source: Elisa Schenke
The past decade has witnessed a significant shift in the global economy, shaped by new digital technologies, unpredictable political events, globalisation, and changes in consumer behaviors. Indeed, these advances have presented their own fair share of challenges in various sectors, including fashion.
A recent BoF-McKinsey Global Fashion report – The State Of Fashion 2017 – concluded, that 2016 was “one of the toughest years for the global fashion industry” and cited Brexit, terrorism and an economic slowdown in China as contributing factors in the narrative. Furthermore, consumers were noted to be increasingly “demanding, discerning and less predictable in their purchasing behaviour.” With an expectation to be served – by companies – in a much faster, efficient and more personalised way than years before.
Fast forward to the present time, and uncertainty persists as Brexit is still underway. On 22nd September 2017, Theresa May unveiled Britain’s plans to remain in the EU for an additional two-year transitional period, until 2021. In response, Moody’s Investors Service – a provider of risk analysis – expressed a loss of confidence in the “UK government to be able to secure a replacement free trade agreement with the EU.” This leaves further obscurity on what type of business environment companies will be functioning in, post-Brexit.
Meanwhile, across the pond, Donald Trump’s surprise presidential election continues to introduce its own unique set of difficulties, including but not limited to the recent immigration ban. Undoubtedly, this has had some negative impact on the fashion industry considering (a) many designers are first or second generation immigrants (b) brands rely heavily on artistic talents of diverse seamstresses, artisans, tailors, etc and (c) the industry is extremely interconnected, attracting people from different parts of the world, particularly during fashion week. Not just the US or Europe.
So how can women, despite their already existing challenges in business, such as limited access to funding and a general lack of entrepreneurial education, equip themselves to compete in this current economic climate? We learn from female [mentors] in fashion:
Adapt a data-driven approach
Disruptive technologies are as much about opportunity as they are about anything else. The pre-internet era meant that businesses relied on physical brick and mortar locations to communicate with audiences. Essentially, companies had authoritative power to tell customers what they “needed to buy” and consumers would unequivocally go along with what was sold to them as the “hot new thing” to have.
In today’s digital world, however, consumers are more accessible online, but hold power via their fingertips on their smartphones. They are active participants in telling companies what they want and expect to be listened to.
Emily Weiss, founder, and CEO of Glossier understood this consumer transformation perfectly when she launched her beauty brand three years ago. In a recent interview with Fashionista, she explains that, “where brands were perhaps more presumptuous in the past, or dictatorial,” she is creating a “beauty brand that is truly inclusive and truly curious.” Her company does not talk at customers or at women. Instead, it engages with them “from product development, ideation process through to post-purchase” and asks what they want, so that products can positively impact their “day, life and mood.”
Although Emily, had no knowledge about supply chains, customer experience or building a team and initially faced difficulty in raising investment – because she was talking to “mostly dads” who couldn’t appreciate the problem, or her simple solution – her unique understanding of the consumer means that she ultimately got her break. Recently, the company raised $24 million in a Series B funding round, representing a total $34.4 million in venture capital to date: [entrepreneur interview]. This data-driven model is also adapted in many business models, namely Zara which is one of the biggest clothing retailers in the world.
Employ innovative practices
The benefits of technology consequently mean that traditional forms of doing business in fashion are also being called into question. Whereas fashion houses have always performed in a fast-paced fashion cycle, producing various collections a year, with no guarantee of consumers buying them once they hit the stores, ultimately leading to waste, emerging brands are challenging the “status quo” and opting for a much more sustainable, cheaper option.
Designers like Phelan are employing an intimate direct-to-consumer model where customers can readily buy what they see in collections and place pre-orders by signing a waiting list. This indeed offers a solution to the cash flow obstacles many starting designers experience and means that pieces are produced on a demand basis rather than an assumption of estimated sales.
Have a long-term view
Editor-in-Chief of Vogue China, Angelica Cheung put it best in her February interview with the Business of Fashion founder, Imran Amed. Companies “need to think about the message of their brand.” There is a growing trend and expectation that working with influencers or celebrities is the answer to generating sales and shifting goods.
And although Angelica acknowledges that immediacy and selling products is one purpose to connect with celebrities, companies need to look beyond that and understand how such investments can have even bigger returns for their business. This means that brands have to take “a long-term view” approach and realise that they are not just speaking to mature consumers but also speaking to the next generation that will evolve. Decisions made today need to sustain businesses in the future.
In conclusion, we would like to invite you to share insights into the ways in which you or your business have had to adapt to perform effectively in the current climate.
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