The Sale Mentality

Last week, I began exploring the effect of the recession on the fashion industry and the theory of “wear it now” versus “wear it later” deliveries as a way the fashion industry is trying to combat economic stagnancy. Though “wear it now” might be a step in the right direction in changing the tide of consumer spending by stocking relevant items when demand is highest, changing delivery times alone will most likely not be enough to change the overall depressed stated of the fashion industry. The apparel business is also facing the reality that their previous early delivery schedules or “wear it later” mentality have created a very real unintended side effect: the sale mentality.

Yes, as we all have learned through this recession, having clothing on the racks before they are in season has trained consumers to wait to expend their precious discretionary spending money on goods that are on sale, clearance or marked down. The question then becomes, what does the fashion industry do to get consumers to buy at full price again?

Quality & Value
Quality is King (or Queen) when it comes to consumer products and keeping customers satisfied. You can only last so long with hiding shoddy product through strong branding and packaging. In this recession consumers are stretching their discretionary spending to maximum capacity. Quality and value will be the first thing shoppers look for in prospective products. Simply put, the consumer wants to get their money’s worth.

We can see this through the rise of “disposable fashion” – the H&M’s and Forever 21′s of the world. Customers are looking for something at a low price point, very trendy and of-the-moment but that will most likely not make it to the next season. Clearly, consumers are willing to skimp on quality so long as the value is there.

Lower Prices
The slow economy trickles down to the factories. Less demand for brands leads to fewer orders, which leads to lower demand on factory floors, everyone on the food chain is hurting. Fortunately, for healthier brands, that means they have been able to negotiate better manufacturing pricing and terms. That’s great for consumers because that translates to sustained lower prices without sacrificing quality and value.

Exceptional/Differentiated Design
At the peak of the recession, I went to several trade shows, including NY Fashion Week. I noticed one predominant trend – designers were playing it safe. It was one of the most boring seasons I had ever seen, designers weren’t taking risks and not progressing, everything had been seen before. As a former designer, the message was clear: designers were only making what they knew would sell. That may get your brand through the lowest point of the recession, but it’s not a long-term strategy.

If a brand/designer wants to get consumers to pay full price, they will need to concentrate on exceptional or differentiated design. They will need to provide the consumer with something they can’t get anywhere else – and with the sense of urgency that if they don’t get it from them – they won’t get it at all. At the end of the day, design is what is going to distinguish designers from their peers and have consumers opening their wallets.

Customer Service
Though consumers don’t have the spending power they used to, it’s still definitely a buyer’s market. Survival of the fittest has weeded out many brands. Despite the market slim down, there are still a number of options to differentiate one’s brand when it comes to consumer products. One way companies can distinguish themselves is with stellar customer service.

“The customer is always right” has never been more correct. With brands competing for shoppers’ dollars, brands need to show customer appreciation. After all, consumers could have shopped anywhere but they decided to spend with you. So, make sure that when the customer has questions, or issues with a product, the problems are resolved swiftly. In today’s market, the last thing a brand needs is a customer complaining. The Internet has forever changed the power of a complaint. Facebook and Twitter can make one bad experience last a lifetime, or, worst case, cause the end of a brand’s life. Brand owners, remember, no matter the situation, in most circumstances even the most disgruntled customer can be smoothed over with simple and plain good customer service.

Branding & Brand Loyalty
Perhaps the most mysterious of the factors, branding and brand loyalty is the crème de la crème method of keeping customers paying full price. One need only look at examples like Apple, Chanel and Louis Vuitton. These brands rarely (if ever) have sales but customers keep coming back. Granted, they don’t only have branding to rely on, they have quality, value, exceptional design and excellent customer service. They don’t by any means have low prices but that doesn’t stop customers from buying their products – repeatedly.

Branding is the marketing term de jour and brands/designers should definitely take heed. How do you distinguish your apparel from all of the other options? Many times it comes down to brand image. What does the brand represent? What’s the story behind the brand? Why is it compelling? Why does it attract certain kinds of customers? Sounds relatively simple, but these are all questions that brands and designers must answer when developing their brand strategy. But note, branding will not be enough, nor will it be easy to execute. Branding is just another brick that designers and brands need to think about when developing their rock solid foundation of quality, value, customer service and exceptional design – without that, branding will just create nothing more than a facade. And facades crumble easily.

Conclusion: Breaking the Sale Mentality
Consumers have become pros at navigating sales and clearance racks. More often than not, shoppers are waiting for something to be on sale – because we all know it will just be a matter of time before the price is slashed. So, if we’re ever going to crawl our way out of this recession how do we get customers to start paying full price again?

There is no magic formula, but brands and designers need to look within themselves and make sure that they are doing everything they can to give customers the best possible experience. The building blocks will vary by designer/brand, but with a healthy mix of keeping costs down, bringing quality and perceived value up, designing the best product possible, making the customer feel important and by developing a unique brand image, brands/designers will be able to keep their customers – and have them pay full price.

To read Part I of this 2 part article, please see: The Rag Trade: “Wear It Now” or “Wear It Later”

Changing Seasonal Deliveries: “Wear It Now” or “Wear It Later”

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Have you ever tried to buy a bathing suit in the summer? It’s not easy.

We’ve all been there…we walk into a store in the summer, trying to escape the heat and get a bit of A/C and what do we see on the racks? Winter coats. The opposite is true in the winter – trying to defrost our fingers and toes we walk into a department store to thaw out and on the racks are bathing suits galore. What is going on?

Apparel shipping seasons have always baffled my mind from the time I was a little girl. I never understood why stores were trying to sell coats when all I had on my mind were swimming pools and ice pops. There’s something counter-intuitive to this method of selling, however, “wear it later” deliveries are nothing new to the fashion industry. What is new is the recognition that the recession has had long lasting repercussions on how consumers buy.

“Wear It Later”

When the economy was healthier, there was something to be said for the anticipation of shopping for the next season. Now, with wallets a bit lighter, shoppers are buying what they need, when they need it – and most of the time – on sale.

When I started my own clothing line I saw the benefit of shipping early. The cycle went something like this: Get your product on the shelf as early in the season as possible to lengthen the selling window; the earlier the stuff arrives, the more likely the store will re-order. Of course, this was during a healthier economy when stores were actually re-ordering.

Now in the recession, we hear about a store closing its doors every week and there isn’t much re-ordering happening. But, the shipping schedules have not changed. Instead, brands ship out their product early in the season, only to have their product dramatically marked down by the time it’s actually in season and relevant. This new system has essentially trained shoppers to buy on sale. Look at the way you shop – when was the last time you paid full price for something? One need only look at all the sales at boutiques and department stores and burgeoning online discount outlets like Ideeli.com, Gilt.com, RueLaLa.com and TheOutnet.com to see that consumers don’t want to pay full price.

“Wear It Now”

“We’ve got to bring clothes into season” – Donna Karan on seasonal shipping (The Fashion System: Donna Karan by Bridget Foley, WWD, 3.11.2010)

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Designer Donna Karan has long been a proponent of changing deliveries from a “wear it later” to a “wear it now” model. For a while her cries went unheard, but now with the current state of the economy, her arguments are gaining traction among the fashion industry. Her solution?

It’s very simple, we just stop. It is not nuclear science, it’s really simple. We deliver Fall clothes in August like back-to-school, we change the calendar, we go to stores and say, ‘Okay, no more getting Fall clothes in July or June so they’re on sale in September when the weather hasn’t changed. We have to go into a system where we’re talking in-season. It’s the way we eat, it’s the way we dress, it’s the way we think. We’ve conditioned the consumer to buy on sale — I don’t want to buy it full price because I can buy it on sale . . . We’ve turned our business into the white sale business.

(Fashionologie, 2.5.2010)

Other designers echoing Donna Karan’s sentiments include Tommy Hilfiger. It took him 25 years to perfect, but he coordinates his deliveries according to regions, tastes and climates. “[I]t’s not doing anyone any good to not find a swimsuit in July, and to look at wool sweaters and outerwear in July and August. It just doesn’t make sense.”

(The Fashion System: Tommy Hilfiger by Bridget Foley, WWD, 3.23.2010

So what do retailers have to say? Surprisingly, they seem to be on board as well. Linda Fargo, senior vice president of fashion and store presentation at Bergdorf Goodman stated:

If there’s been any upside to the recession, it should be a heightened drive to retool the status quo of how we have assumed business was to be done….We took for granted for too long that women were eager to buy a little slip of a summer dress in January and a heavy dark wool tweed jacket in June and store it in her closet for three to four months until she could wear it. It would be a certain win-win for everyone if the entire fashion cycle of production and consumption shifted closer to a need-it-now cadence.

(Deliveries Out of Control: The Year Ahead by Marc Karimzadeh, WWD, 1.25.2010)

Other retailers are noticing that fewer customers are planning out their wardrobes far in advance. Senior vice president and fashion director at Neiman Marcus, Ken Downing stated that “the mind-set of the consumer is more ‘buy-now, wear-now’ than ever.” (Deliveries Out of Control: The Year Ahead by Marc Karimzadeh, WWD, 1.25.2010)

The Changing Tide

With support gaining momentum from designers and retailers, “wear it now” may become a new shopping reality. However, any change takes time – I just wonder how long an industry that prides itself on fast changes like the constant turn over of trends will take to completely adjust how it does business. Is it really as simple as Karan suggests and just stopping the early deliveries?

The new momentum in the fashion industry to adjust the delivery schedule is definitely a step in the right direction. If sales are hurting, it makes sense to implement protocols that will give customers what they want, when they want it. There’s also something more intuitive and natural to seeing clothing that’s in season on the racks – the virtual equivalent of eating fresh fruits and vegetables that are in season.

When it comes to recovering from the recession, I wonder if clothing delivered in season will be enough. Consumers are still hurting and even those that are not are buying cautiously. Though it seems we may be slowly making our way out of the recession, as a society that shops, we’ll be feeling the ramifications of the recession long after it’s over.

Once a consumer has been trained to shop on sale, clearance or markdown, how do you get them to buy at full price again? Good design, and having pieces that are relevant and in season will definitely help, but I think that the situation is a bit more complex than just changing deliveries. We’ll also have to change shoppers’ mindsets. Next week, I’ll explore what it will take to get consumers buying again – at full price.

M.I.S.S. has teamed up with Moxsie.com to kick off their new guest blogger series. For the next three weeks, each Monday Moxsie.com will publish an article that I wrote for their blog. The first post relates to spring trends – and how to update your closet with a few key pieces. You can read “Shop the Spring Trends on Moxsie” on Moxsie.com.