Accelerate or die: the stark choice facing fashion retail
It’s no secret that retailers are having a torrid time. On both sides of the Atlantic, familiar names are going bust. House of Fraser, Sears, Toys ‘R’ US, Henri Lloyd… the list is long, and depressing.
And fashion and soft furnishing stores have been hit especially hard: MultiYork, Coast, Greenwoods, Store Twenty One, Jacques Vert, Jaeger, Brantano, Feather & Black, Warren Evans—a number of these businesses go back decades.
When looking for reasons, it’s easy to be glib. Around the world, online retailing is taking off, and bricks-and-mortar retailers are suffering. Business taxes, shop rents and wages are rising. Years of financial austerity have left consumers with little discretionary income. Retail chains have simply spread themselves too thinly, shoehorning outlets into ever-emptier malls. And so on, and so on.
There’s some truth in all of these—but none of them really explains the scale of the adversity that retail is experiencing. Almost certainly, the retail model itself needs transforming, with physical retailers’ survival calling for a clever blend of physical and on-line storefronts, supported by omni-channel logistics and reverse-logistics processes.
‘Survival’, though, isn’t necessarily success. For just as the Internet has democratised access to information and entertainment, it has commoditised vast swathes of expenditure. Why visit a physical store if the very same product can be delivered to your door for less money?
Well, one reason is if a visit to a retail outlet becomes an experience in its own right. Upmarket retail chains and shopping malls are already embracing this philosophy, and finding that footfall responds. That’s bad news for unimaginative ‘me too’ malls with the same range of stores as every other mall, but a welcome path back to profitability for those retailers and malls creative enough to build distinctive retail experiences that turn them into destinations, not conveniences.
As if that’s not difficult enough, another reason to visit a physical store is if you’ll find genuinely distinctive products inside that can’t be so readily purchased on-line. It’s no accident that a number of the compelling case studies in my recently-published book, Product Design and the Supply Chain: Competing through design, were of fashion retailers that prospered—and continue to prosper—through skillfully exploiting product design and supply chain agility.
Zara, New Look, Johnstons of Elgin, ECCO: as lumbering High street behemoths such as Marks & Spencer were struggling to shrink product lead-times that stretched months into the future, these more nimble rivals were transforming their ranges in weeks or even days.
Zara, for instance, upturned the logic of aspiring to be a fashion leader, dictating consumer tastes. Instead, it aimed to be a fashion follower, with the goal of responding quickly to changing consumer tastes. Shoppers knew that there would be something new in Zara shops every week, and that 70% of the product range would change every two weeks.
At a stroke, shoppers had a compelling reason to visit its stores—and knew that they would find affordable items that weren’t going to be available elsewhere. With product lifecycles that were that rapid, commoditisation becomes much more difficult, and ‘me too’ copying virtually impossible.
So why haven’t more retailers embraced these examples? Why do they struggle on with extended lead times and static product ranges, even as customers are deserting them in droves?
Because being nimble and agile is difficult. For every Zara, countless wannabe Zaras will struggle, and fail. And yet, as I show in my book, the lessons are there to be learned. Failure is avoidable.
And that’s the real retailing tragedy.