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Fashion Is at Tipping Point: How Brands Can Transform

Trends and Insight 128 Add to collection
Head of New York commerce at VMLY&R Charlie Wade discusses how fashion brands can manoeuvre through the current crisis
Fashion Is at Tipping Point: How Brands Can Transform
Like so many industries, the Coronavirus has hit fashion hard, yet the last few weeks alone have seen more major upheaval than the decades that preceded them. The first sign that there was a desire for real change came from a group of prominent CEOs – including Tory Burch and Dries Van Noten – who jointly agreed upon 'a shared vision; to discuss ways in which our business needs to transform'. Just days later in an unusual move, the British Fashion Council (BFC) and Council of Fashion Designers of America (CFDA) joined forces to call for a new approach and new ways of thinking once the Coronavirus crisis has passed. And two weeks ago, Gucci announced that it would remove seasons entirely.

If the timing for these massive changes is understandable, then maybe the reasons are less so. Put simply, the business is facing a mounting inventory problem, with apparel and footwear lying around in stores that no one can access. Whilst eCommerce has picked up some of the slack, fashion has not seen the meteoric rise of eComm that grocery has, for instance. Moreover, when shops do reopen, retailers will have to make tough decisions about how to unload their stock, from marking-down heavily, thereby losing margin; trying to shift to large resellers; giving it away; or burning or discarding it.

More widely, fashion’s challenges have been growing for some time – and credit should go to those who are calling them out. The top issues fashion must tackle to transform the industry once and for all are the calendar, the production times, rental and resell, markdown, and physical spaces.

The Calendar
Initially based around two key moments – fall/winter and spring/summer – in recent years this number has grown to five, with each typically punctuated by large-scale runway shows. These micro-seasons create ever-transient trends that are shorter and shorter in lifespan, requiring huge volumes of inventory to keep up and leading to ‘last season’s’ items being discarded at an ever-quickening pace. Indeed, even the aforementioned CEO letter calls for 'a more balanced flow of deliveries through the season to provide newness, but also time for products to create desire'.

Production
Another reason that seasons are becoming less relevant is that production times are speeding up; in turn, this reduces the need for the huge orders of yesteryear. The industry can solve this challenge through technology; technology should allow for limited runs that are tested in-market, with the strongest re-made. Moreover, brands need to ramp up the use data and AI to predict what will sell – rather than basing decisions on gut-feeling – to reduce the volume of discounted or unsold items. 

Rental and resell
Fashion is a significant contributor to the environmental issues that the world faces, from water usage and materials, to dyes and shipping. As such, consumers - especially those amongst Gen Z - are looking to resale markets. Brands should embrace the popularity of resell sites, like Walmart which partnered with ThredUP, or create their own versions, as Nordstrom initiated earlier this year. Moreover, the idea of styling and restyling, rather than simply refreshing a wardrobe, could give a renewed impetus and role to the magazines that used to dominate the minds of consumers. 

Markdown
Many of the labels that find themselves in a tricky position today are the ones that have embarked down a road of heavy discounting. These brands have an opportunity to work hard to remove this reliance: can smaller runs be A/B tested in-market, with those that work repeated and put back on-shelf? Endless promotional moments lead to consumer confidence erosion, both in the quality of the item and its listed price (why buy now, when it will be reduced next week?). Now is the time to extend the product lifecycle so that items are deemed 'fashionable' for longer, reducing the need to discount to clear items.

Physical Spaces
It is hard to predict a post-Coronavirus world, yet it appears likely that people will be a little wary of going back into stores and certainly they will require space. This is a moment to reformat the layout of shops; reduce the reliance on cramming them to the rafters with clothing, which will simultaneously facilitate social distancing and elevate the customer experience. Brands should think about in-store services and interactions they can offer that cannot be found online or via a competitor – be it payment options (contactless), appointments, or exclusives.

Diversity
Consumers have increasingly expected higher standards from brands that they buy, and events in the US and the protests around the world have brought the issue of representation into focus. Whilst the initial donations and actions have been a start, companies will need to make structural changes, such as the businesses they buy from, diversity of employees, and inclusivity. Early examples include Rent the Runway pledging that 15% of the talent it features – from models to camera crews – will be from the black community, and adidas aiming for '50% of all new positions [jobs] will be filled with diverse talent'. The need for diversity will extend beyond communications into company culture.

This is a huge moment for the industry to confront many of the issues that have crescendoed for some time. It will require players to adopt new processes; to be creative; to love the craft. Yet these qualities have always been evident. Collaboration and a desire to make the changes are what will ensure the long-term success fashion and the brands that consumers love. 


- Charlie Wade, head of New York commerce at VMLY&R
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Categories: Clothing and Fashion, Fashion Platforms

VMLY&R - North America, Fri, 31 Jul 2020 15:25:08 GMT