In our most recent article, we discussed the newest trend in retail — going hybrid. The reality of the marketplace makes having control over the value chain a necessity for fashion brands, retailers and manufacturers; and this has evolved into what we call the hybrid business model. Today we’ll expand on how retailers can stand out from the crowd and develop a competitive advantage by using elements such as fashion design, newness and fit to support their overarching brand strategy.
In an oversaturated marketplace, compelling designs in the storefront window are the key to enticing shoppers. I look no further than a recent shopping trip, when I was strolling past C. Wonder. This little yellow polka dot dress was calling my name. Seriously, calling my name. I couldn’t have lived with myself if I left it behind on the rack. This is precisely the type of personal response every retailer strives to create.
Examples of companies excelling at the design game are plentiful. Take, for instance, Canadian superstar, Lululemon. This retailer has successfully taken on vertical integration, gaining control across the design, marketing, distribution and retail stages of the value chain. I never thought I would pay $100 for a pair of yoga pants. But guess what? I’m not afraid to admit, I live in those things. What is the key here? A great, consistent design that is always flattering and made of high performance, feel-good fabric that lasts for years. Lululemon is a high-energy, experiential brand that is delivering on its promise through great design.
Newness is also important. Fashion has to make you want to buy something new and the companies that are able to consistently deliver fresh products to the marketplace are the ones distancing themselves from the competition. Even timeless pieces like the Little Black Dress are constantly being reinvented to remain modern. According to global management consulting firm Kurt Salmon, newness impacts the bottom line. The firm calculated that for every week saved within the product development cycle, the realized margin improves by 25 base points. Think about Asos, which introduces 1500 new lines per week, creating a new shopping experience each time a customer logs on. Even traditionally conservative Nordstrom has forayed into fast fashion with its Savvy Collection and the expanding partnership with Top Shop. By changing up merchandise almost daily, Nordstrom is hoping customers will connect more often; online or in person. After all, if a customer thinks she may miss out on something desirable, she most certainly will be back again and again. The element of newness is also evident in the fast growing concept of pop-up retailing. Pop-up stores offer up the appeal of exclusivity, newness and the element of surprise. Even San Francisco-based startup company Storefront has made a business out of connecting companies with short-term retail space.
Now we turn to what customers often deem as one of the most important criteria when making a purchase decision —fit. Kurt Salmon revealed that 85% of consumers will buy a particular brand because of the way it fits. Who knew such a short, three-letter word could mean so much? Some companies are building fit into the very essence of their business model.
Take for instance the personal styling service Stitch Fix. According to its website, the company’s founder is “passionate about helping women achieve everyday confidence.” Using an algorithm that takes into account a woman’s measurements, budget and other data, Stitch Fix delivers a hand-picked selection of pieces aimed at flattering your body and matching your style preferences. And don’t worry men, there are options for you too. J. Hilburn is a menswear brand all about fit. Based on home-visits by stylists, the company uses measurements to deliver custom-made clothing. The strategy is paying off — during 2012, the custom retailer doubled its yearly revenue and expects continued growth this year.
We’ve seen many great examples of companies carving out their niche in the marketplace through fashion design, newness and fit. Ensuring these elements align with your brand will help protect against the continual mark-down strategy that has plagued so many. But the question remains — how can companies do this effectively and still reach the market at the right time, the right quality levels and the right price point?
The answer: technology. Today’s marketplace offers technology for anything you could possibly imagine and, luckily for the fashion industry, there are solutions that get to the heart of your every day challenges. Advanced design software enables designers to better share, communicate and collaborate while producing technically correct and cost-feasible designs. Product development software with the latest 3D technology reduces costly samples while improving style, fit and end product quality. The list goes on and on.
Technology can provide visibility across the entire supply chain, ensuring companies move quickly and efficiently. In our next installment, we’ll focus in on this technology and explain how it all works. Stay tuned!