MAGIC MARKET WEEK is the largest global market week for contemporary men’s and women’s apparel, and the most comprehensive destination for fashion buyers and brands in the world. The Symphony team went out to Las Vegas to talk to some of the world’s most prominent brands about challenges fashion retailers are facing today.
“En-Trend” Comes at a Cost.
Seasonal trends and ever-changing tastes create special challenges for fashion brands. It is not unusual for a single branch to launch over 1,000 new items every season, each requiring variants in color, pattern, and size each season. This creates two pain points for fashion brands: maintaining a consistent customer experience on line, and managing inventory flow offline.
With return rates of 20% – 30% industry-wide (more for shoes), managing fulfillment costs continues to be one of the key challenges for apparel brands of all sizes.
Lack of Mid-market Solutions.
Many retailers believe they are paying a premium for inventory technology and fulfillment service providers to handle the complexity of both their wholesale and direct-to-consumer businesses. Today’s mid-market retailers feel the pain of functioning in an underserved sector, and are actively looking to streamline their ecommerce solutions. There is an opportunity in the market for lower cost players, but only if service providers can achieve cost savings without sacrificing fulfillment quality and flexibility.
It’s Not Easy Being Small.
In ecommerce as in life, it’s tough to be the new guy and even tougher to be the little guy. Top 1000 brands invest heavily in infrastructure and marketing to create a customer experience that is almost impossible to replicate without economies of scale. Every time department stores like Saks, Nordstrom, and Walmart choose a Top 1000 brand over an emerging name, it makes it even harder for young brands to build a customer base.
Commerce is Changing. FAST.
While most brands we spoke with are engaged in a traditional “big box” distribution strategy, we were excited to meet brands that are aggressively pursuing direct customer relationships. Brands that “get” online commerce, like MissMe Denim, are generally younger, newer brands with young leadership and plenty of “hip factor.”
They realize ecommerce’s potential and can react quickly in order to find new pockets of demand. These brands are experts at nurturing customer loyalty and building long-term relationships directly with customers.
Despite these commonly voiced challenges, it is an exciting time to launch a new fashion brand. The opportunity to build stronger customer relationships and achieve higher margins means enormous upside potential for brands that are willing to play by some new rules. As ecommerce matures, we expect to see more brands experimenting with direct-to-consumer strategies. And we can’t wait to see the next evolution.