Eliminating Friction in Fashion Path to Purchase

Eliminating

Friction in

Fashion Path

to Purchase

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2

The content herein is based on the primary survey carried out and consequent data provided by Nielsen India on behalf of Facebook India Online Services

Private Limited (“Primary Data”), which has been relied upon while conducting the secondary survey by [KPMG in India] (“KPMG”). KPMG has also

referred to information from public domain and other secondary sources in conducting secondary survey (“Secondary Data”). KPMG has not verified or

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Disclaimers

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Friction

Decoded -

Scope of

Opportunity

Friction Mapping -

Understanding

Friction

Zero Friction

Future -

Reimagining

The Purchase

Journey

* Friction to be explained in the forthcoming chapters

Executive

Summary

01

02

03

Friction Busting -

Increasing

Sales Opportunity

With Mobile

04

05

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Executive summary

Sources:

[1] Apparel and Footwear in India, Euromonitor, February 2018; Apparel Accessories in India, Euromonitor, February 2018

[2] India Internet Opportunity, Kalaari Capital Advisors, May 2017

*Apparel includes – Clothing for men, women, children and sportswear

**Fashion accessories include – Footwear, Apparel accessories, jewelry, watches and bags

#

This number can be achieved by reducing the friction, thus increasing the addressable market opportunity

India has emerged as one of the world’s fastest-

growing fashion markets over the past few years. It

is projected to grow at 15 per cent CAGR till 2022

and become a USD102 billion market* for apparel

and a USD155 billion market**

[1]

for fashion

accessories.

The growing penetration of the internet, social media

and e-commerce is now providing the consumers in

tier 2 and below cities increased access to brands

and products. New operating models such as omni-

channel and assisted e-commerce could further fuel

growth and adoption of online commerce. E-tail

today contributes 2 per cent of total retail

[2]

, and is

expected to capture a larger chunk of both organised

and unorganised retail in near future. In such an

evolving and competitive market, it becomes critical

to understand consumer expectations from media

touch-points during the purchase journey.

In this report, we aim to understand the reasons that

lead to dropouts in the path to purchase of apparel

and fashion accessories, referred to as ‘friction’,

which may lead to potential loss of revenue for the

brands.

With reduced attention span, increased connectivity

and acceptance of new technology, consumers are

demanding everything with limited effort at a click of

a button and any change in the expectation can

cause them to abandon the purchase journey. To

understand the path to purchase and friction at

different stages of the purchase journey, a random

listing study was conducted by Nielsen India on

3,000 respondents to understand the proportion of

the population that falls at each stage of the journey,

and a further deep-dive study was conducted among

1,025 respondents in the fashion category across

varied demographic and socio-economic groups.

KPMG in India also interacted with industry experts

to obtain their perspective on the possible solutions

to eliminate friction and improve conversion rates.

Our research indicates that

• In the apparel category, 19 per cent of

consumers drop out due to friction, and more

than two-thirds of this friction is caused by the

media

• In the fashion accessories category, 22 per cent

of consumers drop out due to friction, and around

two-thirds of this friction is caused by media

• Mobile platforms are expected to influence more

than two-thirds of both apparel and fashion

accessories purchases by 2022

• Facebook is expected to influence more than half

of mobile-influenced purchases for both apparel

and fashion accessories by 2022

• Mobile-enabled purchase journeys of apparel are

14 per cent shorter than offline journeys

• Mobile-enabled purchase journeys of fashion

accessories are 25 per cent shorter than offline

journeys

• Mobile could help apparel brands to tap into

potential sales opportunity of ~USD5 billion

#

by

reducing media friction

• Mobile could help fashion accessory brands to

tap into potential sales opportunity of ~USD9

billion

#

by reducing media friction

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© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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Consumption in India is undergoing a gradual, yet tectonic shift. Consumer expenditure in India is expected to grow at 12 per cent year-on-year till 2022

[1]

, driving the

consumption of the growing urban population, two-thirds of which lives in 400+ tier 2 and below cities

[2].

Therefore, aspirational demand for branded products from these new

geographies is expected to surge over the next few years. Reaching these consumers through traditional brick-and-mortar route forces the brands to incur heavy capital

investments. Further, with growing access to digital content, consumers today are increasingly updated with the latest fashion trends. Online shopping options and virtual

showrooms are already revolutionising consumers’ shopping journey. In order to tap the emerging opportunities, organisations are deploying unique strategies to penetrate

new markets and differentiate their offerings.

Trends shaping the Indian fashion industry

Rise of content-based commerce

[3]

Emergence of assisted commerce

[3]

Evolving fashion trends of Indian consumers

[4]

Omni-channel for balancing consumers’ expectations

Brands have realised the power of social media and are increasingly leveraging

these platforms that support interactions among users, encourage their

contribution and provide advocacy from influencers. High engagement purchase

categories have found stronger merit in social commerce as it accentuates trust,

referrals and connects with a relatable community.

Micro-targeting by brands through online-only strategy

[3]

Traditional brick-and-mortar brands are adopting digital channels for engaging

with and selling to Indian consumers while defending their competitive

positioning.

Building online brands is helping companies to not only reach a wider

audience, but also test the market before committing to a large-scale

investment.

With similar objectives, established global brands, such as Under Armour,

Bjorn Borg and Replay, are entering India through online-only routes to cater

to their target consumers at minimal investments.

Business models that leverage the existing physical retail network of local

merchants or kiraana stores have emerged to penetrate the 67 per cent of

population that is either not connected to the internet, or have no means to

access aspirational products that do not reach them due to logistical challenges.

Both traditional and internet businesses can adopt such strategies to tap into the

less-penetrated markets of today, and lock these potential consumers to their

brand(s) for tomorrow.

While online platforms allow convenience, information and assortment,

traditional retail allows touch-and-feel and comfort of face-to-face interaction with

brand or store representative.

However, brands — both e-commerce and traditional – have realised the power

of integrating the two channels. Omni-channel is now observed as not only the

means to win consumers, but also the path to higher profitability.

The fashion spectrum in India is evolving where the affluent wants the latest to

keep up with fashion trends, and the masses look for more aspirational

products that offer value for money.

Secondly, the growing propensity of Indian consumers towards fast-fashion is

allowing the brands and retailers to sell their products year-round.

Thirdly, custom-fit apparel have begun gaining popularity again, and premium

brands are targeting niche customers with both made-to-measure and bespoke

fit offerings.

Indian language internet users to drive next wave of growth

India is expected to see a four-fold growth in the number of Indian language e-

tailing users between 2016 (42 million) and 2021 (165 million). By 2021, the

number of Hindi internet users is expected to be more than English users

[3]

.

E-tailers could realise their next big growth-wave by targeting these vernacular

language internet users by creating local content and engaging with them in

the language of their choice.

Sources:

[1] Economies and Consumers Annual Data, Euromonitor, July 2018

[2] India Internet Opportunity, Kalaari Capital Advisory, May 2017

[3] #India Trends 2018: Trends Shaping Digital India, KPMG-YourStory-NASSCOM-Kalaari Report, May 2018

[4] Seven consumption trends that will define the future of Indian apparel industry, Wazir Advisors, 2016

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Understanding the varied dimensions of today’s fashion consumer

My attention

My motivation

My connection

My watch

My wallet

Motivational

characteristics

that drive behaviours

and expectations

How consumers balance

constraints of time and

how they change across

life events

The ways consumers

direct their attention

and focus

How consumers connect

to devices, information

and each other

How consumers adjust

their share of wallet

across life events

Understanding the fashion consumer through 5Mys framework

Source:

Me, my life, my wallet report, KPMG International, 2017

• Brand community events

and support

• Word of mouth online via

fashion blogs

• On-demand availability

of apparel/fashion

accessories (rent/custom

made)

• Referrals from friends

and family

• Peer reviews and

suggestions

• Aspirational vs. functional

apparel/fashion

accessories – ones for

‘my need’ and for ‘my

wallet’

• Off-season sale/discount

• Bundled offers on fashion

accessories and apparel

• Rental options for luxury

apparel or fashion

accessories

• Channel specific

discounts

• Targeted communication

• Relevant information

• Channel and media of

choice

• Customised offers

and(or) payment modes

• Popular trends or fashion

fads

• Customised season-

specific offers

• Occasion-based needs,

e.g., festivals, weddings,

celebrations

• Fashion as a status

symbol

• Celebrity endorsements

• Seasonal preferences e.g.

linen clothes during

summers

• Functional purchases

such as sportswear, gym-

wear, etc.

• Emotion based purchase

e.g. eco-friendly or

organically made clothes

• Fast access to new

designs and styles

• Innovative models such

as ‘Buy Online, Pickup In

Store’

• Home pick-up in case of

replacement and delivery

• Eliminating wait time

using virtual changing

rooms

• Content for consumer

stickiness with brand(s)

Wallet-shareMind-share Time-share

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Friction Decoded -

Scope of Opportunity

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Understanding and defining friction

The traditional path to purchase is undergoing transformation

with the advent of technology, smartphones and digital

assistants, and is expected to be replaced by personalised

journeys.

Today’s consumer expects and demands convenience, speed,

automation and simplicity that weren’t possible a few years

ago. Any unnecessary additional effort, incremental step or

inconvenience that leads the consumers to abandon their

purchase journey is defined as ‘friction’.

Friction may occur offline or online, and includes subjecting

consumers to unnecessarily wait, queue, click, type, tap, add

information or fill in forms. On their journey, they may also have

to load, buffer, switch channels/windows or hold for service. It

can hinder efficiency, impact consumer experience and in turn,

the consumer purchase journey. Any friction that is primarily

caused by a media touch-point is defined as ‘Media friction’.

Research shows that consumer pain points that lead to friction

can occur across three main stages of the consumer journey:

awareness, consideration and intent as listed below.

Businesses may be offering friction unknowingly, hindering

efficiency and in turn, the consumer journey.

• Awareness Friction: Every touchpoint or missing

touchpoint that requires the consumers to make any effort

to discover a brand

• Consideration Friction:: Every touchpoint or missing

touchpoint that requires the consumers to make any effort

to consider a brand

• Intent Friction:: Every touchpoint or missing touchpoint

that requires the consumers to make any effort to purchase

a brand

Awareness

Consideration

Intent

Purchase

Discovering the

product and identifying

the need

Gathering information and

decision-making

parameters to narrow the

consideration set

Displaying realistic intention to

purchase and understanding the

purchase process

Completing the transaction

Buyer

Post

Purchase

Consideration

friction

Intent friction

First time purchaser

of a fashion product

Repeat purchaser of

a fashion product

Potential buyer

Path-to-purchase (P2P)

Awareness

friction

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Awareness

Consideration

Intent

Purchase

Post

Purchase

Discover models,

brands and

categories

Research trends on

social media, vlogs,

blogs, magazines,

etc.

Compare styles/brands

on different portals or

websites

Seek

opinions

Visit

showroom

Seek expert

views

Visit brand

website/e-

commerce

portal or

app

Check for payment

options

Make a

purchase

Recommend/

review

Contact

customer

service/

customer care

for exchange or

replacement

• The ad content does not appeal to the consumer, or a potentially ‘good’ ad

content displayed at a time that caused ‘inconvenience’ to the consumer

• The consumer is targeted with an ad that is not relevant to him/her

• Ad content is not appealing in terms of design/colour/graphics or offer

negative reviews or coverage about the item or brand in media and(or)

other channels

• Desired brand or style is out-of-stock at the beginning of the purchase

journey itself

• The prospects learns about hidden terms and conditions on offers

communicated in advertisements

An apparel/fashion accessories buyer’s friction areas

Fashion needs identified –

Utilitarian (Use based) or

Hedonic (Pleasure/Status)

Check for fit and size

variations

• Opinion of peers differ from the prospect’s perception

• Limited community or influencer view on the selected item

• Showroom of the shortlisted brand is not in vicinity of the prospect

• The required size/colour is not available in the store/portal

• Sales representative is not able to assist the prospect

• The apparel’s look and feel does not match expectations from

advertisements across media channels

• Consumers not sure how the apparel or fashion accessories fit them, since

catalogue displays only attractive models

• Consumer travels long distance at the cost of his/her daily schedule to

visit the store

• No arrangement for alteration of the product

• Sales representative fails to provide information to the consumer for

size/colour/material

• Experience at the showroom was not pleasant or up to the consumer’s

expectations

• Competing brand provided a better offer

• Preferred payment options are not available

• Product delivered differs from what was displayed on the online catalogue

Decoding a fashion buyer’s journey and friction across purchase stages

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12

Media friction accounts for more than two-thirds of total friction in the

apparel purchase journey

• 'Deep Dive is only among 86 per cent of the population who are Aware Decision

Makers for Apparel and Accessories categories each

• At intent stage, only retail store and online touch-points were evaluated in media

mix to calculate friction

• Apparel Buyers – Aware Decision Makers who have purchased or tried to purchase a

clothing apparel in the last 3 months

• Apparel Considerers – Aware Decision Makers who have considered purchase of a clothing

apparel in the last 3 months but have yet not purchased

• Apparel Aware Non-considerers – Aware Decision Makers who have not considered

purchase of a clothing apparel in the last 3 months

In a highly penetrated apparel market, nearly one out of five buyers abandon the purchase during some stage of the purchase journey. Such dropout could be on account

of unavailability of desired product, hidden charges, compulsory registration, stock-out or any other dissatisfaction caused by media touch-point(s).

More than a two-thirds of friction loss is driven by dissatisfaction with media touch-point(s) across the purchase journey. Friction is observed the most at the final stage of

the journey, where highest media friction is experienced. Despite heavy focus of leading e-commerce platforms on bottom of the pyramid oriented marketing campaigns

[1]

,

media friction remains highest (8 per cent) at intent stage.

Source:

[1] How e-commerce companies make you spend more, YourStory, April 2017

3%

10%

19%

Media

friction

2%

8%

2%

12%

Total

friction

Consumers who are unaware of the category, or are

not primary decision makers/influencers

Awareness

friction

Aware decision

makers & influencers

Consideration

Intent

86%

77%

Purchase

Consideration

friction

Intent

friction

80%

67%

Total population – 100%

=

14%

Base = 547

Apparel

6%

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13

• 'Deep Dive is only among 86 per cent of the population who are Aware Decision Makers

for Apparel and Accessories categories each

• At intent stage, only retail store and online touch-points were evaluated in media mix to

calculate friction

• Accessories Buyers – Aware Decision Makers who have purchased or tried to purchase a

male and(or) female fashion accessories in the last 3 months

• Accessories Considerers – Aware Decision Makers who have considered purchase of a

male and(or) female fashion accessories in the last 3 months but have yet not purchased

• Accessories Aware Non-considerers – Aware Decision Makers who have not considered

purchase of a male and(or) female fashion accessories in the last 3 months

Base = 478

Fashion accessories is a high-engagement category, where consumers seek to evaluate how watches, jewelry or footwear look or fit in terms of size, and style or design.

Despite this, nearly half of the total friction loss is observed at the intent stage, where consumers evaluate last minute offers and prices. Also, campaigns by the brands

targeted at creating awareness at top of the funnel drive consumers towards the brand at the point of sale. Further, contribution of media to friction is 80 per cent at intent

stage and nearly half at the top of the funnel. Brand building content and advocacy can plug friction at top of the funnel, while improved efficiency in media and point of sale

is needed to close the larger gap of intent stage friction.

Media friction accounts for 60 per cent of total friction in the fashion

accessories purchase journey

4%

8%

10%

Media

friction

3%

8%

2%

22% 13%

Total

friction

Consumers who are unaware of the category, or

are not primary decision makers

Awareness

friction

Consideration

Intent

Purchase

Consideration

friction

Intent

friction

78%

74%

64%

Total population – 100%

=

14%

Accessories

Aware decision

makers & influencers

86%

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14

Apparel

Mobile could help apparel brands to tap into potential sales opportunity

of approximately USD5 billion by reducing media friction

Media friction can impact marketing ROI and significantly hit a brand’s bottom line. The loss of even a single prospect can add to revenue loss, more so in case of luxury or

high-end fashion market. Each and every sale counts, and according to this study mobile has the potential to reduce media friction by 3 percentage points, creating a sales

opportunity of about USD5 billion between apparel brands

[1][2]

. Based on this study, currently, nearly half of apparel purchases are influenced by mobile, and by 2022, nearly

two out of three apparel purchases would be influenced by mobile. In addition, the reduction in media friction could accelerate the growth in fashion e-commerce. Hence, it

becomes imperative for marketers to strengthen their media mix by enhancing marketing activities on mobile.

Media friction

observed in

purchase journey

12%

Estimated media

friction in

purchase journey

~9%

By reducing media friction with mobile, apparel brands can tap into a

~USD5 billion* opportunity

Note: Potential opportunity estimated by KPMG India is based on the potential reduction in consumer dropout. Modelling for reduction in

dropouts is based on the potential friction reduction, which may get impacted due to the usage of mobile-based media.

*This number can be achieved by reducing the friction, thus increasing the addressable market opportunity

Source:

[1] Apparel and Footwear in India, Euromonitor, February 2018

[2] KPMG in India's analysis, 2018 based on data obtained from multiple industry reports and primary survey conducted by Nielsen, 2018

2017

2022

e

Enhancing mobile in

media mix

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15

Accessories

Mobile could help accessories brands tap into potential sales

opportunity of approximately USD9 billion by reducing media friction

Mobile has the ability to reduce media friction, and by enhancing mobile in the media mix, brands can improve the conversion rate. Mobile not only helps add additional

revenue, but also enhances the customer experience leading to more satisfied consumers. In case of fashion accessories, mobile can reduce media friction by nearly 4

percentage points, creating a sales opportunity of about USD9 billion between the fashion accessories brands

[1][2]

. Currently, more than half of fashion accessories

purchases are influenced by mobile, and by 2022, more than 70 per cent of such purchases would be influenced by mobile.

Media friction

observed in

purchase journey

13%

Estimated media

friction in

purchase journey

~9%

Note: Potential opportunity estimated by KPMG India is based on the potential reduction in consumer dropout. Modelling for

reduction in dropouts is based on the potential friction reduction, which may get impacted due to the usage of mobile-based media.

*This number can be achieved by reducing the friction, thus increasing the addressable market opportunity

Source:

[1] Apparel and Footwear in India, Euromonitor, February 2018; Apparel Accessories in India, Euromonitor, February 2018

[2] KPMG in India's analysis, 2018 based on data obtained from multiple industry reports and primary survey conducted by

Nielsen, 2018

2017

2022

e

By reducing media friction with mobile, fashion accessories brands can tap into a

~USD9 billion* opportunity

Enhancing mobile in

media mix

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16

Friction Mapping -

Understanding

Friction

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17

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18

Consumers expect more information and clarity on next steps at the top of the funnel, where traditional media such as print, outdoor and radio are relatively less efficient.

Further, two-thirds of media-led friction occurs at intent stage of the purchase journey. While consumers are most comfortable in physical browsing and trial of apparel at

stores, the survey revealed that nearly one-third of the consumers at retail stores found a better product, brand, or price elsewhere. A similar behaviour was observed for e-

commerce portals, where the proportion of consumers facing friction shows an increasing trend from one in five at the awareness stage, to nearly one-third at intent stage.

This indicates that while e-commerce platforms provide relevant information, they lack the ability to drive the final transaction efficiently.

Base = 547

Apparel Buyers – Aware Decision Makers who have purchased or tried to purchase a clothing

apparel in the last 3 months

Apparel Considerers – Aware Decision Makers who have considered purchase of a clothing

apparel in the last 3 months but have yet not purchased

Apparel Aware Non-considerers – Aware Decision Makers who have not considered

purchase of a clothing apparel in the last 3 months

Note: * At intent stage, only retail store and online touch-points were evaluated in the research to eliminate default

attribution to top-of-mind channels

** Online includes top five media touch points accessed by respondents at respective stage of the journey

Top 3 friction-causing media at Awareness stage

Top 3 friction-causing media at Consideration stage

Top friction-causing media at Intent stage*

Outdoor PrintRadio

PrintRadio

Online** Retail Store

Media

friction

2%

8%

2%

12%

Consideration

Intent

86%

77%

Purchase

Consideration

friction

Intent

friction

80%

67%

Total population – 100%

Awareness

friction

Aware decision

makers/influencers

=

86%

74%

70%

90%

89%

Outdoor

85%

74%

57%

Apparel

More than 8 out of 10 people face friction on print, outdoor and radio at

the top of the apparel purchase funnel

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19

Base = 478

Static media touch points such as print, radio and outdoor offer the highest friction at the top of the funnel. Although these media touch-points are best suited for creating

‘brand awareness and recall’ among the target consumers, they are less suited for providing further information to the consumers. Online channels, on the other hand,

perform better as source of more information or as point of sale. Not only can online platforms attract attention of consumers through contextualised and targeted

communication, but can also provide detailed product information with convenience of home delivery. However, in terms of transactions, only 20 per cent of buyers reported

using e-commerce for purchase of fashion accessories, indicating an opportunity for the brands to further leverage digital channels for improving their reach among target

consumers.

Accessories Buyers – Aware Decision Makers who have purchased or tried to purchase

a male and(or) female fashion accessories in the last 3 months

Accessories Considerers – Aware Decision Makers who have considered purchase of a

male and(or) female fashion accessories in the last 3 months but have yet not

purchased

Accessories Aware Non-considerers – Aware Decision Makers who have not considered

purchase of a male and(or) female fashion accessories in the last 3 months

Note: * At intent stage, only retail store and online touch-points were evaluated in the research to eliminate default

attribution to top-of-mind channels

** Online includes top five media touch points accessed by respondents at respective stage of the journey

Media

friction

3%

8%

2%

13%

Consideration

Intent

86%

74%

Purchase

Consideration

friction

Intent

friction

78%

64%

Total population – 100%

Awareness

friction

Aware decision

makers/influencers

=

Top 3 friction-causing media at Awareness stage

Top 3 friction-causing media at Consideration stage

Top friction-causing media at Intent stage*

PrintRadio

Online** Retail Store

72%

64%

93%

92%

Outdoor

72%

67%

47%

Outdoor

57%

Accessories

Print, outdoor and radio cause dissatisfaction to nearly 7 out of 10

people in fashion accessories purchase funnel

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20

Both genders display different drivers for entering the purchase funnel. Men seek clear next steps after watching an advertisement. On the other

hand, women are more susceptible to ignoring ads if they fail to either capture their attention or provide relevant information. As the prospects move

ahead in the purchase journey, offer communication and better ‘value for money deals’ become important decision-making parameters for both

genders. At the intent stage, consumers lack trust with point of sale on account of product authenticity, delivery and payment. However, consumers

are much more likely to switch brand/sales channel at retail stores, as they are significantly more likely to find better price, product or fit elsewhere.

5%

11%

4%

Male

Female

Prospect does not know

what to do next after

watching ads

Prospect finds too little

information from ads

Offer communication is not

clear

Prospect does not find

requisite information

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

5%

10%

3%

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Prospect finds too little

information from ads

Prospect did not pay

enough attention to ads

Offer communication is not

clear

Prospect does not trust the

medium as source of

information

Note: * At intent stage, only retail store and online touch-points were evaluated in the research to eliminate

default attribution to top-of-mind channels

18%

Media friction (%)

17%

25% 22%

17%

37%

17% 17%

=

20%

=

18%

Aware decision makers/

influencers

Consideration

Intent

Purchase

Total population – 100%

Consideration

friction

Intent friction

84%

79%

76%

66%

Awareness

friction

Consideration

friction

Intent friction

88%

83%

79%

68%

Awareness

friction

28%

‘Value for money’ and ‘credible information’ at point of sale are

common asks for both men and women

Legend

Outdoor Print Television Digital Medium*

Media with highest contribution to top two friction points

Retail store

Radio

Apparel

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21

Consideration

friction

Intent friction

Awareness

friction

Consideration

friction

Intent friction

Awareness

friction

Note: * At intent stage, only retail store and online touch-points were evaluated

in the research to eliminate default attribution to top-of-mind channels

8%

4%

7%

12%

4%

A similar proportion of target population of men and women commences purchase journey of fashion accessories. Primary reasons for abandoning the

purchase are same for men and women. However, women are more sensitive to price of the product and trust at the point of sale. Men, on the other hand,

are more likely to ignore an advertisement at top of the funnel, but seek lucrative offers and detailed information for evaluating their shortlisted products.

Further, the tendency of consumers to switch to another product or brand is significantly higher at offline stores. Of the total, 41 per cent men and 33 per

cent women are likely to find an option of the product elsewhere when buying at retail stores. On the other hand, brand or product loyalty is observed to be

higher at online stores among both genders.

Prospect finds too little

information from ads

Prospect did not pay attention to

the ads

Offer communication is not clear

Prospect does not find requisite

information

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Prospect does not know what to

do next after watching ads

Prospect finds too little

information from ads

Offer communication is not

clear

Prospect does not find

requisite information

11% 19%

24% 22% 16%

11%

16%

23%

20%

Media friction (%)

=

16%

=

23%

Aware decision makers/

influencers

Consideration

Intent

Purchase

Total population – 100%

84%

77%

73%

61%

88%

80%

76%

72%

19% 35%

27%

Women are more sensitive to the price of product and lack trust at

point of sale

Legend

Outdoor Print Television Digital Medium*

Media with highest contribution to top two friction points

Retail store

Radio

Male

Female

Accessories

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22

Although e-commerce advertising is often targeted towards younger age groups, similar number of potential consumers across older age groups also enter and

complete the purchase journey. Unlike younger consumers, 35-49 year-olds are more sensitive to inaccurate targeting of ads, or lack of clear call-to-action.

However, younger age group of 18-24 year olds has a higher propensity to drop out at the intent stage.

Consumers from all age groups display discontent for lack of options to compare, lack of attractive offers and expectation mismatch at point of sale. This

creates an opportunity for e-commerce players to deploy a full-funnel marketing strategy by addressing such friction points. Brand’s marketing communication

strategy implemented in tandem with e-commerce strategy, could capture leads at top of the funnel and facilitate their movement through the purchase funnel.

Note: * At intent stage, only retail store and online touch-points were evaluated in the research to

eliminate default attribution to top-of-mind channels

Friction points

for 35-49 years

Prospect finds too little

information from ads

Prospect does not know what

to do next after watching ads;

and prospect did not pay

attention to the ads

Prospect does not trust the

medium as source of

information

Prospect does not find

requisite information

Prospect found a better

price/option elsewhere

Prospect found it difficult to

express interest/buy

instantly

Friction points

for 25-34 years

Prospect does not know what to

do next after watching ads

Prospect did not pay enough

attention to ads

Offer communication is

not clear

Prospect does not trust

the medium as source of

information

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Friction points

for 18-24 years

Prospect finds too little

information from ads

Prospect does not know what

to do next after watching ads;

and prospect did not pay

attention to the ads

Offer communication is not

clear

Prospect does not find

requisite information

Lack of trust at point of sale

Prospect found a better

price/option elsewhere

21% 40% 20% 20%

28% 23% 44% 35% 29%36%

14% 21%

24%

Consideration

Intent

88%

84%

80%

Purchase

68%

86%

79%

76%

67%

18–24 years

3%

9%

25–34 years 35–49 years

Aware decision

makers/influencers

84%

81%

77%

68%

4%

3%

9%

Total population

100%

Total population

100%

Total population

100%

4%

12%

= =

16% 19%20%

7%

Media friction (%)

22% 24%

40%

Legend

Outdoor Print Television Digital Medium*

Media with highest contribution to top two friction points

Retail store

Radio

Apparel

All age groups seek product assortment with attractive offers and

assured authenticity

Media friction (%)

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23

Highest friction in fashion accessories purchase across all age groups is observed at the top of the funnel. The age group of 35-49 years distinctly show

dissatisfaction with print advertisements in terms of gathering information or understanding next steps in the purchase journey. This age group also

seeks more assistance in decision making, and is less likely than younger age groups to abandon the purchase at the bottom of the funnel. The age

group of 18-24 years abandon the purchase at the awareness stage itself, because the advertisement fails to both capture their attention and provide

call-to-action. Further, all age groups demand competitive pricing and assurance of quality from the sales channel they purchase from.

Friction points

for 35-49 years

Prospect does not know

what to do next after

watching ads

Prospect finds too little

information from ads

Prospect does not find

requisite information

No expert advice/answers

available

Prospect found a better

price/option elsewhere

Lack of trust at point of

sale

Friction points

for 25-34 years

Prospect finds too little

information from ads

Prospect does not know what

to do next after watching ads

Offer communication is

not clear

No expert advice/answers

available

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Friction points

for 18-24 years

Prospect does not know what

to do next after watching ads

Prospect did not pay enough

attention to the ads

Prospect does not find

requisite information

Offer communication is

not clear

Prospect found a better

price/option elsewhere

Lack of trust at point of sale;

and it was difficult express

interest or buy instantly

Note: * At intent stage, only retail store and online touch-points were evaluated in the research to eliminate default

attribution to top-of-mind channels

27% 11% 29% 22% 41% 17%

9% 26% 33% 20%

19% 25% 15%

Consideration

Intent

89%

80%

76%

Purchase

72%

86%

77%

73%

68%

18–24 years

4%

5%

25–34 years 35–49 years

Aware decision

makers/influencers

84%

78%

74%

71%

4%

6%

3%

Total population

100%

Total population

100%

Total population

100%

9%

4%

= =

13% 18%17%

9%

Media friction (%)

29%20%

Accessories

Across age groups, more than 1 in 3 consumers shopping at retail

stores are likely to change their accessories purchase decision

Media friction (%)

Legend

Outdoor Print Television Digital Medium*

Media with highest contribution to top two friction points

Retail store

Radio

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24

Both NCCS A and NCCS B* consumers display comparable tendency to enter and complete the apparel purchase journey. However, more than three-fourths

of prospects abandon the purchase at either the awareness or intent stage.

Further, the spending patterns evolve from need or utility based for NCCS B consumers, to hedonic for NCCS A consumers. At the top of the funnel, NCCS B

consumers tend to ignore advertisements that do not resonate with their needs. Further, although e-commerce advertisements are more often focused on

NCCS A consumers, NCCS B consumers are 34 per cent more likely to purchase apparel online than NCCS A consumers, thereby offering an additional

source of growth to e-commerce players. While network robustness could improve gradually, innovative solutions such as an offline shopping mode on e-

commerce apps and assisted e-commerce could curb a significant portion of final-stage friction loss arising due to weak internet connectivity.

4%

10%

4%

Prospect finds too little information

from ads

Prospect does not know what to

do next after watching ads

Offer communication is not clear

Prospect does not find requisite

information

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

7%

8%

5%

Lack of trust at point of sale

Connectivity issue impacting

experience

Prospect did not pay enough

attention to ads

Prospect does not know what to do

next after watching ads

Prospect does not find requisite

information

Offer communication is not clear

Note: At intent stage, only retail store and online touch-points were evaluated in the research to eliminate

default attribution to top-of-mind channels

*NCCS- New Consumer Classification System

30%

Media friction (%)

28% 30% 19%

21%

32%

28%

19%

14%

21%

=

18%

=

20%

Aware decision makers/

influencers

Consideration

Intent

Purchase

Total population – 100%

Consideration

friction

Intent friction

87%

80%

75%

67%

Awareness

friction

Consideration

friction

Intent friction

85%

81%

77%

67%

Awareness

friction

Media friction (%)

31%

Apparel

Legend

Outdoor Print Television Digital Medium*

Media with highest contribution to top two friction points

Retail store

Radio

Media friction (%)

Poor connectivity and lack of trust at point of sale inhibit mobile-driven

purchase journeys of NCCS B consumers

NCCS A NCCS B

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25

7%

4%

3%

10%

4%

5%

NCCS B* consumers are more likely to abandon purchase of fashion accessories after entering the purchase funnel as compared to NCCS A

consumers, and half as likely as NCCS A consumers to transact online. More than half of friction loss among NCCS B consumers occurs at the

awareness stage itself. Performance of digital medium could be further enhanced by targeting NCCS B consumers with the relevant content. Further,

at consideration stage, this consumer segment is more sensitive to price offers and lacks trust in the information shared by traditional media.

Prospect does not know what to

do next after watching ads

Prospect finds too little

information from ads

Prospect does not find requisite

information

Offer communication is not clear

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Prospect found a better

price/option elsewhere

Lack of trust at point of sale

Prospect does not know what to

do next after watching ads

Prospect finds too little

information from ads

Offer communication is not clear

Prospect does not trust the

medium as source of

information

Note: At intent stage, only retail store and online touch-points were evaluated in

the research to eliminate default attribution to top-of-mind channels

*NCCS- New Consumer Classification System

Media friction (%)

19% 23% 17%

18%

50%

36%

19%

20%

=

14%

=

19%

Aware decision makers/

influencers

Consideration

Intent

Purchase

Total population – 100%

Consideration

friction

Intent friction

87%

77%

72%

68%

Awareness

friction

Consideration

friction

Intent friction

85%

78%

75%

71%

Awareness

friction

27%

21%

Accessories

Legend

Outdoor Print Television Digital Medium*

Media with highest contribution to top two friction points

Retail store

Radio

Lack of contextualised content and clear call-to-action mechanism are

key asks for NCCS B consumers

NCCS A NCCS B

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26

At the awareness stage, the objective of advertising campaigns is to make the brand visible and stand out from the crowd. Traditional print media placements,

store displays, extravagant photo-shoots and images of celebrities wearing the brand collections have been conventionally used by fashion brands to create

consumer awareness. However, new age digital platforms have emerged as a preferred source for building consumer awareness and communication.

Fashion and retail brands are leveraging social platforms to successfully create a community following. By way of highly efficient tools such as sequential

advertisements and analytics based micro-targeting, digital platforms outscore traditional media at the top of the funnel in capturing the attention of

consumers, and driving them towards the point of sale.

Awareness

Consideration

Intent

Purchase

Top friction points Television Print Outdoor Radio

Retail

store/outlet

Online*

Prospect finds too little

information from ads

Prospect does not

know what to do next

after watching ads

Prospect did not pay

enough attention to

ads

Offer communication

is not clearly

mentioned

Payment

schemes/options

available are not

enlisted

29%

28%

22%

16%

27%

12%

9%

2%

3%

21%

29%

12%

10%

9%

14%

29%

8%

4%

5%

36%

32%

19%

5%

4%

2%

7%

4%

5%

9%

12%

11%

7%

Percentage of respondents experiencing the mentioned

friction in respective media touchpoints

%

Media with lowest friction for the given friction point Media with highest friction for the given friction point

Medium causing high friction

Apparel: Awareness friction

* Online includes top five media touch points accessed by respondents at respective stage of the journey

New age digital platforms emerging as the preferred source for

consumer awareness and communication

Apparel

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27

While traditional mediums, such as print and radio, lag in meeting consumers’ expectations at the top of the funnel, fashion accessories brands and retailers

are increasingly leveraging digital platforms for deploying their full-funnel strategies. Xeric brand of watches has leveraged social media to bootstrap the

brand awareness for its vintage inspired watches and raised more than USD2 million by leveraging the power of social media and crowdfunding

[1]

. Today,

people do not have to rely on traditional advertising mediums to stay abreast with fashion trends, but prefer digital mediums to seek information. Fashion

accessories brand, Kate Spade allows its customers to ‘seamlessly explore, tap and shop the product’— going from inspiration to information to purchase in

just a few steps. Shoppable (also called interactive or e-commerce) technology allows viewers to click prompts on the screen to save items for viewing later

or to head straight to a link to buy the item. Social media oriented marketers who have already uploaded their product catalogues on that platform can easily

plug them into the ‘shoppable technology.’

[2]

Awareness

Consideration

Intent

Purchase

Top friction points Television Print Outdoor Radio

Retail

store/outlet

Online*

Prospect does not

know what to do next

after watching ads

Prospect finds too little

information from ads

Prospect did not pay

enough attention to

the ads

Payment

schemes/options

available are not

enlisted

Offer communication is

not clearly mentioned

27%

26%

22%

17%

15%

13%

20%

5%

3%

2%

31%

21%

13%

7%

8%

12%

9%

13%

7%

8%

26%

6%

24%

9%

18%

0%

3%

1%

2%

3%

Percentage of respondents experiencing the mentioned

friction in respective media touchpoints

%

Media with lowest friction for the given friction point Media with highest friction for the given friction point

Medium causing high friction

Accessories: Awareness friction

0%

5%

8%

4%

6%

[1] How a Vintage-Inspired Watch Brand Used Crowdfunding and Social Media to Raise Millions, Adweek.com, April 2017

[2] Retailers Can Now Make Instagram Posts Much More Shoppable, Adweek.com, May 2017

* Online includes top five media touch points accessed by respondents at respective stage of the journey

Innovative applications of digital platforms augment consumer

experience with brands at the top of the funnel

Accessories

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28

Awareness

Consideration

Intent

Purchase

Fashion brands, which traditionally used print extensively, are gradually moving towards digital. Leading global brands such as Gucci, Louis Vuitton and others

have spent 60 per cent more on online ads in 2016 as compared to 2013.

[1]

Tailor-made and in-vogue product suggestions, purchase discounts, offers and

incremental services that are suitable to meet consumer’s lifestyle, comfort and requirement could significantly aid brands in converting the acquired lead into a

potential buyer at this stage. Digital channels are uniquely equipped to, first identify prospects that have moved to the consideration stage by analysing their

digital footprints, and then provide immersive and sequential content to assist them in the purchase journey. Virtual product trials and technology based tools for

accurate body measurements have already become a commercial reality and could further break barriers to evaluating and buying apparel online.

Awareness

Consideration

Intent

Purchase

Top friction points Television Print Outdoor Radio

Retail

store/outlet

Online*

Offer communication

is not clear

Prospect does not

find it easy to

browse/find

information required

Prospect does not

trust the medium as

source of information

Not able to get

credible/clear advice

Prospect does not

get all the required

information

27%

22%

20%

16%

14%

2%

8%

26%

3%

53%

6%

17%

16%

6%

28%

11%

37%

12%

11%

22%

17%

31%

9%

2%

3%

1%

5%

8%

9%

12%

6%

10%

Percentage of respondents experiencing the mentioned

friction in respective media touchpoints

%

Media with lowest friction for the given friction point Media with highest friction for the given friction point

Medium causing high friction

Apparel: Consideration friction

[1] ”Fashion Ads, a Last Bastion of Print, Are Going Digital”-Matthew Dalton, WSJ.com, June 2017

* Online includes top five media touch points accessed by respondents at respective stage of the journey

Digital helps drive brand visibility and stickiness

Apparel

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29

Fashion-related products remain the number one category for online sales globally, and the numbers continue to grow. While the e-commerce industry

allocates more than two-thirds of its marketing budget to television, print, radio and outdoor

[1]

, these mediums scored significantly less in meeting consumers’

expectations at this stage. On the other hand, creative usage of digital technology is becoming more evident in the retail and online fashion market. Leading

fashion accessories brands in India have tried to eliminate the need for visiting a retail store by deploying Virtual Reality (VR), which allows users to interact

with high resolution 3D catalogue of products and see how they look from every angle. Such adoption of technologies has rewarded e-tailers with lower

perception of ‘touch and feel friction’ on an online portal than in offline touch-points. Digital content supported by such technologies could make the evaluation

process of fashion accessories more interactive and engaging for consumers.

Awareness

Consideration

Intent

Purchase

Top friction points Television Print Outdoor Radio

Retail

store/outlet

Online*

Prospect does not

find it easy to

browse/find

information required

Offer communication

is not clear

Not able to get

credible/clear advice

Prospect does not

trust the medium as

source of information

Unable to touch and

feel the product

28%

27%

23%

21%

2%

13%

25%

5%

12%

32%

27%

20%

14%

10%

27%

9%

29%

15%

8%

20%

13%

30%

8%

3%

6%

1%

2%

5%

4%

10%

6%

Percentage of respondents experiencing the mentioned

friction in respective media touchpoints

%

Media with lowest friction for the given friction point Media with highest friction for the given friction point

Medium causing high friction

Accessories: Consideration friction

[1] Digital Advertising in India 2018, Dentsu Aegis Network

* Online includes top five media touch points accessed by respondents at respective stage of the journey

17%

Virtual trials have broken the barrier of touch-and-feel for e-tailing

platforms

Accessories

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30

Online brands have leveraged digital technology to match their relevance with the traditional retail stores. For instance, Virtusize allows online shoppers to go

through different outfits and compare the size and fitting of a garment they are looking to purchase with their favourite wardrobe outfits they already own. This

comparison helps them in selecting the ideal fit.

[1]

. However, customers still experience friction while concluding purchase on the online mediums. The inability

to ensure that the product displayed in catalogue is how it actually looks, and apprehension around delivery and return of the product, lead to lack of trust with

online point of sale. Further, more than one-fourth of e-commerce users face friction while completing online payments.

Traditional retail stores may continue to stay relevant and score higher on parameters of trust, touch-and-feel and impulse purchases. However, an optimised

omni-channel play, with multiple payment solutions could integrate the two channels and address each others’ friction areas to provide a uniform experience to

consumers.

% Percentage of respondents experiencing the mentioned friction in respective media touchpoints

[1] ‘How it works’, Vitusize.com, June 2018

* Online includes top five media touch points accessed by respondents at respective stage of the journey

Awareness

Consideration

Intent

Purchase

Top friction points Retail store/outlet Online*

Prospect did not find the preferred

payment option

Prospect found a better price/option

elsewhere

Lack of trust at point of sale

The right size was no longer available

Payment failed and prospect did not

try again

30%

25%

22%

Apparel: Intent friction

32%

2%

7%

12%

23%

12%

21%

33%

0%

37%

18%

21%

Note: At intent stage, only retail store and online touch-points were evaluated in media mix to calculate friction

Online platforms provide product information and comparisons, but

cause friction at the point of sale

Apparel

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31

At retail stores, consumers are more likely to be influenced by a competing brand or product. Especially in multi-brand outlets, where products from various

brands are on display, it is more convenient for consumers to compare prices, features and fit of products. On the other hand, it is more likely that a

consumer accesses an online channel with a predetermined set of brands or products. Therefore, stickiness of a consumer with a brand is significantly

higher on online portals.

However, online point of sales still offers friction on account of convenience of payment, touch and feel of product and credibility of information. Localisation

of payment web-pages and offering multiple and easy payment solutions could address such concerns significantly. Further, e-tailers have already seen

proven results from VR-based platforms providing a virtual experience of the product and prompt chat-bot based system for customer connect, targeted at

addressing bottom-of-the-funnel friction.

% Percentage of respondents experiencing the mentioned friction in respective media touchpoints

Note: At intent stage, only retail store and online touch-points were evaluated in media mix to calculate friction

* Online includes top five media touch points accessed by respondents at respective stage of the journey

Awareness

Consideration

Intent

Purchase

Top friction points Retail store/outlet Online*

Prospect found a better price/option

elsewhere

Prospect did not get the preferred

payment option

Lack of trust at point of sale

Unable to touch and feel the product

The same price was no longer available

or the offer had expired

34%

26%

19%

18%

28%

Accessories: Intent friction

43%

5%

6%

9%

14%

17%

22%

15%

16%

18%

Online observes higher stickiness of consumers towards brand or

product at bottom of the funnel

Accessories

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32

Accessories

Apparel

Lack of immediate availability and touch-and-feel of size, colour, fit and design of product(s) are the key barriers to online fashion commerce today. E-tailers are increasingly

adopting consumer-friendly technology solutions and are integrating digital technology to their physical assets to either replicate, or complement the offline consumer

experience. They, however, are still solving the ‘returns management’ part of the e-commerce puzzle. Omni-channel has offered one of the solutions where consumers

could access physical touch-points of e-tailers for both returning and experiencing the products. Both offline and online brands today are increasingly exploring omni-

channel strategies to offer the best of both channels to the consumers.

Further, advocacy is a major aspect of apparel and fashion accessories. Consumers display their fashion purchases and are more vocal about their product experience.

Consumers who shop online are more likely to speak about the purchase and give reviews about the product quality or experience with the portal. In a category where

brand or channel loyalty is low, fashion brands could create communities around their differentiated brand identities to engage with potentially loyal customers.

47%

33%

23%

Spoke about the

purchase on social

media

Recommended the

purchase to friends,

family members on

social media or chat

apps

Wrote reviews for the

product online

Purchase channel preference Post purchase activities

38%

29%

Wrote reviews for the

product online

40%

Spoke about the products

purchased on social

media

Recommended the

purchase to friends,

family members on social

media or chat apps

Convenience of door

step delivery

78%

Anytime

purchase

67%

Easy access to multiple

brands/products

42%

What

lacks in

offline?

Immediate availability

of product

55%

Ability to see, touch

and try merchandise

39%

Ability to easily return

items

34%

What

lacks in

online?

Anytime purchase

Convenience of door

step delivery

Easy access to multiple

brands/products

81%

63%

51%

What

lacks in

offline?

Immediate availability of

product

Ability to easily return

items

Ability to see, touch

and try merchandise

59%

44%

41%

What

lacks in

online?

E-tailers and traditional players are adopting strategies to offer the best

of both channels to their target consumers

Purchase channel preference Post purchase activities

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

33

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

34

Friction Busting -

Increasing Sales

Opportunity With

Mobile

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35

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

36

By 2022, mobile internet users in India are expected to rise to 677 million from 420 million users in 2017

[1]

. Nearly 65 per cent of apparel purchases in 2022 are expected to

be mobile-influenced, while nearly one out of three purchases is expected to be Facebook-influenced, each growing nearly three times. This growth is expected to be driven

on the back of organic penetration of internet, social media and digital technologies over the next five years. Brands, therefore, have a USD66 billion opportunity to re-look

at their marketing strategies and adapt to the fast-evolving mobile-first internet economy of India. Further, a mobile-enabled apparel purchase journey is shortened by at

least five days (14 per cent) as compared to a pure offline journey.

Mobile-enabled journeys are 14 per cent shorter. By 2022, mobile is

expected to influence ~2 in 3 apparel purchases, half of which are

expected to be driven by Facebook

Mobile influence

2.6x

USD66

billion

2017 2022

e

[2][3]

USD26

billion

47%

44%

58%

49%

62%

59%

73%

65%

Average

influence

Awareness

Consideration

Intent

Sales

opportunity

within

category

Facebook influence

2.7x

USD35

billion

2017 2022

e

[2][3]

USD13

billion

21%

24%

27%

24%

31%

35%

38%

34%

Average

influence

Awareness

Consideration

Intent

Sales

opportunity

within

category

Purchase journey in days

38 days

33 days

Offline

purchase

Mobile-enabled

purchase

Sources:

[1] [2] Internet users to touch 420 million by June 2017: IAMAI

report, Economic Times, May 2017; Internet users in India expected

to reach 500 million by June: IAMAI, Economic Times, Feb 2018;

eMarketer Forecasts Strong Growth in Facebook Users in India,

eMarketer, June 2017

[3] Apparel and Footwear in India, Euromonitor, February 2018;

KPMG in India's analysis, 2018 based on data obtained from

multiple industry reports and primary survey conducted by Nielsen,

2018

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

37

By 2022, mobile internet users in India are expected to rise to 677 million from 420 million users in 2017.

[1]

More than 70 per cent of fashion accessories purchases in 2022

is expected to be mobile-influenced, while more than one-third of fashion accessories purchases in 2022 are expected to be Facebook-influenced, growing 2.5 times and

nearly three times, respectively. This growth is expected to be driven on the back of the organic penetration of the internet, social media and digital technologies over the

next five years. Brands, therefore, have a USD110 billion opportunity

[2][3]

to re-look at their marketing strategies, and adapt to the fast-evolving mobile-first internet economy

of India.

Mobile-ending journeys are 25 per cent shorter. By 2022, ~7 in 10

fashion accessories purchases are expected to be mobile-influenced,

nearly half of which are expected to be driven by Facebook

Mobile influence

2.5x

USD110

billion

2017 2022

e

[2][3]

USD43

billion

53%

51%

65%

56%

68%

66%

79%

71%

Average

influence

Awareness

Consideration

Intent

Sales

opportunity

within

category

Facebook influence

2.8x

USD59

billion

2017 2022

e

[2][3]

USD21

billion

25%

23%

32%

27%

36%

34%

44%

38%

Average

influence

Awareness

Consideration

Intent

Sales

opportunity

within

category

Purchase journey in days*

26 days 19 days

Sources:

[1] [2] Internet users to touch 420 million by June 2017: IAMAI

report, Economic Times, May 2017; Internet users in India expected

to reach 500 million by June: IAMAI, Economic Times, Feb 2018;

eMarketer Forecasts Strong Growth in Facebook Users in India,

eMarketer, June 2017

[3] Apparel and Footwear in India, Euromonitor, February 2018;

Apparel Accessories in India, Euromonitor, February 2018; KPMG in

India's analysis, 2018 based on data obtained from multiple industry

reports and primary survey conducted by Nielsen, 2018

*In case of fashion accessories, offline purchases includes all

purchase journeys where the purchase ends at offline channel, and

mobile-enabled purchase includes all purchase journeys where the

purchase ends at online channel

Offline

purchase

Mobile-enabled

purchase

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38

Methodology - Friction reduction

by enhancing the media mix

Interpret media-related friction individually at each

stage of the journey — awareness, consideration

and intent

Calculate potential friction reduction

opportunity for areas where mobile can help

bring down friction

Calculate potential opportunity for a brand to

reduce friction in future by enhancing mobile in

the media mix

Recommend feasible and scalable approaches on

the basis of identified friction areas and possibility

of technology fitment

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

39

Note: KPMG in India's analysis, 2018 based on primary survey conducted by Nielsen, 2018

For all three stages - awareness, consideration and intent - the reduction in friction on offline media is based on the weighted average of friction

scores for all online media, obtained from primary research

The calculation took into account the reduction in friction that could be achieved if offline friction percentages are replaced with the weighted averages of

online media. It has been assumed that the values of online media can be used as a proxy for mobiles since nearly 95 per cent of the online usage happens via mobile devices

2017

Media

friction

2022

e

Media

friction

Friction points

2022

e

Media

friction

2017

Media

friction

Friction points Friction points

28% 32% 24%

Awareness friction Consideration friction Intent friction

2017

Media

friction

2022

e

Media

friction

63%

44%

28%

27%

24%

22%

60%

55%

41%

23%

22%

18%

17%

39%

28%

24%

20%

16%

Prospect finds too little

information from ads

Prospect did not understand the

language of the ad

Product/brand was not

relevant to the prospect

The advertised product was not

meant for the prospect

Prospect does not know what to

do next after watching ads

Prospect did not pay enough

attention to ads

Offer communication was not

clear

No expert advice/answers

available

Prospect does not trust the

medium as source of information

Prospect was suggested

another option because of

which he/she switched

Prospect does not find it easy to

browse/find information required

Product looks different on the

screen than actual

Unable to touch and feel the

product

Prospect does not trust the

medium

Unable to touch and feel the

product

The same price was no longer

available or the offer had expired

Salesperson/customer service

agent could not address all queries

Prospect found a better

price/option elsewhere

Not able to easily contact

shopping websites/brands

customer service centre

The right size was no longer

available

Prospect found it difficult to

express interest/buy instantly

Prospect was not given all the

relevant information

16%

14%

Prospect did not find the ads to be

appealing

19%

17%

14%

Payment schemes/options

available are not enlisted

Offer communication was not

clearly mentioned

17%

Unpleasant experience with the

medium in the past

15%

Prospect does not find all the

relevant information

Mobile has the potential to reduce media friction by 3 percentage

points across the apparel purchase journey

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40

Note: KPMG in India's analysis, 2018 based on primary survey conducted by Nielsen, 2018

For all three stages - awareness, consideration and intent - the reduction in friction on offline media is based on the weighted average of friction

scores for all online media, obtained from primary research

The calculation took into account the reduction in friction that could be achieved if offline friction percentages are replaced with the weighted averages of

online media. It has been assumed that the values of online media can be used as a proxy for mobiles since nearly 95 per cent of the online usage happens via mobile devices

2017

Media

friction

2022

e

Media

friction

Friction points

2022

e

Media

friction

2017

Media

friction

Friction points Friction points

43% 40% 18%

Awareness friction Consideration friction Intent friction

2017

Media

friction

2022

e

Media

friction

100%

63%

38%

35%

32%

29%

78%

53%

52%

42%

36%

35%

27%

24%

23%

20%

19%

15%

14%

13%

Prospect does not know what to

do next after watching ads

Prospect finds too little

information from ads

Ads were not appealing for the

prospect

Prospect did not pay enough

attention to ads

Prospect does not trust the

medium as source of information

Product/brand was not relevant

to prospect

No expert advice/answers

available

Offer communication was not

clear

Prospect does not trust the

medium as source of information

Prospect does not find all the

relevant information

Too many brands/shopping

websites are advertised for

The right size of the product

was not identified

Product looks different on the

screen than actual

Prospect found a better

price/option elsewhere

Prospect does not trust the

medium

Salesperson/customer service

agent could not address all my

queries

Prospect does not find all the

relevant information

The right size was no longer

available

The same price was no longer

available or the offer had expired

Prospect found it difficult to

express interest/buy instantly

Prospect was not able to easily

contact shopping website’s/brand’s

customer service centre

Unable to touch and feel the

product

29%

The advertised product was not

meant for the prospect

28%

Offer communication is not

clearly mentioned

28%

Payment schemes/options

available are not enlisted

32%

Unable to touch and feel the

product

32%

Prospect does not find it easy to

browse/find information required

Mobile has the potential to reduce media friction by 4 percentage

points across the accessories purchase journey

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

41

Source: Digital Advertising in India 2018, Dentsu Aegis Network,; Apparel and Footwear in India, Euromonitor, February 2018; KPMG in India's analysis, 2018

Methodology: The projection is based on estimated ratio of average cost of consumer acquisition for online and offline medium in apparel industry. The ratio is assumed to be consistent in

2022, and is used to project incremental spend on mobile based digital advertisement to tap about USD14 billion opportunity

*This number can be achieved by reducing the friction, thus increasing the addressable market opportunity

Replacing less-efficient offline media touch-points with mobile-based advertisement solutions could create opportunity of about USD14 billion between fashion brands

(apparel and fashion accessories), and could create value for fashion marketers by reducing their average cost per acquisition (CPA) of consumers by up to five per cent.

CPA of mobile-based digital mediums is today only a fraction of traditional mediums. Therefore, incremental spend on digital mediums could offer a better experience to

the consumers and higher economic value to the marketers.

Awareness

Consideration

Intent

Purchase

Apparel Accessories

2022

e

9%

1.5%

6%

2017

12%

2%

8%

2%

3 percentage

point reduction

in friction

28%

reduction

in friction

32%

reduction

in friction

24%

reduction

in friction

2022

e

9%

2%

1%

6%

2017

13%

3%

8%

2%

4 percentage

point reduction

in friction

43%

reduction

in friction

40%

reduction

in friction

18%

reduction

in friction

~USD5 billion*

sales opportunity for brands

5%

Reduction in consumer acquisition cost

by moving spends from traditional media

like print, outdoor and radio to mobile

~USD9 billion*

sales opportunity for brands

Mobile in media mix can help fashion brands tap into ~USD14 billion

sales opportunity and reduce average CPA by 5 per cent

Consideration

friction

Intent friction

Awareness

friction

Consideration

friction

Intent friction

Awareness

friction

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42

*This number can be achieved by reducing the friction, thus increasing the addressable market opportunity

Mobile-influenced opportunity of about USD190 billion in fashion path to

purchase

2017 2022

e

Mobile-

influenced

market

Market

opportunity

through friction

reduction

Apparel Accessories

USD26

billion

USD43

billion

Apparel Accessories

USD66

billion

USD110

billion

Apparel Accessories

USD5

billion

USD9

billion

USD176 billion*

~USD14 billion*

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

43

Incremental spend on mobile medium could reduce cost of consumer

acquisition by 5 per cent for fashion brands

Awareness

Consideration

Intent

Purchase

Friction

points

Friction

busters

Prospect did not

pay enough

attention to ads

Operating at 2-3+ frequency to land

key product attributes using reach

and frequency

Leverage power of influencers

Prospect does

not know what

to do next after

watching ads

Clear ‘Call to Action’ leading to

product interactions

Geography-based suggestions on

brand stores

Offer

communication

is not clear

Instead of discount ranges, provide

specific information about absolute

money saved or percentage of

discount

Personalised offers and bundling

based on historical preferences,

search-trends, etc

Prospect does

not trust the

medium as

source of

information

Partner with multiple affiliates,

stores, channels to promote the

brand

Unable to touch

and feel the

product

Product demos, 360 degree

videos, in-depth product write-ups,

short form videos and carousel ads

to demonstrate products

Prospect found a

better

price/option

elsewhere

Call out reasons-to-buy and if

after-sales, warranty is applicable,

mention it upfront, along with

customer testimonials

Provide communication around

money refunds, customer safety

processes, service and warranties

Lack of trust at

the point of sale

Consideration

friction

Consideration

friction

Intent

friction

Intent

friction

Awareness

friction

Awareness

friction

Friction

points

Friction

busters

Prospect finds

little information

from ads

Simplified story telling by sequential

steps, product comparison

features, expert opinion/query

AR/VR based tools for experiencing

life-like look-and-feel of the product

Not able to get

credible/clear

advice

Blogs, articles, customer reviews,

especially for new products or

brands

Leverage power of influencers

Prospect does

not find requisite

information

Product demos, 360 degree videos,

in-depth product write-ups, short

form videos and carousel ads to

demonstrate products

Same price was

no longer

available or the

offer had expired

Mention time sensitive nature of

product, over-communicate during

sale period

Prospect was not

able to easily

contact shopping

websites or

brand’s customer

service centre

Provide easy contact options -

WhatsApp, messenger, phone and

others

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44

Zero Friction

Future -

Reimagining

The Purchase Journey

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45

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46

Awareness

Consideration

Intent

Purchase

Mobile will change the

consumer ’s journeys

A zero friction future

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47

Personalised suggestions on brands and style

based on digital interactions in the form of

searches, visits, video views and clicks

One-click purchase from e-commerce websites

and online portals

AI-driven bundling of apparel and fashion

accessories where system recommendations can

lead to cross-selling or up-selling

Home pick-up and delivery in case of product

return or exchange

Video or 360–degree video content on website to

provide aesthetic, functional and emotionally-

appealing motivations to customers

Messengers to facilitate payments/purchase while

browsing for apparel/fashion accessories on social

media

Personalised offers based on customer data and

purchase history

Virtual Reality and social media being used to

bring experiences from ongoing fashion events to

the consumers in stores/through online sites

Social media-based ‘brand community’ and real-

time interaction with fashion designers, stores and

shoppers

Online and chat-bot-assisted buying, stock

availability checks before visiting stores

Custom-made apparel/fashion accessories

Personalised fitting experience with size

recommendation engines in virtual changing rooms,

AR-based apps for fashion accessories

Localised language content and website

interaction to ensure a seamless buying

experience online

‘Try and Buy’ offer to try the products at home

before making a payment to purchase them

Consumers for this category no longer belong to a homogenous segment. This has led to emergence of different pathways, with digital playing a key role in shaping most,

if not all, pathways. With increased adoption of digital, rapid enhancement in consumer friendly technology such as AR/VR, consumer analytics through AI, machine

learning and personalised offers, the path to purchase is expected to be shorter and seamless. With this increasingly non-linear journey we are gearing up for a frictionless

future.

Re-imagine fashion path to purchase

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48

Phase 2: Deep dive

• Purposive sampling to recruit

respondents for each category

and cohort

• Each cohort helped provide

detailed information at different

stages in the purchase journey

Aware non-considerers

Considerers

Intenders

Buyers

Reasons for

non-consideration

Influence of media

touch points

Reasons for friction

Influence of media

touch points

Reasons for friction

Analysing different

paths to purchase

Influence of touch points

Reasons for friction

Primary research methodology

The study entails the following approach to identify in-depth understanding of

the consumer purchase journey and friction areas therein

Primary research was undertaken by Nielsen India to cover the overall

purchase journey of a consumer and to understand the friction points at each

step of the journey. The study is based on random listing study on 3,000

respondents to understand the proportion of the population that falls at each

stage of the journey. Deep-dive study for fashion category was conducted on

1,025 respondents split as:

Primary interviews

Detailed interviews were conducted with sector experts to understand key

industry trends, friction areas, future pathways and outlook.

Secondary research

Detailed secondary research was undertaken to understand the apparel and

fashion accessories industry, market growth and future trends.

• NCCS — New Consumer Classification System

• Listing exercise conducted to derive the dropouts at each stage of the journey for the

categories separately among randomly selected respondents

• Size of the cohorts from listing was used as weighting inputs for the outputs from the

quantitative deep dive

• Base has been considered as those who are aware of the category and are either primary

decision makers/have actively contributed to the decision-making process

• Apparel Buyers – Aware Decision Makers who have purchased or tried to purchase a clothing apparel in the last 3 months

• Apparel Considerers – Aware Decision Makers who have considered purchase of a clothing apparel in the last 3 months but have yet not purchased

• Apparel Aware non-considerers – Aware Decision Makers who have not considered purchase of a clothing apparel in the last 3 months

• Accessories Buyers – Aware Decision Makers who have purchased or tried to purchase a male and(or) female fashion accessories in the last 3 months

• Accessories Considerers – Aware Decision Makers who have considered purchase of a male and(or) female fashion accessories in the last 3 months but have

yet not purchased

• Accessories Aware non-considerers – Aware Decision Makers who have not considered purchase of a male and(or) female fashion accessories in the last 3

months

Primary research methodology

Phase 1: Listing

Aware decision makers

Considerers

Intenders

Buyers

Loss due

to friction

(%)

Loss due to

friction (%)

Loss due

to friction

(%)

Total population

• Listing exercise was conducted to better

understand the proportion in the universe that

falls under each individual cohort at any given

time and to derive the size of these cohorts to

be applied in the deep dive phase

• A large-scale listing study was conducted to

capture incidence of respondents falling

under the different cohorts of consumers, i.e.,

buyers, considerers and aware non-

considerers

Category Gender

Age group

(years)

NCCS* Cities

Apparel:

547

Male:

430

18-24:

367

NCCS A:

744

Mumbai: 179

Delhi: 137

25-34:

414

Bengaluru: 141

Fashion

accessories

478

Female:

595

NCCS B:

281

Chennai: 161

35-49:

244

Kolkata: 171

Pune: 236

Methodology

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49

ABOUT KPMG IN INDIA ABOUT FACEBOOK ABOUT NIELSEN

KPMG in India, a professional services firm,

is the Indian member firm affiliated with

KPMG International and was established in

September 1993. Our professionals

leverage the global network of firms,

providing detailed knowledge of local laws,

regulations, markets and competition.

KPMG in India has offices across India in

Ahmedabad, Bengaluru, Chandigarh,

Chennai, Gurugram, Hyderabad, Jaipur,

Kochi, Kolkata, Mumbai, Noida, Pune and

Vadodara.

KPMG in India offers services to national

and international clients in India across

sectors. We strive to provide rapid,

performance-based, industry-focussed and

technology-enabled services, which reflect

a shared knowledge of global and local

industries and our experience of the Indian

business environment.

Founded in 2004, Facebook's mission is to

give people the power to build community

and bring the world closer together. Over

2.2 billion people globally use Facebook

every month to stay connected with friends

and family, to discover what's going on in

the world, and to share and express what

matters to them. Millions of businesses, big

and small, use Facebook's apps and

services to connect with real people and

grow their business.

Rooted in what we’ve learned from over 2

billion people on our platforms and the 6

million businesses that advertise with us,

Facebook IQ provides actionable insights

about people, marketing and measurement.

We offer studies, tools and resources built

to transform how marketers reach people

and deliver real results in this cross-

channel, multi-device world.

Whether you need inspiration for your next

big idea, research on how best to reach the

people that matter most, or the latest in ad

effectiveness, lean on Facebook IQ for

insights and strategies.

Nielsen Holdings plc (NYSE: NLSN) is a

global performance management company

that provides a comprehensive

understanding of what consumers watch

and buy. Nielsen’s Watch segment provides

media and advertising clients with Nielsen

Total Audience measurement services for

all devices on which content — video, audio

and text — is consumed. The Buy segment

offers consumers, packaged goods

manufacturers and retailers the industry’s

only global view of retail performance

measurement. By integrating information

from its Watch and Buy segments and other

data sources, Nielsen also provides its

clients with analytics that help improve

performance. Nielsen, an S&P 500

company, has operations in over 100

countries, covering more than 90 percent of

the world’s population. For more

information, visit www.nielsen.com

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50

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

51

KPMG in India’s team:

Sreedhar Prasad, Aditya Rath, Vrinda

Narang, Angad Singh, Dipesh Agarwal,

Priyam Modi, Piyushi Singh, Rahul

Kathuria, Nisha Fernandes, Vivek Malekar

Nielsen India:

Anupam Asthana, Kejal Gosar,

Priyanka Awasthi

Acknowledgements

© 2018 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG in India contacts

Mritunjay Kapur

National Head, Markets & Strategy

Head – Technology Media & Telecom

T: +91 124 307 4797

E: mritunjay@kpmg.com

Arvind Gupta

Head, Management Consulting Advisory

T: +91 124 336 9463

E: arvindgupta1@kpmg.com

Harsha Razdan

Partner & Head, Consumer Markets

T: +91 22 6134 9663

E: harsharazdan@kpmg.com

Sreedhar Prasad

Partner & Head – E-Commerce and Internet

T: +91 80 3065 4055

E: sreedharprasad@kpmg.com

Aditya Rath

Partner, Customer and Channel

T: +91 22 3090 2580

E: adityarat[email protected]om

Facebook in India contacts

Sunita G.R

Head of Marketing – India

E: sunitag[email protected]

of independent member firms affiliated with KPMG International Cooperative (“KPMG

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

This document is for e-communication only

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