If you ask any fashion agent or retailer being offered to take on a new fashion label during these uncertain times, chances are you’ll find they both ask the same question. And that question is – What are the prices? With the economy as it is, and with consumers seeking an online alternative for significantly cheaper purchases coming from overseas, the demand for manufacturers and designers to produce value for money garments is critical.
Phoebe Garland co-owns Garland & Garland Fashion, along with Robert Garland who was described by Ragtrader as “veteran ragtrader”with over 30 years experience. Garland & Garland Fashion is a leading fashion agency based in Sydney, which also offers business mentoring & project management of marketing to the fashion industry.
Ask any retailer how business is, and you will know things are changing very fast for them. Long gone are the days where the customer will buy anything. Now, thanks to the Internet the customer is a very savvy shopper and they are no fool. Here are some of the changes in the consumer.
1. Consumers do not want to pay for basics they can get from any major chain store.
2) Quite often the consumer is now haggling on price for goods from the retailer
3) the consumer is looking for unique yet commercial pieces from their independent boutiques, and of course the consumer is now waiting for the sale thanks to the department stores and chain stores and their incessant discounting.
With all this in mind, the question therefore falls on fashion labels, distributors, importers and manufacturers and also fashion agents to really think about what they are offering the retailer and consumer. Margin is a must for retailers, 100% these days doesn’t account for the crippling rents in some suburbs or for the sometimes zero days. However turnover is more important than ever as well. Labels don’t have to be cheap but they have to offer good value and a point of difference. And you must be aware of the vast competition out there and price yourself accordingly. There was a time where customers would be happy to buy cheap goods, regardless of the quality. Now the ball game has changed.
Fast fashion chain operators like Zara for example is one chain store where I have nothing but admiration. Why? Because before coming to Australia they did their research thoroughly on the Australian climate and got to understand their Australian customer. They realised that essentially to get the volume in this country, you needed to price yourself right and offer great design in fashion, and they understand their customer. The queues at the front speak volumes of the sales they are doing. It may drift off in a few years to come once the novelty wears off. But providing they don’t rest on their laurels and continue to innovate they will do very well.
For example, you go into Zara and you can get a pretty nice linen dress for $70.00. And the quality is pretty good for that price. Sure it won’t last you forever but it’s not meant to and the customer can accept this. The other thing is, Zara is considered a sought after brand and they have been very clever creating that image. The pricing structure for the Australian market is completely on the money and it’s something which Australian manufacturers and designers really need to think about in terms of their own labels. Zara’s short delivery times of 3 weeks in store is also a huge advantage and they were savvy enough to realise they needed to adjust their ranges from the northern hemisphere to suit the southern hemisphere.
While Zara may be outstanding value for money, there still is a demand for medium-priced garments. Consumers will pay money for goods they deem value for money. However manufacturers, designers and distributors really have to look at each garment before pricing to ensure that the RRP is justified. There is a need for the fashion industry to really look at the construction of garments, fabric and quality and ask yourself would you be willing to pay that for yourself or your partner at retail? The new breed of consumers will still pay for certain things. Jackets, leather and fur (and yes they can be faux) are areas that they will spend their money on. And to a certain extent, knitwear. But paying the big dollars for the NZ knitwear has certainly subsided.
There have been smart players, like Z & P Fashions who have re-launched their very established La Dame knitwear and are offering good value for money for garments. They are starting to see the benefits of having ranges that are value for money yet not compromising on quality. However they have been in the industry for many years and fully understand their customer. The area I see the biggest volume of sales in Australia apart from the very established wholesalers, are the labels that do fast turn around time for delivery. And those that offer stock support on best sellers.One of the companies that we represent, took a significant loss in indent sales last winter. But boy they made it up by offering an extended stock support when they realised the loss of winter indent. It was a gutsy move that payed off. Their stock levels for winter were up by 35%! Another smart operator, that was able to read the economic climate correctly and be innovative.
One thing I have learnt in this industry, is the volume of business is not done in high to medium end in Australia. And yes I am devastated at this purely for selfish reasons! Yes, you can have a beautiful label that has gorgeous fabrics, beautiful design and presents beautifully (and yes I am this label’s customer) but where real volume of sales lies, is in garments under RRP $150 and less. It’s time for designers to rethink certain fabrics that offer less sell through, and be smart about choosing fabrics that may offer value for money and higher margins and sell through. Unless in the odd exceptions if It’s a very branded product with minimum orders of say $10,000 imposed on each retailer. But even then imposing minimums can have an adverse affect for retailers.
From a manufacturer, fashion agents and distributors point of view you really need to ask yourself a hard question. Do you want to have a product that does medium sales or do you want to do volume sales? And when I am talking volume, I am talking about having a buyer come in and order $45K of product for one boutique. Because yes, that is the type of orders our agency gets on one of our labels. And here is the irony, I for one, would prefer to sell a label that is not necessarily my demographic or my taste, however which is commercial and can do massive volume, and can afford me to buy the medium to higher end brands for myself. As opposed to taking on a brand that is my demographic and is a medium to high end that does little volume and I can’t afford to buy the garments I love because I am not getting the volume orders.
The fashion industry is one industry which is hit the hardest with economic downturns, but with careful, planning, innovation and flexibility with manufacturers and great customer service from retailers, it is not dire. There can be a certain amount of arrogance in this industry and quite often from all sides of the industry. However, I for one won’t tolerate it from anyone during these economic times, now is the time we need to all work together and be flexible and help each other. Ultimately manufacturers, retailers, distributors and agents need to remember this – there is nothing glamorous about labels that do not sell no matter how pretty they may be.
As always, very interested in your thoughts.
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