Photos: Foot Locker/Nike/Adidas
Are fashion trends moving too fast for retail?
With the influence of mobile and social media pushing styles in and out of fashion at a breakneck pace, some retailers are admitting that they aren’t able to catch up.
“The fact is that we’re seeing mobile technology drive shifts in consumer behavior and spending patterns at a faster pace than our industry has been able to keep up with,” said Dick Johnson, CEO of Foot Locker on his company’s August 18 second-quarter conference call. “With constant access to new influences, trends, information and ideas, consumers’ attention spans are getting shorter, and we’re seeing that they’re moving from one style to the next faster than ever before.”
Foot Locker’s second-quarter results came in well short of Wall Street’s expectations as same-store sales fell 6 percent.
The sneaker retailer is working with suppliers to significantly shorten the product development cycle, including reducing ordering and manufacturing lead times and even storytelling and marketing timelines.
“This consumer has access to an awful lot of information about products,” he said. “So while we buy on a six-month future sort of window, trying to carve off some open-to-buy that have more flexibility for in-season opportunity is just really important.”
Hibbett Sports, which also recently delivered disappointing quarterly results, is facing similar issues.
“Things don’t last as long as they used to be,” said Jeff Rosenthal, CEO, on Hibbett’s second-quarter conference call. “The vendors have to get much quicker on bringing new products faster to the marketplace because people want new.”
To react faster to trends, Urban Outfitters’ team during the past quarter shifted from buying the majority of product prior to selling time to buying a smaller percentage upfront and chasing the majority on a fast-turnaround basis.
Trish Donnelly, global CEO, Urban Outfitters Group, said on her company’s quarterly conference call, “While the introduction and adoption of the new business methodology is never perfect and this new way of working is still a work in progress, our adoption of a process for making product-related decisions closer to delivery date is a very meaningful step and we believe it will set us up for future success.”
- Foot Locker, Inc. Reports 2017 Second Quarter Results – Foot Locker
- Foot Locker’s Q2 2017 Earnings Call Transcript – Seeking Alpha
- Hibbett Reports Second Quarter Fiscal 2018 Results – Hibbett Sports
- Hibbett Sports’ Q2 2017 Earnings Call Transcript – Seeking Alpha
- URBN Reports Q2 Results – Urban Outfitters
- Urban Outfitters’ Q2 2018 Earnings Call Transcript – Seeking Alpha
Discussion Questions
DISCUSSION QUESTIONS: Do you support the contention that digital’s influence is causing trends to move faster than ever? What remedies do categories with traditionally long lead times, such as footwear, have in responding quicker to trends?
Poll
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Nikki Baird
VP of Strategy, Aptos
Digital has helped create an immediacy in consumer demand the likes of which retailing has never seen. “Fast” fashion has become “hyper-warp-speed” fashion. Trends that used to last a season now last weeks. The impact of these expectations has put significant pressure on retailers’ ability to select, source and fulfill consumer demand. Traditional approaches to product buying and supply chain need to adapt. Buying later, buying smaller and moving quickly will become a necessity for retailers to successfully compete against more nimble online and offline retailers who are able to deliver.
The need for speed is one aspect but it’s an offshoot of the bigger dynamic: retailers are no longer dictating fashion and trends, they are responding to consumers’ shifting whims. Foot Locker has the right idea by carving out open-to-buy for more spontaneous opportunities but, at the end of the day, the fashion and footwear industry is still locked into a months-long, buy-ahead model that is out of step with reality. Amazon is a factor here as well (when are they not?) as they have redefined fulfillment and convenience. The next nail has landed in the form of Amazon’s proliferating private brand offering, ensuring that all kinds of “looks” will be a click away. Married with Prime Wardrobe … well, you get the picture.
Yes! Retail is no longer the influencer in this process. (If anyone in retail is still able to influence, it’s the store associates who embody the lifestyle the customer aspires to, and can sell it well.) Shoe retailer M. Gemi has mastered the careful balance of slow, ethical fashion delivered conveniently — their tagline is “made in Italy the old way and sold online the new way” — with new limited editions dropped once a week. When they’re gone, they’re gone. Larger brands ought to take notes on the small batch approach to reduce waste and retain their customers’ attention.
I completely agree. Shoppers used to look to retailers as tastemakers. Now that is no longer the case. Shoppers know exactly what they want before they even start the purchasing journey. Instead of going to your trusted retailer to discover trends, the discovery process is happening online and on social media. Shoppers then look through as many retailers as it takes to find what they want. Small batch and limited edition products are definitely a way to keep shoppers’ attention amid this shifting dynamic. Cultivating celebrity, influencer and brand partnerships is another strategy that seems to be working well.
Social media may be a factor in fashion trends going viral and moving faster. But the influence of “fast fashion” retailers (Zara, Forever 21 and others) shouldn’t be understated. They mastered their supply chain in order to bring new goods to the selling floor a lot faster and in order to react to early test orders in a big way. Most traditional retailers built their logistics around long lead times, especially on private-brand goods, and are scrambling to catch up.
The idea of “speed to market” requires a change in mindset — affecting supply chain management, the willingness to chase big ideas and the ability of retailers’ vendors to move just as fast.
I think there are many factors involved. If customers were only interested in the newest item then why are off-price stores doing so well? Off-price stores sell the leftover and discontinued items. Store branding and marketing are also a big part of the equation because these stores tend to lack true identity about why customers need to shop them and not their competitors. The bottom line is that it comes down to the in-store experience.
The article doesn’t mention how many sales the retailer lost due to customers leaving Foot Locker and Hibbett Sports because of a poor in-store experience. Dick’s saw a small comp store sales increase during Q2 so what are they doing that their competitors are not? The point I’m making is that retailers need to look at everything when they are losing sales. It’s easy to blame this or that, but the wise retailer will realize there are many pieces to the puzzle and they need to address each of them. Of course having the right product is important and so is a competitive price, but the ability to “wow” the customer will always go a long way to help make the sale.
Time as a value unit is redefining society in every way. This asset has worth and is increasingly the element on which investment is made. So as consumers place higher value on time, the retailers’ use of it will make engaging with them and their processes more costly in the eyes of consumers. Physical retail has to provide value and return on time, supply chains must be more responsive to demands and the digital experience can add value from discovery to purchase to produce use.
The issue isn’t whether or not trends are moving faster, but rather that trend awareness has undeniably sped up. The truth is that 20 years ago, by the time teenagers in Peoria were wearing what they thought fashionista club kids were wearing in the East Village, the Village hipsters had already moved on to the next big thing months before. The difference today is that Peoria and the East Village are only separated by a click and a few microseconds making real-time trending part of the installed infrastructure of a digitally networked life.
As to what manufacturers can do there are several plausible strategies starting with leveraging 3-D printing and other rapid prototyping tools, shortening production runs, capitalizing on the cachet of limited editions and items “only available for a day or week” and of course getting ahead of trends by using a variety of trend-shaping tools from guerrilla celebrity placements — paying a celebrity to, say, wear your shoes in Instagram photos instead of ads — or using social media to create your own fashion mavens.
It isn’t easy and the failure rate will — at least initially — be higher than most traditional branders and retailers are comfortable with but the alternative is predictable and dismal.
The speed of fashion is one aspect of a wider set of issues. Among these are: a constant consumer craving for newness, more variable weather patterns, a breakdown of traditional selling seasons, a more dynamic competitive environment, boredom with fashion and the rise of a global consumer able to buy clothes from anywhere in the world.
All of this means fashion retailers have to be nimbler, faster and much more flexible. How to achieve it? Shorter production runs, open buying, closer integration of manufacturing, increased regularity of stock turns, greater use of capsule collections and more flexible global supply chains are all possible answers.
Zara is the ultimate example of getting this right, although its size and scale mean what works for Inditex will not necessarily work for other retailers.
Accelerating the buy process is only a piece of the puzzle. Getting new products into stores and on to shelves is another. Retailers are slowly re-thinking their store supply chain processes, but their efforts lack urgency. It’s almost as if they’ve either given up or don’t understand the gravity of the situation.
Yes, the trends are moving too fast for the product development systems most retailers have spent decades setting up. Way too fast. This is a result of the long tail of e-commerce: search anywhere for anything and get it now. That premise just sped everything up, which is why specialty retail is in such dire straits (that and too many stores of course).
No one could’ve predicted the fact that you can see a trend on the street and go home and have it shipped from anywhere in the world to your doorstep in a day or two. But it certainly looks like that’s at the core of the seismic change in retail today.
Personally, i love it.
Ubiquitous bandwidth and remarkable advances in the smartphone have completely disrupted the calculus of consumer purchase behavior. In the main, the pace of change in brands’ and stores’ systems and processes has yet to catch up with those changes.
The future will include the top-down trend setting by brands and retailers as well as an increasing share of bottom-up social media-influenced trends. What is necessary here is to stop projecting the past into future processes. Fresh ideas, people, processes and supporting technology are necessary to execute on multiple, and at times competing, dimensions. Traditional thinking about trade-offs and optimization of what has been successful in the past is detrimental to identifying future growth, let alone achieving profitable operations.
We are collapsing time to our peril. Here on RetailWire we recently discussed how retailers could respond instantly to consumer demands for no other reason than they have zero patience. Heck, the NFL is selling six-second commercials now!
The big challenge is that supply chain will never keep up with imagination. And technology is enabling creatives to turn imagination into reality almost instantly. There is no point in worrying about how to keep up. You won’t.
A better discussion is whether we know the difference between a “fad” and a “trend.” The two pairs of shoes pictured above differ mostly on the basis of aesthetics and design. They will be replaced by Friday. I’m told the two most popular submissions to Kickstarter-type sites are wallets and backpacks. They will continue to come and go. When Dick Kelty invented the first backpack in 1952, he started a trend. Almost every alteration since has been a fad.
I wouldn’t start a man’s tie company at this point or worry about what width to stock because a tie-less trend has begun as our culture recognizes ties as pointless. As someone said, “No one has ever had a good idea while wearing a tie.”
Retailers who avoid chasing fads and who see trends before anyone else will rule the day. All 24 hours of it.
Fashion is always ahead. It takes the “regular” consumer a bit of time to catch up to trends. Having said that, retailers have a precarious spot of trying to hit the trend and capitalize on volume without holding the consumer back from their fashion tendencies.
Retailers need to cut layers off their processes and find ways to shorten the inventory they have to stay flexible. The other thing retailers should be doing that caters to a shorter, more experiential journey is finding craft brands that have smaller batches and will be more nimble than a traditional six-month supply chain.
I’m not sure that this is the whole story. Ironically, there is a press inquiry in my inbox as I write this, from a reporter looking for commentary on how Millennials are getting more considered in their buying, looking for less but higher quality.
“Fast” has to be balanced with “sustainable.” I don’t think it’s fickleness and flocking to the next big thing that is driving the pressure to be fast. It’s that if consumers see it, they expect they won’t have to wait six months before it makes it into distribution. If they see it, and want it, they’ll find it. And if you don’t have it, you lose. But there are environmental consequences to “fast,” and ethical ones, and Millennials and Gen Z are increasingly conscious of those.
So yeah, lead times need to be shorter. But don’t think of this as disposable fashion — good for a few wears and then off to the next. I think that will turn out to be a mistake.
Trends have sped up — partly a reality driven by retailers who now suffer from having encouraged what makes their jobs more difficult.
And there’s no easy solution. Modern retail and online commerce pricing models are built around mass production — but mass production requires reliably big orders with the advance time to manufacture and distribute.
I’ve worked with retailers on attempts to shorten that cycle — something has to give. And if consumers demand the absolute freshest in fashion it can only come with higher prices. Unfortunately, I don’t also see a willingness to pay more for these hyper-speed fashion changes.
Online selling isn’t a solution given that most online sellers are leading the race to the bottom — meaning they also are unable to establish high enough margin to pay for speedy change-over. Unless they focus on higher prices, this fashion only makes their bad economic model worse.
So what’s the answer? What I don’t see in the fashion world is much leadership establishing trends. Retail cannot survive as purely reactionary — waiting to see the trend then dashing to fill it. Retailers must, somehow, get ahead of the game and lead.
Yes, the influence of digital marketing and social media on shopper decision making is tremendous. When you can shop with your smartphone 24/7, having to wait a month or two or six to get a desired product in your hands is asking a lot. While H&M and Zara benefit from constantly improving a fast fashion supply chain strategy, the in-season equivalent for fashion designers, “see now, buy now” has not worked so well for Tom Ford, Thakoon, Burberry and others. Smart retailers are reassessing their production methods and supply chains to determine what works best for their products and customers. Running after trends is not the answer.
Yes absolutely. Bottom line, brick-and-mortar stores are in competition with their own websites. The stores can’t possibly carry as many things in stock as their online version nor keep up with the ever-changing stock. So most times we don’t bother going to the stores at all knowing they probably won’t have what we want and we just make the guaranteed purchase from their online store.
It’s possible that retail’s drive for shorter ordering and manufacturing lead time, as outlined in this article, actually amounts to the wrong approach. Yes, retailers are absolutely right to observe that mobile- and online-first consumers very often want an everything-under-the-sun selection. But here’s the reality of shopping cycles in 2017: when consumers want massive selection, they can shop online.
Meanwhile, Urban Outfitters is making an interesting play — buying a smaller percentage of available inventory upfront. Truth is, when it comes to brick-and-mortar retail, there is too much product on the shelf. Retail has defaulted to offering just about every option that a manufacturer presents them in the showroom — and that’s not to the industry’s benefit.
Consumers don’t want to see the same merchandise on the selling floor for months at a time. Stocking less of it and cycling through ideas more often gives them a reason to re-visit a store. This allows new inventory to shine through and it moves the in-store experience out of the maze of massed-out merchandise. Focused and exclusive collections that highly knowledgeable associates leverage to create person-to-person moments — meaningful experiences that expand the underlying purpose of traveling to a store and that change frequently enough to keep the feeling of discovery front and center for the shopper — this is how we cut the knot of everything/all-the-time in the brick-and-mortar space.
Foot Locker’s third quarter results are ahead of expectations even though all their major numbers have declined. Probably their reorganization actions have helped them to beat The Street’s expectations. Not only Foot Locker, all the sports shoe stocks are kicking the bears. Shoe Carnival and Hibbet stocks are also having a nice surge today.