We’re All Fashionistas Now
Consumers are wielding profound power in fashion retail thanks to the digital revolution. Retailers who adopt a “customer first” approach are best positioned to meet expectations. Those who resist risk losing their shirts.
Just a few years ago, the runway belonged exclusively to the designer. Visionaries like Tom Ford or Chloé or Burberry paraded their seasonal collections before elite crowds and months later, their fabulous creations would appear in store windows and on the bodies of the au courant.
Today, the runway is more of a two-way street, with the public exerting its influence through the power of social media almost the moment a model struts by. Everyone, it seems, is a fashionista now, freely sharing opinions about style on fashion blogs and on platforms like Twitter and Instagram, throughout a garment’s entire life cycle, from the initial runway show to the day it hits store shelves.
Like other industries, the digital revolution has had a disruptive impact on fashion retail with insiders trying to figure out how best to engage with, and please, the newly empowered customer—especially those in the Millennial generation. Retailers are seizing the opportunity to leverage their customers’ fashion sense to gain insights not only into what the best sellers might be next fall, but—in a sign of the digital times—what they can produce now and sell within the current season. This latter shift, variously known as fast fashion, buy-now-wear-now, or seasonless, fits the lifestyle of a generation that demands instant gratification.
Fast fashion makes a lot of sense if you stop and think about it. When designers show their fall fashions in mid-February, shoppers aren’t thinking about falling leaves. They’re thinking about spring buds, warmer weather and the trends to match. Why can’t they buy the fashions they like and want right away?
Adjusting to a New Supply Chain
It’s easier said than done. Traditionally, it takes 40 or more weeks to move from concept to a customer’s closet. Along the way, numerous stakeholders—from design, to textile sourcing, to manufacturing, to shipping—contribute to a well-established supply chain that ultimately puts the clothes on our backs.
Ramping up to fast fashion requires a strong leadership team that can facilitate buy-in and cooperation from the stakeholders right from the start. They must be in agreement on a compressed schedule and work in concert to execute the plan. That can be a challenge, especially when links in the chain are used to operating at their own speed.
Understandably, some of the newer retailers are in a good position to succeed right from the start. Zara and H&M are two fast-fashion outlets essentially built from scratch to deliver immediately wearable apparel. By combining the design, prototyping, and approval stages into one, plus careful sourcing, they cut many weeks out of the schedule. Manufacturing in small batches domestically also speeds the process. On a more micro scale, and in keeping with the age of digital disruption, online retailer Betabrand Clothing allows customers to crowd-source apparel concepts into retail products. With the design and approval stage already built in, delivery of final product to the customer can take as little as one to two months.
All that progression can leave the established houses such as Burberry or Tommy Hilfiger scrambling to keep up. For these titans, a piecemeal approach can ease the way and allow for experimentation to see how the supply chain responds. Indeed, Burberry announced earlier this year that it was cutting back from four to two runway shows and would include seasonless men’s and women’s clothing in both, subsequently making the pieces available for sale immediately in stores and online. This is a fresh approach that allows the $7.54 billion British behemoth to maintain the balance between its luxury lines and hot trends for its customers.
Jumping on the Fast Fashion Bandwagon
As with all industries disrupted by the digital age, new software tools designed to boost efficiency and potentially improve the product lifecycle seem to arrive almost daily. But to fully seize the opportunity, smart retailers need to forge informal partnerships with the base and understand their needs before launching into production. These four strategic imperatives are a good starting place:
1. Adopt a customer-first mindset.
The key to retail success in today’s challenging fashion industry requires the same kind of disruptive thinking that comes naturally to customers. Retailers must be aware of how their customers interact with their brand from awareness through advocacy, and how the brand’s actions, or inactions, affect engagement. From here, marketing can better align objectives and actions.
2. Know the customer.
It’s not just about counting customers anymore, it about knowing who they are by digging deep into the metrics and understanding patterns. What drives them? What styles resonate with them? What are the differences among various segments of the base, and how does each choose to spend his or her dollar and how often? These metrics aren’t new, but leveraging them is more critical than ever.
3. Embrace social selling.
Today’s consumers love to interact with brands—for better or worse. Providing a forum, whether a blog or a news site, that offers retailer insights into styles or company happenings engages customers and helps them feel involved and valued.
4. Shorten product lifecycle process.
Is the process, and supply chain, moving quickly enough to react to customers’ needs? Retailers who understand customer fashion preferences but lack the ability to react quickly and produce the goods will soon become frantic. Foresight means less work at the end stage.
The competitive landscape in fashion retail is constantly evolving and the fast-forward movement can feel daunting. But for retailers who embrace it and learn to manage the risks wisely, the rewards in higher sales and profits may pay off.
Christa Hart is a Senior Managing Director at FTI Consulting and is based in New York. She is member of the Retail & Consumer Products practice with more than 15 years of hands-on experience focusing on improving and growing financial performance in retail and direct selling companies.
© Copyright 2016. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
Senior Managing Director