your unique customer base:

More Like This (Product Recommendations)

In its simplest form – people who are interested in product A will likely also be interested in product B. Showing visitors similar products on the page they’re on can have a dramatic effect on your bottom line. A recent study showed that almost 8% of those that clicked on a “recommended product” progressed to a sale.

Product recommendations don’t need to be super-specific, and even showing visitors similar product categories can lead to higher conversion rates. There are several tools available that can help you to personalize your customers’ shopping experience. One great example is Wiser’s Personal Recommendation Plug-In , which allows you to offer personalized recommendations based on inventory, pop-ups, browsing history, and more. Wiser also has a “frequently bought” feature that uses A.I. and shopping data from previous customers to automatically recommend products that should go well together.

Continue Watching (Recently Viewed)

Just like Netflix, the UI/UX of your website is one of the most important parts of your brand.

Netflix chooses to use their most lucrative real estate (the first row of content) to showcase shows or movies that you recently viewed and others like those to tempt you to stay on the app.

Similarly, when visitors are making a repeat visit to your site, they should be immediately shown items they recently viewed but haven’t necessarily purchased yet – or better still, items currently in their cart that they haven’t checked out. Amazon also chooses to utilize this method on their homepage in the hope of converting abandoned carts into successful transactions.

I always feel like somebody’s watching meeeeee!

Ever wonder why you always end up seeing ads for things you’ve recently looked at for days/weeks afterwards? It’s because retargeting works.

By pairing your website traffic data with your social media channels, you can keep your brand and products on top of your customers’ minds in line with their recent website visits and the products they’ve looked at. This also allows you to automatically personalize each ad your customers see based on their recent browsing history, eliminating the generic “spray and pray” type of marketing campaigns that often generate little to no ROI.

Creating marketing campaigns based on your website traffic is a no-brainer. And while it can be done by yourself or your tech-savvy marketing department, we recommend using a product like Klaviyo to automate as much of the work as possible.

Klaviyo automatically syncs your customer data with your social media channels to produce personalized ads and social content relevant to your brand and customers’ shopping habits and so is a great tool to have in your marketing arsenal.

Trending Now/New Releases (Most Popular)

“No, you HAVE to watch this. It’ll change your life!”

Have you ever heard this about something on Netflix, only to start it and find yourself covered in Cheeto dust, not knowing where the last 8 hours of your life went?

It’s no secret that fashion lives and dies on current trends. And just like consuming Netflix’s latest in-demand content, we are constantly looking to join in the current trending conversation in fashion.

By simply adding a section to your site to showcase what’s trending or what your top sellers are, your audience can filter your inventory by the most popular items themselves. And you save on expensive ad campaigns or paying social media influencers.

How would you run your business or allocate your marketing budget if you knew you had a guaranteed source of revenue coming in every month?

Netflix has the luxury of knowing exactly how much money they should be getting (give or take a few million) because they operate under a subscription model that guarantees them recurring revenue month-over-month. Not only does this give them a better understanding of their books, but their subscription model can also help forecast future earnings based on that recurring revenue, allowing them to plan their future marketing strategy and campaigns more effectively.

How this relates to fashion

How can a fashion brand get customers to commit to giving them a set amount of money each month? There are more ways than you might think.

First could be a monthly outfit subscription that vary by season and current fashion trends (Menlo Club, Tomorrow’s Laundry & Stitch Fix are a few popular examples). With these types of subscriptions, you start by first asking customers to take a brief “style quiz” to find out their sizing and what types of fashion they like and don’t like. After that, the customer pays a set price every month (although the subscription period may vary) that guarantees a specific amount of clothing and accessories based on their answers to your style quiz.

Although outfit-subscription models tend to be hit and miss with the pairing of unique styles to even more unique customer needs, when done right they can create incredible long-term brand loyalty and repeat business for months and even years to come.

VIP or Loyalty Programs are also a great way to build loyalty and the best part is that you don’t even have to technically sell anything.

Although they typically won’t generate as high a recurring revenue stream (think Amazon Prime or ASOS Premier), they still help build your relationship with customers and provide a unique experience for customers that shop with you often enough to deserve special perks and discounts.

It’s not rocket science and you don’t need to overthink it.

You could simply start by building a premium package or pre-stylized outfit for customers that includes free shipping or a small calculated discount on certain items during certain times. You could even offer early access to sales and promotions or exclusive content that only VIP customers receive – this would also represent a great opportunity to build up your customer email list and start a newsletter where all the content can be organically shared among your customers and their friends and family.

While you’ve probably heard of or even experimented with these types of subscription models, there’s one that many fashion brands often ignore:

Subscription Boxes.

Since the boom in the subscription model, most customers have no problem committing to a monthly expense for a product or service they know they’re going to use each month. The fashion industry provides a unique opportunity to capitalize on the new purchasing behaviors of the younger demographic. The convenience of not having to actually “shop” paired with that hit of dopamine you get when you get the “your package has been delivered” notification means that subscription boxes are now one of the most convenient and effective ways to personalize the customer’s shopping experience when you don’t necessarily have the same human elements and interaction with them that brick and mortar stores do.

On top of the convenience subscription boxes offer your customers, there are a lot of benefits that a subscription box offers your fashion brand too:

Recurring Revenue

The easiest way to justify starting a subscription box for your fashion brand is the guaranteed recurring monthly revenue that it generates.

Knowing that you have a set number of returning customers that will be paying you each month not only allows you to gain a better understanding of where you are financially, but also allows you to strategize your future marketing initiatives or budgets for new influencer campaigns.

Getting Rid of Old Inventory

Nobody likes old styles, but everyone loves a great deal.

The great thing about a subscription box is that it’s a surprise. Most customers love the fact that they have no idea what they’re going to be receiving every month. And by including aged inventory in your subscription box, you’re able to give your subscription customers a great deal on inventory that you no longer want to carry while also saving money on warehouse fees and other costs associated with storing the aged inventory. Everybody wins!

Collab Opportunities

Don’t think of a subscription model as exclusive to your brand and your customers.

A subscription box is a great opportunity to collaborate with other brands in similar industries that still fit your target demographic. The ultimate goal is to provide the most value to your customers by giving them products you know they’ll love and enjoy.

Partnering with similar companies (think beauty and cosmetics, fragrances, jewellery and accessories) to include their products will provide more value to your customers than you could ever offer by yourself while also giving your brand access to a new customer base.

Anything that runs on a cyclical or seasonal calendar needs a consistent, relevant marketing strategy to get the message across effectively and to the most people.

Since their rise to screen-time dominance, Netflix have not sat back and have quietly transformed themselves into a content producing powerhouse. Their original content budget (they’re spending $17.3 billion in 2021 on original video content alone) has nearly tripled in the last 5 years with no sign of slowing down.

While first building their empire on a more convenient rental system and then on the streaming rights of classic movies and TV shows, Netflix realized quickly that at their core, they needed to produce and own the content they were streaming. Your fashion brand should be no different in looking for new opportunities.

Fashion Brands Need to Think of Themselves as Media Companies

Today, there is no such thing as too much content.

On top of the responsibilities that marketing departments have always been tasked with, they’re also now needing to dedicate more time to analyzing website traffic, buyer behaviours, email journeys, and new-age organic marketing efforts, like influencer campaigns.

Where are they finding the time, you ask? Most marketing departments aren’t. Something’s got to give and typically the first thing that gets pushed back is branding and design.

Scaling good content is hard, but not impossible and the best part is you don’t need to hire anyone special to get it done.

There are many on-demand third-party services available for fashion and ecommerce brands that might not have the budget to keep an entire content team on the books but still need quality content produced at scale.

Soona is a great example of a company that can help you scale your fashion brand’s content without you needing to hire a single person. With Soona, you’re able to ship them your product and let them take over and do the heavy lifting, or content producing, for you.

They can create a variety of different types of content (both photo and video), including ecommerce product images for your website, lifestyle photos for your social media pages, and even unboxing videos to show your customers what it’s like to receive your product (if you’ve been following along this far, perhaps an unboxing of your brand-new subscription box?)

If you’re looking to boost your social media and website game, we at DarkRoast Design provide design-on-demand services that will eliminate a lot of the problems most fashion brands have when it comes to producing quality social content at scale.

At DarkRoast Design, we provide you with a dedicated senior-level designer that knows your brand and will work directly with your team to get all those projects you’ve dreamed about doing completed at a fraction of the cost.

We offer unlimited design requests (and revisions) for a flat monthly fee. This helps fashion brands produce on-brand, consistent marketing materials for all their website and social platforms without the commitment of hiring someone full time or the cost of keeping an agency on retainer.

Your marketing department could always use a hand (or two, or three) and sometimes looking at a third-party partner is the easiest way to get stuff done when you need it.

You don’t need a store front on Rodeo drive to be a reputable name in the fashion industry anymore. Just like Netflix, we have seen that all it takes is a better way to do something at the right time.

It’s estimated that the COVID-19 pandemic has accelerated ecommerce growth by 4–6 years. Businesses have been forced to change their entire business models to adapt to a touchless, digital shopping experience and just like Netflix, customers we’re all about it.

Although it has long been apparent that the transition to digital shopping is inevitable, customers have quickly come to realize just how convenient it is to shop online and to have their goods delivered straight to their door.

Return policies have been loosened to make online shopping even easier and while that can be an issue in itself (we recommend taking a look at Shopify’s “The Plague of Ecommerce Return Rates and How to Maintain Profitability”), the fact remains that customers will always look for the most convenient option to suit their needs.

Netflix provided their customers with the most convenient way to rent a movie, and by doing so changed the entire industry forever, and single-handedly put Blockbuster out of business.

Now is the time for you to consider: will you be the next Netflix or Blockbuster?