Globalization and ongoing technological advances have had a significant impact on the fashion industry. Retail continues to go through wrenching changes in response to falling profits, as evidenced by the closings of several brick-and-mortar stores. Unsurprisingly, this has been accompanied by an exponential growth in the direct-to-consumer business. It would be an understatement to state that the direct-to-consumer model has changed the very fundamentals of commerce. However, the direct-to-consumer model is a boon for fashion, as it enables both small and also established brands to reach their consumers directly without depending on buyers of traditional brick-and-mortar or classic multibrand e-commerce websites.
The digital direct-to-consumer business model enables creatives to achieve global reach without having to make significant investments in infrastructure. It allows brands to present their products directly to consumers, enabling truly contextual interactions.
However, to enable the digital direct-to-consumer business model to flourish, two things must happen:
There must be a constructive way to discover and learn about brands that are not well-known yet because there are many of them in the global arena, and they offer exclusive and high-quality products. This is inherently difficult, since small brands crop up all the time, and the noise in the fashion news and social media makes it very difficult to discover new brands and differentiate the good ones from the bad ones. Furthermore, small brands typically have limited operating capital and relatively small PR and marketing budgets, which usually results in shoddy sales and marketing campaigns. The solution to this are international marketplaces, scouting brands and promoting them to potential customers. Monobrand e-commerce websites cannot compete with multibrand marketplaces, having much bigger marketing and PR budgets.
There must be a logical and constructive way for small brands to find service providers that they need, such as sampling, sourcing, manufacturing, PR services, sales channels, etc.
F’OLITIQUE magazine has been dedicated to discovering talents and helping bring them into the international scene since its inception in 2011. It has conducted detailed research on the fashion industries of several countries such as Spain, Italy, The United Kingdom, and Israel.
For its latest initiative, F’OLITIQUE is undertaking a global research initiative to interview various categories of industry professionals, including small and big fashion brands, buyers, stylists, photographers, fashion tech entrepreneurs, trade fairs, etc. from all over the world and share their views and perspectives on the current state of fashion and its future direction, especially in the post-COVID-19 period. The research will cover a wide range of issues such as future sales strategies, sustainability issues, various processes of automation, the role of artificial intelligence and other technologies, etc.
The initiative will be launched on June 1, 2020, and run for three months. The results of the initiative will be published at the end of August 2020. Fashion professionals from at least 40 countries will be interviewed.
Such an initiative is especially relevant right now. Various industry players are adapting to the new reality in different ways. Many brands, both small and big, use their teams and resources to produce face masks, sanitizers, and necessary equipment for doctors all over the world. Fashion schools are trying to teach their students online, though there is the fact that not all resources and equipment are available at their homes.
Individuals working in fashion, like journalists, stylists, and influencers are also changing their usual way of working, and COVID-19 is affecting them not less. All are feeling the impact of the pandemic already. PR firms report pay cuts as brands cut down on spendings, some brick-and-mortar stores are going out of business and closing permanently, classical e-commerce websites are being careful with their buying strategies and will be investing much less in small brands than previously, which makes the latter ones alone fighting for survival.
Fashion weeks and trade shows are some of the most affected fashion players affected by the lockdown. Most of the events for the next half a year are cancelled already. Trade shows and fashion weeks are going to stay in business only by implementing digital technologies.
Business of Fashion also released an update on its State of Fashion 2020 report in collaboration with McKinsey. According to it, the industry is currently experiencing a loss of nearly 30% of revenues and is focusing on crisis management.
Believe it or not, but COVID-19 pandemic will likely have some positive outcomes too. In a recent webinar, Danilo Venturi, Director of Polimoda, mentioned that luxury fashion brands wouldn’t be affected by the current global events that much. As an example, Hermès boutique in China earned EUR 2.7 million on the first day of opening after the quarantine, which is an astonishing number. In a Vogue Business article, it was mentioned that now designers have to deal with cancelled shipments and payment delays. However, in the long run, the pandemic can be a chance to take a break from the fast pace of the fashion industry and start producing less but higher quality and more long-lasting products.
But we will see what each industry player has to say about the solutions needed to build a bright future for the fashion industry and make each category player feel more protected and comfortable.