It’s Time To Let Go of Fashion’s Past
We’ll start with the problem that everyone is aware of already, and the most jarring proof that our current way of operating is broken – and that is the vicious cycle of overstocks and discounts we face today.
As an industry, we have millions worth of unsold clothing sitting in containers, which cost more to store than to dispose of. Think about that for a moment.
To solve this problem, we need to understand why it exists. Pre-social media, fashion was largely a supply-led market, meaning brands and retailers put the products they wanted into stores, on schedules they chose. Consumers then bought up what was available at the shops they had access to. An example is the way coats and jackets for Fall and Winter started arriving in stores at the end of the summer, long before the weather turned cold.
But with the advent of social media and e-commerce, shoppers gained instant access to a wealth of information and choices. Consumers today can shop anywhere and compare prices on anything, amplifying the competition among brands for their dollars. While a steady stream of images and products continuously fill their social feeds, driving a ravenous desire for new stuff that they expect brands to satisfy immediately.
Demand, not supply, has become the controlling force.
This change has put brands in the position of always trying to keep up with an appetite for newness, but many still have not figured out how to do it efficiently. Often the long lead times of supply chains mean they still have to produce huge amounts of clothing months in advance to fill their shops, leaving brands guessing far ahead of time what shoppers will want, and not always accurately.
Over the past several years, brands have leaned on markdowns to clear that extra stuff. But in doing so, they’ve led shoppers to expect regular sales. Analysts believe the Great Recession was also a major factor in this pattern of behaviour. Many people now buy only when a product is discounted, cornering brands into offering earlier and bigger deals to keep them interested.
And lastly, we look internally more than we look externally. We analyse what we sell on a regular basis, but we do not have visibility into what our competitors sell, or more importantly, what they did not sell.
Our customers do.
They analyse, shop and compare. But we do not. We need to look externally, to build internally. In a demand-led market, we need to thoroughly understand demand, as well as we understand supply.
The way out of this situation is not easy. To be competitive, brands still need to feed that appetite for new products, but in a way that does not leave them with a big pile of unsold clothes.
More digitally savvy brands are dropping new products closer to what we define as seasons today.
Amazon understood early on that young shoppers, in particular, tend to search by product, rather than seek out specific brands. This means if our customers are demanding a white linen dress, but we don’t supply that demand, we would never know the demand existed. To combat this, we have to look regularly at the market, not to compare ourselves, but to understand demand and supply opportunities.
Brands also need to get shoppers excited about their releases and find ways to stand out from the pack, a tactic many streetwear labels excel in. Shoppers have a sea of options to choose from and many are less concerned about the brand than getting what they want at the best price. This is part of the reason why retailers’ private labels have been so successful, retailers created these labels from a necessity to meet existing demand.
Which brings us to what we can do today.
Demand, not supply, has become the controlling force. Now we must look externally to better understand our positioning internally. We do not compare ourselves against the competition, we look externally to understand what is being demanded that we are not supplying and use these insights to create consumer-driven collections that meet their needs effectively – the exact purpose of Fashion Market Insights.
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