The swiftly changing consumer-retail relationship has created opportunities for smaller, niche players in the apparel and footwear world, according to Judith Russell, apparel and textile marketing strategic consultant, who gave a talk at Texworld USA on what’s driving the dramatic shifts.
“Young consumers are changing the way they live, shop and buy and are therefore changing the way we all live, shop and buy,” Russell said. “They’re looking for brands that offer better quality, transparency and authenticity, and are demanding multi-tasking clothing.”
At the same time, retail is undergoing a major transformation, as mainstream stores and brands are maturing and the next gen companies are becoming more important, she noted.
“There’s a massive power shift from those who make to those who buy and consumers are gradually taking over,” Russel said. “They want what they want at the time and price they want it. This concept that everybody is looking for cheaper, I don’t think that’s the case. I think people want better value and are also just looking for better.”
This is forcing companies to develop different and more efficient distribution strategies, while the rising costs of infrastructure and logistics has impacted profitability, Russell said. Although a recent report from Moody’s noted that as companies build the new delivery and fulfillment systems, they are starting to see returns on their investments.
“Right now, the supply chain is really focused on reducing the cost of goods and in doing so has reduced quality, and consumers are losing interest in a lot of the old guard,” Russell said.
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At the core of all the changes going on in the sector is technology, Russell said, which is “allowing price transparency, and unlimited and immediate access to product information.”
“Data analytics costs have come down so it is affordable for smaller businesses to help analyze potential and existing customers,” she said. “It’s allowing even tiny players to focus on return on investment, on conversion rates and on sophisticated matrices that previously were only available to larger brands.”
At the back end of the supply chain, technology is allowing for greater speed to market and smaller minimums and the ability to work with smaller players, she noted. This includes more automated manufacturing equipment and methods, as well as a mindset shift from mills to adapt to meet smaller production runs.
“Brands that can demonstrate a value beyond the clothes,” whether its local manufacturing, the type of fabrics such as organic or smart fabrics with either technology built in or performance characteristics are also gaining in importance,” Russell said. “The new standard of speed to market is changing the way people buy and companies operate.”
On the retail level, voice discovery, such as ordering through Amazon Alexa and Google Assistant or through smart phones, is the fastest growing segment of retail technology, she noted.
Also popular is experience retailing, which has changed the traditional retail format, Russell added, citing such stores as Aritzia, Dover Street Market, Lululemon, the Nike store in New York’s SoHo district and the Urban Outfitters flagship in Herald Square in Manhattan.