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Assortments in Fashion E-Commerce Assortments in Fashion E-Commerce A Comparative Characterization of Leading Online Fashion Retailers in the German Market Larissa Finsler and Peter Bug Reutlingen January 15th, 2019 Reutlingen University, Alteburgstraße 150, 72762 Reutlingen Keywords: fashion assortments, fashion e‐commerce, digital assortments, assortment policy, assortment planning, assortment analysis, market analysis, fashion merchandising, retail marketing Abstract Purpose of the research paper is to illuminate the subject of assortment policy in the German fashion e‐commerce market. A short literature review is conducted in order to set up a system of characteristics to contemplate assortments on a strategic level. In a second step, structured observations are conducted to quantitatively analyze and compare the assortments of the leading online fashion retailers within Germany. Based on literature, the following characteristics for a classification of assortments can be identified: assortment structure, assortment size, assortment width, assortment depth, assortment consistency and rotation, price level, quality mix, fashion degree as well as the mix of private labels and manufacturer brands. Furthermore, the results of the empirical analysis show that there are currently five leaders within the analyzed market: Amazon, Otto, Zalando, Baur and About You. Among these five market leaders, Amazon positions itself as a retailer that not only offers an enormous assortment size, but also the lowest entry prices as well as the broadest price dispersion. Through the development of the system of characteristics for assortment analysis and the examination of the current market environment, the findings of this paper contribute to the current state of the art in both theoretical and practical aspects. Assortments in Fashion E-Commerce List of Tables List of Contents List of Tables ..................................................................................................................................................... III List of Figures ..................................................................................................................................................... 1 1. Problem Definition and Relevance ................................................................................................................ 2 2. State of the Art .............................................................................................................................................. 2 3. Empirical Research ........................................................................................................................................ 4 4. Discussion .................................................................................................................................................... 21 5. Conclusion ................................................................................................................................................... 24 List of References .............................................................................................................................................. V Appendix ............................................................................................................................................................ X List of Appendices .............................................................................................................................................. X Appendix A: Ranking of the Top 50 Online Shops for Fashion and Shoes in Germany ................................... XII Appendix B: Final Sample for the Empirical Analysis ...................................................................................... XV Appendix C: Category System Macro Analysis ............................................................................................... XVI Appendix D: Data Base Macro Analysis ......................................................................................................... XVII Appendix E: Assortment Sizes of the Analyzed Sample Within the Macro Analysis .................................... XXIV Appendix F: Data Base Micro Analysis .......................................................................................................... XXV Appendix G: Offered private labels .............................................................................................................. XXXI List of Tables Table 1: Assortment level research matrix ........................................................................................................ 5 Table 2: Assortment dimensions at the macro level ......................................................................................... 9 III Assortments in Fashion E-Commerce Problem Definition and Relevance List of Figures Figure 1: Leading online fashion retailers regarding assortment size ............................................................... 7 Figure 2: Assortment breadth for analyzed categories ................................................................................... 10 Figure 3: Average number of articles displayed per category ......................................................................... 11 Figure 4: Shares of articles offered in depth ................................................................................................... 12 Figure 5: Average number of color options ..................................................................................................... 13 Figure 6: Assortment size at micro level ......................................................................................................... 14 Figure 7: Price dispersion bootcut jeans ......................................................................................................... 15 Figure 8: Price dispersion midi dresses ........................................................................................................... 15 Figure 9: Price dispersion leather skirts .......................................................................................................... 16 Figure 10: Price levels at Amazon, Otto, Zalando, Baur and About You ......................................................... 17 Figure 11: Average prices for Amazon, Otto, Zalando, Baur and About You .................................................. 17 Figure 12: Number of private label items offered within the analyzed categories ........................................ 18 Figure 13: Share of private label products within the analyzed categories .................................................... 19 Figure 14: Fashion degree offered .................................................................................................................. 20 1 Assortments in Fashion E-Commerce Problem Definition and Relevance 1. Problem Definition and Relevance In 2018, the turnover generated in Germany through business‐to‐consumer e‐commerce amounted to approximately 63,700 million euros. In a global comparison, Germany ranks fifth with this turnover and the market volume is expected to grow by 6.9% annually until 2022. Thereby, fashion generates the second highest turnover (Statista, 2018).1 In this growing digital environment with enormously intense competition, it is essential for retailers to clearly distinguish themselves from others. Especially in the fashion industry, which is characterized by its low predictability, short life cycles and high competitive density, the need for this differentiation is intensified even further (Christopher, Lowson, & Peck, 2004). In this context, a strategically elaborated assortment policy can be a successful instrument for clear positioning and profiling (Möhlenbruch, 1994; Ahlert & Kenning, 2007). There exists a wide range of literature about assortment policy and assortment planning. However, most of the literature contains theoretical approaches and there hardly is any transfer of concepts from classic retail marketing to e‐commerce or to the fashion industry. This paper is intended to contribute to closing this research gap and to use the elaborated principles of assortments and assortment policy to provide a descriptive image of assortments in the online fashion industry in Germany. For this purpose, assortments of leading online fashion retailers in Germany will be examined based on characteristics found in the literature with the aim of creating a descriptive overall picture of the fashion e‐commerce market. The following research questions arise from the objectives: Which criteria can be used to characterize fashion assortments? How are the assortments of the leading online fashion retailers in Germany structured regarding the characteristics found in the literature? 1 This source represents a digital market outlook within which Statista itself conducted primary research. 2 Assortments in Fashion E-Commerce State of the Art 2. State of the Art 2.1. Assortment Characteristics The most often discussed elements to characterize assortments are assortment breadth and depth. In general, assortment breadth is characterized by the fact that different needs can be satisfied with one single purchasing process and that additive purchasing options are offered. On the contrary, assortment depth provides alternative purchasing options for customers (Theis, 2007). In this context, Hart & Rafiq (2006) consider two perspectives for analyzing assortments. The macro perspective represents the assortment at store level whereas the micro
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