Articles Worth Reading - Edition 9.2

Trouble at Tapestry - Lessons to Learn?

Article Explores:

  • What the trouble at the accessories conglomerate Tapestry has to say about American Fashion

  • What is dragging down Tapestry

  • Are there hidden lessons to learn?

Notable Content & Quotes:

  • After 13 years, the CEO of Tapestry, Victor Luis was ousted.

  • Tapestry (formerly Coach) got in trouble as an increasing portion of their sales were generated through their owned outlet stores. The outlet stores generated some good sales and cash flow but was tarnishing the brand and long term viability. Victor Luis guided Coach out of that trap and had sales again growing along with improving the Brand image.

  • To further boost sales, create additional leveraging opportunities and with a desire to create the “American” LVMH, Coach acquired Stuart Weitzman in 2015 and Kate Spade in 2017.

  • The timing of the acquisitions may have been a bit premature as the core Coach brand was still in fragile shape as it was working to reduce its reliance on the outlet channels while also under the scrutiny of being a publicly held company.

  • Kate Spade began to drag the company down, as its once popular colorful bags sputtered through changes inclusive of launching Kate Spade New York and design redirection.

  • Simultaneously redirecting Coach while also trying to reinvent Kate Spade and mis-steps along the way started to erode sales and profits.

  • The primary battleground for fashion labels is no longer department store racks but Instagram, having a strong story is more important than ever, and simply knocking off luxury brands without a specific identity is no longer enough.

  • Unlike accessible luxury label Michael Kors, which benefits from its charismatic founders, neither Stuart Weitzman nor Kate Spade have direct ties to the designers whose names are on the door.

  • More than anything brand building takes time and patience and willingness to play a long game rooted in selective distribution, price integrity and creative risk-taking.

Etsy’s Evolution - Fighting the Mainstream

Article Explores:

  • The evolution of Etsy as website featuring handcrafted items to what it is today

  • The difficulty of retaining uniqueness as pressures build to continue to increase sales

  • Are websites destined to follow Amazon to try to compete with it?

Notable Content & Quotes:

  • Etsy the online conglomeration of stores was a community consisting of people who handcrafted goods for people who cherished one of kind, handmade products.

  • The concept worked and grew but the power of the mainstream stepped in.

  • Rob Kalin, the founder of Etsy, had a vision which he stated as “Instead of having an economy dictate the behavior of communities, to empower communities to influence the behavior of economies.” He was ousted 16 months later from his own company.

  • The growth of orders led to the need for Sellers to move the production of goods out of their homes and into factories which Etsy ushered forward in order to capture the increasing revenue streams.

  • As changes took place groups engaged with the “handmade concept” complained about the culture changing but as Alison Feldmann, one of the first employees of Etsy stated: “As a progressive business, people are going to be taking potshots at any change that happens in terms of ‘selling out.’ You know, it isn’t a nonprofit. It is a capitalist world that we live in.

  • As factory production took hold, Sellers who had produced a product that was “handmade” were now competing with a Sellers of a similar item that was mass produced.

  • A private equity firm took over the company and fired over a matter of months 220 workers, instilling a new direction stating “You need to furnish your apartment. You need to prepare for a party. You need to find a gift for a friend. You need a dress. Handmade is not the value proposition — unique, personalized, expresses your sense of identity, those are things that speak to buyers.”

  • Now Etsy recently encouraged its sellers to offer free shipping for all orders over $35 to compete with Amazon. To help their decision they also informed their sellers that they would de-prioritize their store on the site if they didn’t.

  • While Etsy may be on better ground in terms of sales and profits it serves as an example of uniqueness giving way to the mainstream and perhaps the natural evolution of new ideas.

10 Commandments of New Consumerism

Article Explores:

  • While titled “New Consumerism” the 10 Commandments are likely to sound familiar.

  • What is “New Consumerism”

Notable Content & Quotes:

  • New Consumerism: “[Its] about today’s consumers reassessing their priorities and increasingly asking themselves what they truly value,” says Sarah Boumphrey, Euromonitor’s global lead of economies and consumers. “[And] conscious consumption replacing the conspicuous consumption of yesteryear.”

  • Provide Transparency: The millennial generation is really starting to push the boundaries of traditional fashion retail and driving demand for honesty and transparency for the products they purchase.

  • Brand Authenticity: Brands need to demonstrate a level of authenticity by offering products that are in keeping with the company history and culture.

  • Sustainable Processes: While a fairly new buzz word and not yet fully vetted out it does present a new bandwagon to jump on if it is fairly inexpensively obtainable within your business.

  • Invest in Retail Technology: An increasingly number of tasks are being made significantly less burdensome everyday through technology and as a result becoming an “expectation” to the consumer.

  • Help Customers Achieve Personal Goals: Understand what draws customers to your products; what they are looking for and why. Make it clear to them that your products offer them an opportunity to fill a need and feel good and confident about it.

  • Price Products Competitively: This does not mean the cheapest! This means understanding on how your product’s quality stacks up against those you wish to compete against and then pricing your product competitively so the choice to the consumer at that level is not price driven.

  • Provide Efficient Services: similar to investing in Retail Technology the goal is to make things easier for your customer whether that is a Retailer or the end consumer. The less “resistance” met will assist in increasing the flow of transactions.

  • Deliver Experiences to Drive Sales: more dollars today are going to “experiences” that are memorable and will “last” in the minds of consumers. This could be as simple as an event to meet the designer, get a behind the scenes view, or connecting to a community.

  • Embrace the Sharing Economy: The birth and growth of companies like Rent the Runway or resale sites like The RealReal reflect that sharing and reusing apparel and accessories is not frowned on and in fact an acceptable trend. Don’t overlook these venues to build a base.

  • Recognize Customer’s Individuality: This concept never gets old. Differentiation is vitally important not only as you look at your products vs competitors but also how to make the product feel even more special and one of a kind for your customer.

Articles Worth Reading - Edition 9.1

PR Doesn’t Work Anymore

Article Explores:

  • Traditional PR failing to move the needle

  • Stories are getting pushed more - not products

  • How are small & midsize companies building awareness

Notable Content & Quotes:

  • Being your own influencer on instagram: posting her own outfits — mixing third party brands with in-house designs — almost daily, and offering both styling and business advice for entrepreneurs.

  • Build online personas and interact directly with your customers. The more truthful you are, the more you communicate, the more it resonates

  • Cultivate editor relationships

  • Consumers are exposed to new things several times a day. For that product to stick, the brand and publicist need to work together to come up with a legitimate reason for a consumer to pay attention. A new colourway is not news. No one cares.

  • A broader seeding strategy that is not solely focused on celebrities and influencers with mass audiences, but a range of names that help create a brand identity in the eyes of the consumer

  • Affiliate links via shopping-driven sites — such as The Strategist or Who What Wear — or influencers who make a believable argument that they really love what they are shilling.

Rental Services - Is There Enough Demand?

Article Explores:

  • Post Rent the Runway - start ups and large Retailers are entering the fray - is the demand there?

  • What are these companies using to attract their next customer

  • Rental allows the customer to be more adventurous in style

  • Importance of Brand offerings offered

Notable Content & Quotes:

  • Rental model is geared towards those that want a more varied wardrobe without the desire to invest in purchasing it.

  • Individuals find it “fun” posting on Instagram their favorite rental pieces

  • Ann Taylor, Express, American Eagle, Scotch & Soda and Urban Outfitters now offer rentals, with Banana Republic and Bloomingdale’s to launch their respective services soon.

  • Vs the one off gown or cocktail dress, now more than half of Rent the Runway revenues are generated by its monthly Unlimited subscription service.

  • Forrester retail analyst Sucharita Mulpuru believes Retailers think that so many people will sign up for the recurring billing that it will be a no-brainer,, but customer acquisition costs will be high, churn will be high, and it won’t be that successful.

Articles Worth Reading - Edition 7.2

Wholesale Channel Pressures

Investment Banking group Cowen dug a bit into the wholesale channel for retail & consumer brands

Article Explores:

  • Department store inventory levels

  • Competing channels

  • What’s missing

Notable Content & Quotes:

  • Inventory levels at department stores are reaching multi-year highs (worst level in four years) which will put pressure on de-stocking and markdowns

  • Financial performance at department stores is declining due to various competing channels and lower returns on investment within their digital group

  • Brands own DTC efforts, deterioration in foreign tourist traffic and increasing penetration of subscription and resale channels are negatively impacting department store sales.

  • Retailers continue to desire brands which provide differentiation, good quality to value propositions and timely and accurate fulfillment.

The Need to Evolve

https://www.businessoffashion.com/articles/opinion/op-ed-winner-takes-all-trend-raises-tough-questions-for-everyone-else?utm_source=daily-digest-newsletter&utm_campaign=1640109185718485&utm_term=11&utm_medium=email

Article Explores:

  • Lack of profitable fashion players

  • Benchmarks on company’s operating expenses

  • Need to invest in channels, segments and markets

  • Evolution of change needed

Notable Content & Quotes:

  • 80% of the “listed” (meaning: their financials are publicly available) fashion players are failing to make money

  • The top quartile of fashion players were seeing 11% revenue growth

  • Companies are investing in areas like e-commerce, infrastructure and marketing but only a few are getting a sufficient return on those investments.

  • Need to spend dollars wisely in brand-building, expanding channels of distribution and entering into new markets while also working on product/design to capture revenues.

Building a Brand Outside of NY & LA

https://www.businessoffashion.com/articles/professional/how-fashion-brands-strike-gold-outside-ny-and-la?utm_source=daily-digest-newsletter&utm_campaign=1640040329672748&utm_term=11&utm_medium=email

Article Explores:

  • Building a product line and following outside of the lights of NY & LA

  • Gaining the support of your local media outlets and customers to introduce the brand

  • Exploring more unique ways to gain awareness than through the typical higher cost paths

  • The upside & downside to being outside of the big talent pools

Building Fashion People into YouTube Creators

https://fashionista.com/2019/07/fashion-people-youtube-videos-strategy

YouTube is a social channel that has an incredible amount of new video content uploaded to it daily. The channel offers designers and brands a chance to show a bit of who they are to its current and potential customers in a low key and relatable way. It should not be overlooked as a key part of your social media outreach.

Article Explores:

  • Marc Jacobs doing a learn to drive and car shopping YouTube video

  • Naomi Campbell spending time between flights and sanitizing her airline seat

  • Vlogging in pursuit of views, likes and channel subscribers

Notable Content & Quotes:

  • Derek Blasberg, YouTube's head of beauty and fashion partnerships, has convinced the likes of Victoria Beckham, Naomi Campbell, Alexa Chung, Rosie Huntington-Whiteley and Marc Jacobs to start vlogging on a regular basis

  • Mr Blasberg has also masterminded some very clever partnerships:

    • Emma Chamberlain and the Dolan Twins, whose channels have more than 8M and 10M subscribers, respectively, sat front row at Louis Vuitton's runway shows for the past couple of seasons.

    • YouTube personalities Rickey Thompson and Jay Versace have hosted videos and livestreams for Alexander Wang

    • Liza Koshy, a YouTuber with a whopping 17M subscribers, hosted the 2019 Met Gala live stream for Vogue.

Influencer Fraud

https://www.businessoffashion.com/articles/professional/influencer-marketing-fraud-buying-followers?utm_source=daily-digest-newsletter&utm_campaign=1639849027650017&utm_term=11&utm_medium=email

As you would have guessed, people are finding fraudulent ways to catapult themselves to higher social media status to lure advertising dollars. You might have read as well that huge numbers of the reviews on Amazon and other online retailers are false even though supposedly “verified”. This will likely get worse and with it a mistrust by consumers. If you are a designer, you are of course bound to be biased on your own designs which is expected but at least your followers can see your product through your own eyes. If you have followed real estate, you have undoubtedly noticed many of the real estate agents putting into the description “what they like most” about that particular listing. Assuming you liked each of your offerings enough to put it on a line sheet than why not in your social meeting posting explain what “you” like most about that item?

Article Explores:

  • How individuals are fraudulently building their social media status

Notable Content & Quotes:

  • individuals are hiring “click farms” to like or comment on posts

  • On average, influencers who buy likes spend $49 for 1000 followers on Youtube and $34 for 1000 followers on Facebook. The rate is even lower on Instagram, though, with influencers being able to pay as low as $16 for 1000 followers.

  • There are vending machines in Russia that sell Instagram likes

  • In one survey analysed by Cavazos, a University of Baltimore professor and economist, 25 percent of followers of 10,000 influencers surveyed were fake.

  • Groups of influencers who team up to like and comment on each other’s content in order to boost the engagement rate and game the Instagram algorithm so that it becomes more visible to followers.

Articles Worth Reading - Edition 7.1

Vietnam’s Apparel Industry Braces for Cost Surge

https://asia.nikkei.com/Economy/Trade-war/Vietnam-s-apparel-sector-fears-cost-surge-as-tech-giants-move-in

Article Explores:

  • Rising costs of labor in Vietnam

  • Tech giants moving into Vietnam creating a labor squeeze

  • Vietnam may be next target for US placed tariffs

Notable Content & Quotes:

  • Major apparel companies are halting or significantly slowing down any expansion in Vietnam

  • With a population of 95 million and close proximity to China, Vietnam has long been a popular destination for the apparel industry hoping to seek lower production costs.

  • Wages in Vietnam have increased 4 fold in the last 10 years with a governmental directive to increase minimum wages by over 10% yearly.

  • "A lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China. So there's a very interesting situation going on there," Trump said during an interview with Fox Business.

REVOLVE’s Web Attributes

https://www.cowen.com/capabilities/investment-banking/

Article Explores:

  • Cowen’s equity research team explored REVOLVE’s web base attributes

  • Survey results of how REVOLVE’s web-based customers interacted with their web platform

Notable Content & Quotes:

  • REVOLVE’s identified attributes are (1) Engaged Customers (2) Aspirational (3) On-Trend (4) High Satisfaction

  • REVOLVE’s web customer is highly engaged with their web site

    • 35% shop the site once a week

    • 32% are on the site daily

    • 20% visit bi-weekly

    • 12% visit the site once a month

    • 2% visit infrequently (once in awhile)

What does REVOLVE’s web-based customers shop for?

  • 29% Clothes to go out in (excluding work & everyday clothes)

  • 26% Clothes for everyday wear

  • 26% New product discovery

  • 18% Work clothes

Virtual Reality Clothing

https://www.businessoffashion.com/articles/fashion-tech/virtual-fashion-digital-products?utm_campaign=a830fada87-can-influencers-save-the-fur-industry&utm_medium=email&utm_source=Subscribers&utm_term=0_d2191372b3-a830fada87-416999661

Article Explores:

  • Do you kids spend money on-line to dress their avatar in a unique set of clothes or armor (called skins)

  • Is the world of virtual clothing to try on continuing to surge forward

  • Are we starting to see merger of virtual clothing and social marketing?

Notable Content & Quotes:

  • Epic Games’s Fortnite, the popular online game that has over 250 million global users, reportedly earns $300 million a month selling skins.

  • Apps that allow users on Instagram and Snapchat to alter their appearance are wildly popular, and several brands have also started using augmented-reality technology to let shoppers virtually “try on” clothing and shoes.

  • “Some kids can’t afford Gucci in real life, but they can in the digital world. It works as an entry point”, said Akash Niham, the CEO of virtual avatar startup Genies.

  • Carlings, a Scandinavian fashion brand, debuted a 19-piece virtual collection in November 2018 that sold for €10 to €30 (roughly $11 to $34). Shoppers who bought the virtual products submitted photos, which the brand turned into 3D images.

  • Some brands are already creating digital images for Influencer Instagram posting to identify the interest level before producing the item.

  • Companies like Ann Taylor, BetaBrand and Hugo Boss, which use virtual clothing to partially replace sampling in the design process, as does the fashion supply chain company Li & Fung.

Articles Worth Reading - Edition 6.2

The Most Discussed ‘It’ Fashion Items for China’s Youth in 2018

https://jingdaily.com/most-discussed-it-fashion-items-2018/

Article Explores:

  • Top fashions with young Chinese consumers

  • Some of the hottest-selling items, categories, and brands in China from 2018

  • Behavioral differences between Chinese post-80s, -90s, and -00s luxury consumers

Notable Content & Quotes:

  • Ready-to-wear and bags were the most discussed categories

  • Fashion brand trends have shifted away from creating one-off items in bags and shoes and more towards the development of full categories.

  • Younger and older crowds showed significant differences in the type of items they preferred as well as their motivations for buying them.

  • What each generation of China’s consumer is looking for and what motivates them.

  • Some examples of how long an “IT” item was able to maintain its popularity.


Resale Web Traffic in May

WWD

Resale of your goods is not only good for the sustainability but it provides another glimpse into among other things the (1) demand for your brand in the resale market, (2) how quickly items are hitting the resale market, (3) prices being achieved. This also may represent another channel that you can utilize in selling through prior season goods.

Article Explores:

  • The growth of the resale market

  • What sites in May lead the way in the resale market

  • The site excelling the most in Search Engine Optimization (SEO)

  • Discusses what channels are contributing to traffic on resale sites

Notable Content & Quotes:

Leaders in Resale Traffic in May:

  1. Ebay.com at 659.1 million total visits.

  2. Poshmark.com at 16.4 million total visits.

  3. Thredup.com at 3.98 million total visits.

  4. Therealreal.com at 3.52 million total visits.

  5. Grailed.com at 2.62 million total visits.

  6. Goat.com at 2.30 million total visits.

  7. 1stDibs.com at 1.91 million total visits.

  8. Depop.com at 1.52 million total visits.

  9. Stadiumgoods.com at 1.34 million total visits.

  10. Vestiairecollective.com at 306,000 total visits.

Aside from SEO, e-mail marketing and social media were the next largest contributors to site traffic


New York Times Interviews Andrew Rosen as he departs Theory

New York Times

Article Explores:

  • How Andrew Rosen views the next generation of fashion

  • What he believes it will take to survive the changes in fashion

  • His thoughts on the American Department Store

Notable Content & Quotes:

  • “… and then came the transformation from department store business to direct to consumer. That meant the brands, although important, had to take a back seat to the consumer, who now has the most power in the relationship, and is dictating the brands she or he wants.”

  • “Today there are multiple methods of distribution to reach the customer, which means the marketing aspects of the job have become incredibly important, incredibly scientific, incredibly necessary.”

  • “And consumers are getting messages globally. So companies have to develop direct-to-consumer capabilities, and they also have to develop international capabilities because without an international capability they can’t survive either.”


The State of Fashion 2019

Article Explores:

  • Collaboration between Business of Fashion and McKinsey & Co. exploring state of fashion

  • Impact of Global Economy

  • Consumer shifts taking place

  • Changes in the Fashion System

  • Views from the “rental world” through an interview with Jennifer Hyman, Co-Founder and CEO of Rent the Runway.

Notable Content & Quotes:

“Greater China is expected to overtake the US as the largest fashion market in the world during 2019”

“Much of emerging Europe will continue to see strong spending growth with more global players entering these markets.”

“Executives describe 2018 with the words “changing”, “digital”, “fast”"

Volatility, uncertainty and shifts in the global economy is still foreseen as the industry’s #1 challenge