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.
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.
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.