Apparel retailing has changed dramatically in the last decade. Over-storing and e-commerce are largely to blame for the struggles faced by many retailers, but consumers have changed as well. The number of fashion influences has increased exponentially with the rise in online content and social media. Today’s consumer is not brand loyal and is disinterested in commodity goods. However, consumers are more engaged with apparel shopping than in the past. While it seems like today’s shopper has ADD, they are looking for retailers to edit assortments down to fewer, unique options delivered in an engaging retail environment. For retailers that can offer something special, the change in consumer mindset is an opportunity. Brands that do not adapt risk having stores that feel dated and tone-deaf.
Research shows that consumers are spending more on apparel while buying about the same number of garments. In other words, spending on apparel has shifted towards higher quality items. There is a distinct shift in fashion away from print, pattern and embellishment and toward richer fabrics, better drape and cleaner lines. Some of the hottest trending brands including Vince, Rag & Bone, Joie, and Elizabeth & James are examples of brands that approach style from a subtle aesthetic. The challenge with this trend for more mainstream brands is that it is hard to replicate this look and feel at cheaper prices without looking basic and boring. Mainstream brands have eschewed basic in favor of novelty for years with the reasoning that consumers don’t need another black sweater. It’s harder for mainstream retailers to stand out in basics, so competition at this level rests on price. But now consumers do appear to want that black sweater, particularly in a great cashmere with an updated silhouette. The trend is in the make so mass produced cotton won’t cut it.
While brick and mortar retailers scramble to close stores and grow online, e-commerce brands are selectively opening stores. We are not talking about Amazon; we think that move is mostly about same day delivery in top markets. But the move by fashion e-tailers to open physical retail has different motivations. E-commerce has numerous advantages, among them breadth of assortment, ability to scale, and tracking and analytics. However, replicating the customer experience online achieved in a physical store is difficult. If brands can leverage online consumer interest to build buzz for a physical store, they can drive significant volume. Conversion is in the single digits for most e-commerce stores and averages in the 30-percent range for most physical stores. Companies that begin in e-commerce are using what they have learned from selling online to guide store opening plans. Nasty Gal, Bonobos, Rent the Runway, and Etsy are just a handful of e-commerce companies that have announced select retail stores or pop-ups.
We find the most interesting retail concepts today curate a collection of different brands and products for maximum effect. It’s as if the coolest person you know invited you to their trendy apartment and let you buy all the objects they’d hand selected. Creative curation relies on full-priced selling (often of high priced goods) and scarcity. The items are unique and the products are the stars of the selling space. The best physical store example we can think of is Story in New York, but Colette in Paris, Opening Ceremony, and Intermix also use creative curation to grab consumer attention and hold it. The approach is pared down and focuses on special products in contrast to the more mainstream approach of selling large quantities as competitively (cheaply) as possible.
Consumer interest in unique products is on the rise and collaborations are one way to deliver product that feels special and fresh. Collaborations are not a new concept, but the trend is not going anywhere. These collaborations often take the form of high-end designers creating limited edition product for high-street retailers. Limited edition collaborations can be brand-enhancing and broaden the relevance for both brands that participate. Collaborations allow brands to explore new products or take a new spin on existing products. Limiting quantities creates excitement and urgency for consumers. Not all collaborations are successful. Target has had hits and misses over the years. Kohl’s has been pleased with its design nation collaborations, but the retailer has not attempted to create scarcity around these lines and none of them have been game changers. But the recent Alexander Wang X H&M collection shows the power of a well-done collaboration.
Both online and in stores, consumers are craving content alongside product. Information that enhances the consumer’s understanding of a retailers brands or its lifestyle helps fuel customer engagement and increase purchasing confidence. For example, reading an article online about clean beauty products becomes a call-to-action to purchase product after the compelling case has been made. In stores, digital content delivered via kiosks or smart displays can provide detailed product information, styling advice, or suggest additional products for consumers to purchase. Consumers feel more confident making purchases after accessing product information. Today’s consumer is used to seeking out multiple points of reference before making a purchase. Providing content gives retailers a stronger voice in the conversation.