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Streaming Style: Fashion Goes Netflix

RR_Fashion-goes-NetflixThe “Runway, Same Day” movement is not really a game changer. The game has already changed.

The recent discussions around the “Runway, Same Day” business model, solidified by Burberry’s recent decision to combine both its men’s and women’s collections into a see now/buy now semiannual event is a dramatic, but not unsurprising, sea change for the industry … and the function of fashion itself. By eliminating the anticipatory behavior accorded by the traditional calendar of showing products four to six months ahead of their availability, fashion has finally caught up with with other creatively oriented consumer industries.

Justin Beiber doesn’t preview his songs half a year before releasing them, just as Apple doesn’t preview their newest products until they are available. It’s like Disney showing “Star Wars” months ahead of its release date, but with no sound. Or Estee Lauder releasing a fragrance that you can’t smell for months.

We have now officially entered the world of what I call “streaming-style,” giving consumers more incentive to react simultaneously to the unveiling of a new collection. Netflix threw out the rules of strictly timed network television programming by releasing a series en masse rather than on a 13-week schedule. Fashion now finds itself in the envious position to adopt the Netflix model and give itself a boost of excitement — something that the industry needs — by turning the anticipation into an actionable and transactional opportunity.

Think about it, the apparel industry is already in the streaming business. Images from runway shows are uploaded into the cloud and already in pattern makers hands in Asia before the Champagne is popped backstage in Paris or London. Bloggers fill the front rows of many shows, and the power of their followers is recognized and respected. By changing the calendar, we can better take advantage of the bloggers’ ability to create demand, and benefit from a better return on investment from the shows by turning that demand into immediate sales.

But as Netflix’s business model has become associated with “binge watching,” is the fashion industry tempted to do “binge buying?”

Will the successes of H&M or Target designer collaborations, causing people to line up around the block and websites to crash from the crush of customers trying to buy limited inventory, become a major benefit of this new thought process?

Can designers and brands finally regain the ownership of their work and realize their value before others invariably utilize their concepts for their own benefit? Can we realize higher gross margins by a better turn on inventory at the outset of a delivery? Can we create more brand loyalty by giving people real benefits for buying earlier in the season? You can make your own assumption on the answers to these questions, but it’s hard not to answer yes to all of them.

Nearly every industry is under some form of disruption: music, transportation, hotels; even the energy industry is being upended. The fashion industry is ripe for disruption and we should all embrace it, and learn how to live with this emerging new dynamic that, ironically, we helped to create and promote. Society is more than ever in the business of the “new/now,” and, in retrospect, fashion now seems to have been a laggard in this dynamic, even though it promotes itself as a forward-thinking business.

Burberry, of course, has many advantages to change its dynamic. With a network of 200 stores around the world accounting for 70 percent of its retail sales, it has the ability to transform the way it delivers its message and product to the consumer. With the bulk of its sales coming through its vertical operations, Burberry has the ability to affect production and supply chain issues much better than others who are not vertical. It also has the benefit of owning many of its factories so it can better control its intellectual property before the release date.

Just as Apple is highly secretive of its products before releasing them, apparel brands and designers will need to become more secretive in their process. In a highly publicized incident in 2010, a prototype of an iPhone 4 was left on barstool by an errant Apple employee forcing the company to desperately retrieve the phone. Perhaps the same will occur in fashion. But frankly, if you find a Burberry dress on a barstool, you may just wonder what kind of bar you’re in.

For the many other companies who are not vertical, this new dynamic will change the wholesaler/retailer relationship and will actually fortify and strengthen the relationship between them. Retailers will become more like theater owners and the manufacturers more like movie studios, each sharing their respective responsibilities and marketing strategies to maximize the impact and sales of the collection.

Like the 2012 television show “Fashion Star,” where styles shown in the show were immediately available next day in stores, it will take concerted advance planning between manufacturers and retailers to coordinate their efforts to maximize their sales. But rather than last for only two seasons like “Fashion Star” did, this will become the new normal.

So what is to become of fashion shows? Using the film industry as an example, shows will become, even more than they are now, true “red carpet” events. Shows will have to do a better job in creating the magic of what makes fashion dynamic and special. With great shows, there is an inherent glamour that creates the insatiable demand that we expect of them.

And we will be able to quantify that demand better than ever. Most films generate 70 percent of their ticket sales within four weeks of their release. Imagine if you had a 70 percent sell-through within four weeks of a collection’s launch. At full price. A stretch perhaps, but at least worth thinking about.

But the function of the shows cannot be lost or watered down by showing styles that are only available for sale. Shows need to maintain the integrity of why they exist in the first place. Showing magical, dramatic products that may never see the light of day off the runway is what makes fashion exciting, and critically important to a brand’s essence and message. Creating inspired and theatrical events to showcase the collections will be more important than ever to tell the story of its inspiration and inception.

At my most recent menswear show at New York Fashion Week/Men’s to showcase my collection called “Men In Their Natural Habitat,” I installed 75 pine trees on the runway and had the audience of nearly 600 walk through a forest of Men. In celebration of the 100th anniversary of the National Parks, I named each outfit after a National Park, complete with real park rangers. I knew when I designed the show that it would be over-the-top for some in the menswear industry, but that was the point.

As with film, it is the responsibility of fashion and designers to take their customers to a place that they would never have imagined, and push them to reach for a place they didn’t know existed. It is something that some designers have been doing forever, but will now it will become much more important. It creates what I call “emotional gross margin,” the value you create beyond the product itself. It’s why a Hanes T-shirt is $4.00 and a Prada version is $400.00. That’s what I call emotional gross margin.

Many years ago I coined the phrase “The Brand is the Amusement Park, The Product is the Souvenir”. Think of the opening of a collection as your Amusement Park, and the collection itself as the Souvenir of that event. Of course a great show will not make a collection sell better, but by aligning the industry with how the real world works and wants to buy, we can at least maximize the magic and fantasy that we all work so hard to create, and realize a better return on investment from those efforts.

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