The Fashion Industry Revolution Enters “Phase Two”

We’re in a period of great transition in the apparel world. In fact, we are entering the second phase of a fashion industry revolution. The way women – and for that matter, men – shop for clothes is changing.

That, in and of itself, isn’t that shocking. We’ve seen it coming for many years. The increase in popularity of everything from Amazon to Instagram is not all that new. In a matter of moments from the convenience of your own couch you can browse new styles on Instagram or Pinterest and instantly order said styles on Amazon or other ecommerce retailers.

But those interesting new ways of shopping are only the beginning. 2017 is going to go down as the year things really starting changing.

For instance, take Amazon’s own announcement back in June. The ecommerce giant launched a beta project called Prime Wardrobe. The program lets customers order clothes, try them for a week and only pay for the pieces you want to keep. You can return the rest at no cost to you.

This isn’t the first of its kind. But we suspect it’ll be the largest. Others, such as Stitch Fix (which just had an incredibly successful initial public stock offering), Gwynnie Bee and Dia&Co, are all heavy players in the subscription box industry.

All offer slightly different pricing and services. But, it’s clear that there’s something to this new way of shopping. Even men’s apparel companies are getting into the act with the hugely successful Five Four Club among others.

While subscription services are going to become an increasingly popular way to shop, it isn’t the only new trend popping up this year.

The Fallacy of “Brick and Mortar Bankruptcy”

It’s a story repeated so many times it seems like it must be an inarguable fact. The “death of brick and mortar stores” is not the whole story.

Yes, people shop less at big-box department stores than in years past. Companies like Macy’s, which owns both Bloomingdales as well as its namesake stores, JC Penny’s and Kohl’s have not been on a good run. Net revenue, income and share prices are down across the board for these department giants. But this isn’t the kind of creative destruction we’re used to in rapid industry transformations.

Because these particular companies haven’t fared well over the past few years doesn’t mean all brick and mortars need face such a fate.

Nordstrom, Inc., for instance, has actually grown its top line 17.7% since 2014. To be fair, its net income has slumped. But that’s mostly from the moves it is making to keep up with the pace of changes in the industry.

Take its latest moves to compete with the ecommerce giants. After a beta test of six stores, the company is now expanding its “Reserve Online & Try In Store Service” to 43 stores across the U.S. We know, it’s not a particularly viral-sounding program name. But the idea is quite intriguing and starting to take off.

Using Nordstrom’s mobile app, customers can select any number of items they would like to check out. They are then notified when a local stores has the item in stock. The customer can then show up to the store to find a dedicated dressing room with their name and clothing all set out for them.

That’s not the only move this traditional retail is making to become less traditional. It is also launching a pilot program called Nordstrom Local. These specialty stores won’t even sell clothing. They are just small boutiques that feature stylists, manicures, coffee and even wine bars. They are designed for a casual shopping experience without the hassles of actually buying anything.

Of course, the company does still benefit. The real idea behind Nordstrom Local is for customers to have the full shopping experience (even a significantly better one) and then go buy those items online. They can be delivered same day to that Local store or to the customer’s homes.

These trial and error programs built around ecommerce are enormous transitions that we’ll only see more of in years to come.

An industry shake-up this large doesn’t stop at just the retail level, however. Even designers need to adapt.

Pop-Up Stores Begin to Pop

The idea of clawing and scraping for rack space at a retailer is starting to fade. The new trend seems to favor the idea of controlling space for a short period of time. This is increasingly done through pop-up stores. Rather than have your clothing sit on a rack that might not get any eyes on it for long stretches of time, instead have a number of racks featuring your product for a short amount of time… a day or two.

This transforms a mundane shopping trip into an event. You can show off more short-term seasonal pieces, as well as limited-run items. But it is also an excellent way to introduce and grow your brand… one we at DNA Design Collective is using to our full ability.

According to PopUp Republic, the industry has already resulted in $10 billion in annual sales. That number is growing at double-digit rates. Similar to the Nordstrom Local idea, you don’t even have to sell all of your items at the event. You simply give people a chance to see, touch and try on your clothing in person. They can then place orders online.

The future of the industry is not going in the direction you often hear from news articles. “Brick and mortar” stores aren’t necessarily dying (except for the ones refusing to adapt). The industry as a whole is not suffering. In fact, according to the McKinsey&Company, the overall apparel industry (which is already worth a whopping $2.4 trillion) is expected to grow at between 2.5-3.5 percent – a faster rate than the rest of the economy.

Those numbers, once broken out for more specialized companies (like DNA Design Collective) is even better. The Affordable Luxury category is expected to grow by as much as 4.5% this year – about twice the GDP growth rate of the United States.

So, we’d say the industry is going to be just fine. This transition is progress. It might change the shape of how we shop. But it won’t change the amount we shop.

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