The Future of the Fashion Business

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Once upon a time, designers didn’t even begin to make an item of clothing until a (usually well-heeled) customer had ordered it. To our mass market fashion sensibilities, this seems curiously passé: the dominant retail model now operates very differently. Typically, brands design 10 to 15 styles to cover an entire season, review past seasons’ performances and wholesale orders to estimate demand, then mass-produce thousands of items for overseas markets, presenting them to customers at inflated prices to compensate for likely markdowns as excess supply and time devalue them.

While this – and the dominant retail model of physical stores functioning as the main distribution points – might have seemed improbably futuristic to our ancestors, there are good reasons for believing that these models are under challenge as never before. Online retail has already initiated a fashion supply revolution, and all the signs are that it’s going to get stronger and stronger. In 2013 alone, global e-commerce climbed by a mighty 19%. That figure was almost certainly equaled (and probably bettered) in 2014. With trends like this, by 2025, at least 30% (and probably much more) of the total retail economy will be transacted online.

Survival for fashion retailers will depend upon a willingness to adapt to the burgeoning rise of digital media. Whereas once, physical stores were the only means by which you could have your basic shopping and distribution needs fulfilled, today, you know that you can have the items you want on your doorstep at the click of a mouse just a few days or hours after placing an order online.

The age of mass offshore production of fast fashion is also coming under challenge. In the US, online retailers such as Before the Label, Gustin and The Petite Shop are using technology-enabled “in-house” crowdfunding sources to bring production back stateside – and decision-making back to the customer. Turnaround is faster and minimums lower: items only get produced when they get enough backers.

Adapting to disruptive market fragmentation across a raft of digitally-enabled channels is going to be the key to survival – an imaginative evolution not lost on successful entrepreneurs such as Lord Laidlaw. A well-known benefactor (The Lord Laidlaw Scholarships, which he is responsible for, enable students to research and learn in ways that wouldn’t otherwise be available to them), this erstwhile member of the British House of Lords exemplifies such fast-track adaptation: his spectacular business successes have arisen because of his capacity to embrace potentially disruptive market challenges and integrate them into his dynamically evolving business models.

The day of the physical store is by no means over, but its function and purpose will need to change. They’re already intrinsically sensorial and experiential – characteristics that can be repurposed into transforming the store into a powerful media point. Retailers that use their stores to excite customers about their products and then funnel their purchases to a raft of digitally-enabled channels, devices, and distributors will thrive.

The store as sole distribution point has had its day. The store as media point and conduit to online channels is coming, as are retailers and designers that use in-house crowd-sourcing to lower costs, reduce waste, and meet consumer desires through their e-commerce platforms. The future for fashion looks bright!

*This is a sponsored post, but all opinions remain my own.

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