Fashion. It’s right at the very cutting edge of retail. We should know: we’ve been helping fashion retailers stay current for quite some years. But what are the big challenges are affecting fashion right now?
Online versus in-store
Yes, the online versus in-store battle isn’t going anywhere. As we’ve said before on our blog, the rise and rise of online shopping is a big thing for all retailers and that includes fashion labels. As this recent article reports: “23% of fashion is now bought online compared to 2% 10 years ago.” Another article makes a point about the changes: “Online retail sales rose 17% year-on-year in June with the average order value rising from £75.11 to £80.34, according to the IMRG Capgemini eRetail Sales Index.”
So one of the big issues for fashion is how to make in-store as exciting a place as possible. We think that this retailer, quoted online, sums it up well: “Our brick-and-mortar stores will not vanish overnight. However, they will have to compete much harder for a shrinking pie by offering better and more immersive in-store experiences”.
The bargain hunting mentality
No-one could deny that we’re living through interesting times right now. And when times are volatile, it’s human nature for people to get even more careful about how they spend their cash. Add to that the boom in cheaper clothing in places like supermarkets and you’ve got one heck of a headache for big fashion retailers. The challenge is – how do you highlight the value of what you have to offer when people are searching for bargains? Well, this all comes down to having a clear strategy, as pointed out by this article: “… in the last recession Next adopted a full-price approach and came out of the period ahead on EBIT.”
Yes, this is just one example, but it’s an important statement about one key way for fashion retailers to respond to the bargain-hunting mentality.
For big brands, their long history can be something of a double edged sword. How do you stay current when you’ve been a household name for years? The risk of being instantly recognisable is that a brand can be seen as, let’s face it, a bit past it. This is even more likely to happen today with so many up and coming fashion retail stars. Staying fresh is something that big fashion retailers are under growing pressure to do. But it can be done. You can’t get much more iconic than Tiffany and we really like what they’re doing to stay relevant and re-energise their entire identity, as outlined here. We also really like this approach to rebranding by Mugler. Let’s not overlook at the great example of Warehouse, as this article explains: “Often left in the shadow of global giants H&M and Zara, Warehouse has arguably become the forgotten brand of the British high street. Last year, it announced its intention to change that by bringing fashion favourites Emma Cook and Alasdhair Willis in to reshape its future.”
The Brexit effect
Yes, there’s no getting away from the fact that Brexit is having an effect on all retailers. But for fashion which usually operates on an international level, it’s created all kinds of questions. However, now that the initial shock has died down, fashion and other retailers are starting to help shape things: “Fashion and retail industry bodies are working to ensure the UK retains adequate trade agreements with countries inside and outside of the EU following the result of the EU Referendum vote in favour of Brexit and some leading retail chiefs have warned prices will rise as a result of the decision.”
What we think
Our view? Fashion has always had challenges, but it keeps on adapting, something that the new chairman of the British Retail Consortium, Richard Baker, has said in Drapers Online: “Baker acknowledged that this is a particularly turbulent time for retail but said he is optimistic about its future because “retailers are used to fighting our corner” in the face of intense competition.”
Evolving past the obstacles is what has helped make British fashion a global powerhouse. The lessons of past fashion label success are to stay innovative, to keep investing where possible and to see potential threats as opportunities. Here’s to a bright future for fashion retail!
Agree? Disagree? Let us know what you think in the comments box below!