Overview

fashion week

Assault on the strongholds of the fashion system: seasons and fashion shows

The New York fashion week brings a breath of fresh air: women’s and men’s collections in a single fashion show to be held at the same time as the launching of the new products in the stores (and not six months earlier, as before). Last but not least, the classic seasonal conception of the collections will be dropped!

Assault on the strongholds of the fashion system: seasons and fashion shows

The long-awaited revolutionary move that the fashion system has lived in fear of for so long – in the face of the new “social”, hyper-connected and super-informed consumer who has come to expect a more direct and immediate link with the brand and newer, instantly available products – has come at last.

The first mover is Burberry who, after finishing the New York Fashion Week in February 2016, will bring a radical change to future shows by merging women’s and men’s collections in a single event which – novelty of all novelties! – will be held at the same time as the launching of the new products in the stores (and not six months earlier, as before). Last but not least, the classic seasonal conception of the collections will be dropped. As Chris Bailey quips – “it’s always summer, somewhere in the world”! Flow Fashion?

With a turnover topping 2.5 billion pounds and more than 200 fully-owned retail stores throughout the world, Burberry has the muscle to trigger off a whole reappraisal, obliging everyone to compete with this vision (quick to respond, Tom Ford has already cancelled some of his shows). It is certainly a hefty shoulder-charge to a delicate system and its numerous fashion weeks (which also generate valuable business for many cities, including Milan), creating a knock-on effect for the trade fairs.

The news dates to the beginning of February and will undoubtedly prompt a host of reactions, theories, a new awareness, proposals and, last but not least, concrete consequences to changes. Many first reactions have already been voiced, often combined, by enthusiasts, with the slogan “Direct to consumer”.

For a well-constructed summary we suggest this very good article in the NYTimes.

Above and beyond the impact on the conception of collections (a-seasonal) and calendars (those of the fashion shows, among others) why is the launching of this approach likely to have unsettling consequences for the fashion system? What are the major implications for the fashion industry? These questions require a great deal of time and reflection.


But let’s try and get the ball rolling by identifying two main areas of impact:

1. B2Whom?

If a fashion show develops from an originally trade-oriented event (and hence B2B) to a B2C event, that interfaces directly with the consumer (à la Victoria’s Secret, so to speak), what impact will all this have on the wholesale (i.e. intermediate) channel and business model?

The options could be many and varied: pre-runway shows behind closed doors, a dedicated collection, a transfer of the retail logic to the wholesale world aided by the new, virtual product technologies… This is a particularly critical issue especially for Italian companies, the majority of which still depend, for a large percentage of their turnover, on the wholesale channel. So what better alternative for them than to offer their products to the reference retailer in a sell-in approach? It is, however, important to point out that the role of the intermediate channel should not be interpreted only or exclusively as a limitation (although, unfortunately, it is increasingly tending to appear so): in actual fact, fashion is still strongly dependent on intermediate sales, from the overloaded American Department Stores to the most glittering shopping destinations such as Barney’s, Luisa, Joice, Takashiama, Harrods or Printemps.

Large retailers distinguish themselves for the editing and selection choices they make on the collections of top designer brands, but also on those of new entrants and “young talents”. So how can this important selection phase be cut out of the equation? For top designer names, it would be a question of encouraging more direct management also of the sales channeled through external retailer networks and this would therefore, probably, require the consolidating of concession-type formulas.

And for smaller designers, the new entrants? How could the key role of revolving door played by the search for multibrand retailers survive without fashion shows, trade fairs and sales campaigns?

Here an aspect emerges that the Italian system should analyze in depth. Whether deliberate or not (but in any case enabled by the new technologies which, establishing reference standards, tend, by their very nature, to reduce the competitive advantage of the smaller designers) this is a move which benefits the large players, who have the resources to manage direct distribution, and which therefore promotes concentration.


2. Supply Pain

Making the entire production and logistics system more agile and responsive will transfer the real difficulties to the Supply Chain. If the fashion show becomes the kick-off for sales to the final consumers, the key advantages must, of necessity, be immediate availability and the guarantee of very short delivery lead times. So this is why – in addition to the configuration choices, among which the practice of reshoring stands out conspicuously – it will be even more important to concentrate on the processes, in order to render them increasingly more streamlined and focused, without of course impairing the quality.

So what about the supply chains? Great challenges are certainly expected, considering the fact that nowadays the world behaves as though clothes could be easily run off on a 3D printer.

So it’s going to be quite a show but watch out: these are radical developments which will inevitably create a divide between fashion houses that have the wherewithal to interpret the changes and seek to create new “relevant” business models and paths (even if not necessarily aligned, in fact better still) and those who are destined, alas, for a slow decline.

As we often say, great strategic vision will be vital.


For additional information:
gianmario.borney@ambrosetti.eu
cecilia.castelli@ambrosetti.eu


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