What do Isaac Mizrahi, C. Wonder and Judith Ripka all have in common?
Fans tune in in droves to see the latest styles but, more importantly, they want to hear directly from Mizrahi, Ripka and Brad Goreski, creative director for C. Wonder, on personal style. These personalities create a connection shoppers just can’t get perusing sterile retail racks. And that connection drives $9 billion a year in sales.
Two to three million women watch Isaac during his two-hour stints on air, fueling online and in-store sales. For the brand, the result has been a turnaround from losing $30 million to earning $400 million in sales in four years.
With numbers like those, “as seen on TV” is no longer a taboo phrase. It’s now the key to unlocking major revenue—if you can listen and react to the customer.
“Everything we knew about marketing is irrelevant today,” said Robert W. D’Loren, chairman and CEO of Xcel Brands.
D’Loren, who headlined the Supply Chain Rebels presentation during the American Apparel and Footwear Association Executive Summit last week, said brands have to approach business from an entirely different perspective these days.
“We decided we have to reimagine shopping, entertainment and social as one thing,” D’Loren said. In fact, Xcel sees itself as a media company, not a fashion company. By capitalizing on the convergence of television and social channels, the company has been able to entice the increasingly empowered consumer.
“The customer is telling us what they want but we’re not able to deliver it,” he said. “When we set up Xcel five years ago, we said the way people shop will continue to change, acceleration of change will increase and the customer needs to be heard via data science.”
Data, D’Loren said, could help the industry channel its inner Wayne Gretzky. The hockey great had a simple strategy for scoring 60 percent more goals than anyone else: he kept his focus on where the puck was headed.
For fashion, the “puck” refers to consumer tastes, which whiz from one thing to the next at a breakneck pace. But just because it changes fast, doesn’t mean the industry can’t keep up—and it already has the tools, D’Loren said.
For example, bomber jackets were the fashion “it” item for several seasons. D’Loren said though the fascination has flagged, they’re still flowing into stores. Meanwhile, he said, search results reveal that shoppers are currently looking for denim jackets. Unfortunately, those have yet to hit the racks.
The industry could also be the puck in that metaphor. It’s ever-changing and only the companies that can adapt will survive, according to D’Loren. Data as a tool is just one example of how things are evolving.
Another example is fast fashion. Not a new concept at this point but it’s still a conundrum for most brands. D’Loren said brands need to figure out how to adopt the vertical development model that powers these speed-to-market phenoms.
“Fast fashion envisions the seasons as 52 weeks a year,” he said, comparing that to the limited deliveries most brands offer. “Most department stores are turning three to 3.5 times. Zara is five to six times. TJX is turning seven or more because they have the customer engaged with new product in the store every week.”
To mimic this model, Xcel tapped the best, poaching top execs from Zara. From their expertise, the company developed a new model for department stores with three “buckets”: Fashion, fashion core and core. The fashion pieces are created in small batches, which are flown in every four to six weeks. From there, fashion core is designed based on the best performers from the fashion bucket.
D’Loren admitted the first season employing this tactic wasn’t perfect, but with quality issues ironed out, he expects 2017 to show great rewards.
“We need to get to the point to give the customer a reason to get into stores to improve full-price sell throughs,” D’Loren said, adding that it’s a team effort. “Our retail partners have to allow us to design and assort it properly to fit in those buckets.”
So why spill all of his company’s secrets in a room full of apparel executives?
“We as a company can’t be the lone wolf,” he said. “How can I be the only one to create a zone in Lord & Taylor delivering 52 seasons if I’m the only one? I need more of us to figure it out and bring it to retailers.”