Fashion industry – perspectives in the recovery period
The fashion industry suffered during Covid (which is still going on). The companies that have done best are far from Serbia, focused on digital growth and the Asia-Pacific crowded markets.
Source: Mc Kinsey internal research / State of Fashion 2021/0 = sales in 2019.
Predictions from the research sectors of large consulting firms show that the European fashion industry will not reach sales from 2019 even in 2021. Even the largest, such as Zara (Inditex) and HM, are facing an impoverished consumer because many things are more important than fashion today.
Usually, the winners of Covid in the fashion industry are companies that had a higher degree of digitalization. Not the digitalization that equates with e-commerce! Having an e-commerce platform today is a matter of business “hygiene”, not the key to success. Approx. 60% of traffic even in digitally advanced economies still makes – offline sales. With us – much more!
Source: Mc Kinsey internal research / postCovid channel recovery scenario share%
But even if e-commerce is the key to progress, in EU economies the return of what is bought goes to the seller’s account. Therefore, it is necessary to have: a. volumes that can withstand over 50% of the return share and / or b. a price that can withstand the costs of return policy and complaints. Most of our manufacturers are not ready for this kind of digital game in large markets: marketing, price or budget. Therefore, very few manage to achieve brand growth through greater geographical expansion enabled by e-commerce.
Innovative business models in industry
Circular business model it means that one item can be given the longest possible life: either it can be bought or rented several times, or it can be turned into a material from which new clothes are made by recycling. Sustainability is the new “buzz word” of mass-mode manufacturers. We already find labels with the labels “MADE FROM RECYCLED COTTON”, “LOVE NATURE”, etc. on the products of the world’s largest manufacturers.
The circular model is alive in Serbia. You have noticed growth second hand store? Consumers can choose a second hand range imported from abroad, and wholesalers offer assorted clothing at a price of about 5 EUR / kg.
On online platforms that sell anything and everything, the sections of second hand wardrobe are increasing. New ideas are born on a circular model. But, this is not very good news for Serbian fashion representatives, nor for those who supply them with raw materials.
Renttherunaway.com the platform emerged on real consumer insights: people, especially women, like to be fashionably dressed and luxury brands mean a lot to them because they make them feel more valuable and more satisfied. But they have no money to pay them. Especially if they want to always wear some luxury branded pieces of clothing. And here are business ideas! https://www.renttherunway.com
Although stagnant in the Covid period, platforms such as renttherunaway.com they have a future. Contracts with super fashion brands provide benefits to both: the platform has a super offer of the latest collection, and the luxury brand earns more per fashion item (because there are more rents during the season). One item through renttherunaway.com has more life thanks to the lifestyle of all those who have to wear the latest fashion and do not want to come to work twice dressed the same. As many as sixteen items can be rented for $ 149 a month. Buying them would probably cost many times more. So, the most important side – the consumer – has a benefit.
There is another interesting concept of extending the life of fashion items: Vestiaire Collective. On this e-commerce platform, you can buy verified and authenticated vintage items of the world’s biggest brands, but at a price that is 70% cheaper. Very simply, through the app you can also sell your branded items and platform Vestiaire Collective retains 20% of the sale price.
Loopster.co.uk is a site for second-hand children’s wardrobe, starting with clothes for newborns and choices for six-year-olds. Children grow fast, so most of the clothes are almost new.
Digital platforms that are based on consumer insights and then managed based on deep analytics of transactional data are a different way of dealing with fashion and have a brighter future. OK, renting or second hand are not solutions, but this article is not Puzzle so we don’t have to go with the “final solution”. We can only move forward if we get out of the circle in which the Serbian fashion industry has been spinning for years.
Digital fashion in Serbia – a look behind the web store
Most domestic retailers who base their business on their own production in digitalization have come the furthest to the algorithm that optimizes stock in stores (and e-stores), so there is still a large field of digital information in front of them that they need to turn into business insights.
Consumers leave behind a large amount of data on the Internet before and after the purchase. Modern tools help to collect and analyze data. Scraping data from competing sites, automatic comparison of assortment and special offers, deeper insights on shopping missions, consumer insights, comparative investments in digital marketing, automated optimization of media costs – all these are data whose analysis we can reach new opportunities or at least to say that what we are doing may have some flaw.
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Autor teksta: Vera Lloyd-Thomas, CEO, Kreativa New Formula, an element of Alkemy i Member of Alkemy International Board
Source: PORTAL by marketingmreza.rs.
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