The much anticipated report from the Council of Fashion Designers of America and the Boston Consulting group offered few clear solutions last week for what the organizations deem a “broken” fashion system. The rise of fast fashion and quickly shifting consumer shopping preferences have affected all retail industries, but high-fashion brands have been slow to react. For many, this isn’t a reflection of an inability to pivot at an organizational level. Instead, these brands are held to strict presentation calendars which dictate the release of new lines.
Typically, fashion shows presented in the fall reflect the next spring’s styles, and shows in the spring reflect the following collections for the fall. There are ready-to-wear pieces released in the following months and designer items can often be seen on celebrities leading up to the season the pieces were originally created for. Fast fashion, though, has thrown a wrench in this model. Companies like H&M, Forever 21 and Zara take ideas and styles for these presentations, recreate the items in a more season-appropriate cut and lower the price.
This has typically been seen as a market opportunity. After all, many of those buying from these fast fashion brands likely wouldn’t ever buy from the high-end brands –– due to price alone. But, consumers of all ages and budget thresholds have changed their tune when it comes to shopping: they want it now –– not next season.
This has given rise to what is known as the “see now, buy now” trend, in which a designer transforms his or her fashion week presentation and showcases instead a more season appropriate and ready-to-wear line. LaQuan Smith was one of the first pioneers of this type of show during NYFW S/S 2016, as were Burberry, Tom Ford and Tommy Hilfiger.
The CFDA and Boston Consulting Group report, which drew from formal interviews with 50 fashion industry leaders, aimed to answer the question of how to reduce the gap between runway shows and those items becoming available in retail. The “see now, buy now” trend does this by addressing the need for fashion immediacy in order reduce customer fatigue with collection perceived as lacking is newness.
Also, however, the report addressed issues with retail deliverables. As is, according to Business of Fashion, “Pre-Fall clothes are delivered from April through July, while Autumn/Winter clothes are delivered from July through October. Heavier items like outerwear and knits are often deeply discounted in January when cold weather finally hits the United States. Today, retailers rely on markdowns to drive foot traffic and sales, resulting in a vicious cycle.”
The Fashion Industry’s Fast Fashion Problem
These are three challenges most referenced in the interviews conducted by the CFDA:
- Perceived “early” deliveries and markdowns hurting full-price sales: The race to earlier deliveries and therefore markdowns is leading to merchandise at retail that is seen as increasingly out of sync with the physical season, while our consumers are looking to buy clothes closer to when they need it. This results in retailers and brands failing to capitalize on “see now, wear now” consumer trends as well as in-season clothes’ being on markdowns during relevant time / season, hurting full-price sales potential.
- A decreasing perception of newness: Technology and social media have rewired the fashion system as everyone knows it. Shows no longer just reach retail, industry insiders and press. Images and live streams from shows are accessible worldwide in real time, exposing consumers to designs months before they are available for purchase and providing sufficient time for so-called Fast Fashion brands to manufacture and deliver such trends. Even for industry segments and brands not directly challenged by Fast Fashion interpretations, this contributes to the ubiquity of trends and designs. As a result – as our interviewees saw it – trends and designs can seem out-of-date or stale by the time they reach stores, causing general consumer confusion and fatigue and ultimately hurting designer full-price retail.
- The danger of designer creative burnout: The confusion of the fashion cycle, coupled with the increased importance and complexity of pre-collections, leaves less time for the creative process and artisanship and puts immense pressure on critical design and creative talent. Our interviewees expressed a desire for a future system that creates more structural, predictable downtime for design and creative talent.
Overall, the report offered few clear answers, instead making it clear that how to address these issues is ultimately a strategic brand decision. The CFDA and The Boston Consulting Group did offer two potential business models for the fashion industry at large.
Solution one: More intimate retail / press appointments or presentations 4-6 months before deliveries, with an option to then have in-season activations when collections are delivered to stores and available online for sale.
In this model, fashion presentations themselves become consumer-facing events exclusively, with industry insiders getting previews of collections 4-6 months in advance. This addresses the perceived lack of newness from consumers and enables insiders to earn exclusive press coverage, partnerships and placements for collections.
This model follows a cadence similar to technology industry marketing plans, in which there is a selective beta program for new solutions and then larger events and promotions once the product is ready for market. This gives events and PR teams ample time to earn press, gain beta tester input and ultimately ensure that the product launch goes well.
While the fashion industry likely won’t be taking any feedback from early viewers, this will give their brands time to plan, execute and promote collections in line with consumer expectations.
According to the CFDA, here are the benefits of this idea for brands, retailers and press:
- Brands: Boost full-price selling and increase return on investment; free up more time for designers to focus on creativity, inspiration and developing products between the two Fashion Weeks; limit the ability of Fast Fashion to imitate original designs
- Retailers: Increase the perceived newness as deliveries will be timed closer to consumer need (see ‘shift in delivery timing’) and marketed to the public at the same time; provide the ability to leverage New York Fashion Week to increase traffic, develop special experiences for top customers; explore opportunities for collaboration with designers, especially emerging designers
- Press: Create timely and relevant content for readers; increase relevance of advertising and ability to measure return on marketing spend for both traditional and new media
This model does not imply any compression or compromise in the manufacturing lead time or additional inventory risks, according to the report. However, it has implications that each brand would need to assess to make a decision:
- Brands would have to think about the right format of retail / press appointments and in-season events to be more consumer-relevant, while protecting designer creativity.
- They would have to adjust their logistics and resource allocation during New York Fashion Week to manage the in-season activation as well as the retail / press appointments or presentation for the next collection.
- Brands also need to rethink their press strategy around both retail and press appointments and in-season activations.
Solution two: a hybrid model also emerged, that maintains the current timing but includes ‘capsule collections’ available immediately for increased “shoppability.”
This solution is currently how most high-end brands are addressing shifting consumer preferences, and is what is known as “see now, buy now.” The issues with this model, however, is the lack of lead time for publications and press coverage as well a inventory risk.
Here is how the report suggested this model would work:
- Main show would still be the culmination of the design / creative process but include a capsule collection available for sale immediately with brands taking appropriate inventory risk.
- This idea was particularly preferred by luxury and select accessible luxury participants.
- Benefits: addressing the demand for more immediacy with the capsule while keeping the show at the culmination of the design process and still building excitement for the future collections. This would avoid the potential complexity of decoupling the trade event from the consumer-relevant event.
Ultimately, the report acknowledged that whichever route is taken, the choice is up to the brand itself. The CFDA did note, however, that all participants in the study recognized the need for change in the industry in order to address shifting consumer shopping preferences and the need for retail immediacy.
“The unanimous consensus among our interviewees: the time is ripe for change in our market.”
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