New Consumption, New Concepts? Which new formulas

NEW CONSUMPTION, NEW CONCEPTS?

We are growing into a world that demands new rules. This is a huge brand-side challenge, especially as today’s consumers buy differently – both online and offline. What’s at the top of the “to-do” list on the corporate side? How does a brand or company adjust to the fact that consumption has changed completely? Industry professionals provide answers. Text: Janaina Engelmann-Brothánek, Isabel Faiss, Kay Alexander Plonka, Nicoletta Schaper. Illustrations: Claudia Meitert@Caroline Seidler

Valentin von Arnim, Managing Director of Iris von Arnim

“The theory is correct, even for our market. However, we are driven by a different resulting development. At a time when consumption is often all about the experience, the product is pushed into the background. We create fans through trust and enthusiasm. We achieve this through honesty and an outstanding product. This, combined with real personality in service – that is to say: really taking care of the customer – is what distinguishes us despite the huge oversupply of goods.”

TIME-TO-MARKET MENTALITY DISTINCTION DESPITE OVERSUPPLY

Marco Marchi, President of Liu Jo

“There is no denying that climate change and digitisation have revolutionised shopping habits. Customers now inter act with the brand in a faster and more straightforward manner than in the past. In this scenario, Liu Jo strives to provide consumers with superior quality and unique shopping expe riences. I also believe that we need to adjust our industrial production system to a time-to-market mentality that places an updated, responsive business model at its centre.”

Sandra Christina Gonçalves, Business Manager at Lightning Bolt

“Our brand core encompasses nature and people. The most important thing for us is the customer, whose needs we take very seriously, with the aim of constantly improving this relationship. Technology is our great ally, because it helps to make purchasing faster and more efficient, for maximum customer satisfaction. In general, we brands are at a turning point. Nobody is waiting for us! That’s why Lightning Bolt has recharged its business to adapt to the new digital age of high-speed trading.”

MORE SPEED TURNING POINT

Thorsten Stiebing, Managing Brand Director of Joop

“Consumption has, of course, changed, but not radically enough for us to no longer generate excellent business with the classic retail trade. In principle, digitisation is an opportunity for companies. We started exploring this opportunity a long time ago, be it in terms of product development or the visualisation of products. There are new concepts that make perfect sense both in the supply chain and at the frontend. This makes the touch points in retail and e-commerce more interesting; procurement becomes more visual and gains more speed. We are developing rapidly. Every successful company is well advised to invest in future-oriented technologies.”

POSITIVE IMPACT Carolina Alvarez-Ossorio, Marketing & Communication Director at Ecoalf

“Traceability, transparency, and quality are the key factors for the future. I believe these terms will become standards across the industry. Customers want to know where a product is from and what it is made of. Merely providing this information is not enough for customers. They want to know the impact of buying that specific product or brand. Customers are eager to know what they are wearing – and they want to do good.”

TAILOR FOR THE CONSUMER André Berger, Handstich

“In my opinion, the answer to this question lies in the keyword ‘Consumer Direct’. We must tailor our business model, our product, and our service even more precisely to consumers and their needs – at all levels. Those who fail to succeed in decelerating their customers, to present them with a really excellent story that motivates them to remain with the brand and engage with the product, are investing in the wrong areas. Classic channels such as traditional advertising and messages simply no longer work. Brand message, experience, and values must be tangible, excit ing, and transparent for consumers.”

Filippo Chiesa, owner of Sealup

“On the one hand, everything has become much faster, meaning that end consumers make purchase decisions very swiftly. On the other hand, we are now operating in a global market, meaning that there is no longer a need to focus on individual markets. I firmly believe that this new form of consumption can be satisfied with innovation, speed, and passion. We have been pursuing this approach since 1935. We have experienced many major changes and mastered them well. That is why we are optimistic about the future.”

CREATE DESIRABLE PRODUCTS MASTERING CHANGE

Valentino de Luca, owner of Lucky de Luca

“I believe the answer is to create desirability – not only through selection and availability, but also through product design. Of course, it takes courage to buck the trend by opting for a different design than the mainstream, but I think that is what custom ers are looking for: variety, uniqueness, and interesting products in line with the zeitgeist.”

NEW FASHION ≠ NEW GOODS, BUSINESS ≠ SELLING

Fashion is supposed to offer rapid variety, be environmentally friendly, and remain affordable – all at the same time? This sounds like a paradox that only expensive marketing can keep in check. When the shopkeeper’s soul breaks free from the compulsion to sell, lucrative ideas can ignite. Text: Petrina Engelke

1Serial Monogamy for Fashion Lovers

The fashion business still relies on the sale of new goods – at least for now. Who says that a dress or trousers can only make the cash register ring once? Second-hand was yesterday. Americans invented the beautiful term “pre-loved” for today’s second-hand clothes. Now “resale” is a huge business that attracts customers with an exciting variety at a low price and sustainability. Luxury labels could see this as a threat – or as a marketing opportunity. Stella McCartney, for example, has entered into a partnership with luxury second-hand retailer The RealReal. Customers, who re-sell their pieces, receive a voucher. Burberry, on the other hand, rewards US customers with High Tea and a personal shopping session in one of its stores. It’s clearly not that easy to break free from the new goods principle.

2Department Store Treasure Hunt

The RealReal and online second-hand giant ThredUp focus on the desire for mixing it up that Millennials and Generation Z are copying from influencers. They want to embark on a treasure hunt – and thus invade the metier of professional buyers. It is therefore all the more intelligent to harness their talent to establish a resale business. US department chain Macy’s has brought in ThredUp for this purpose, exclusively with brands that Macy’s doesn’t stock. This has not only enhanced the product range, but also the reputation among younger people – in one fell swoop.

3Farewell Pride of Ownership

Buying as the basis of consumption is outdated, especially in luxury fashion. Social media demonstrates what status is really about. It’s not about owning, but showing. No wonder that the rental business is flourishing. Rent The Runway has made a name for itself by providing the appropriate wardrobe for gala dinners, weddings, and graduation balls. The company is now valued at more than one billion US Dollars. In the case of Une Robe Un Soir, the name says it all. LSWOP, on the other hand, specialises in sneakers and implies status by saying that a club membership is required for participating. This membership can only be obtained by invitation – a boaster subscription of sorts.

4Permanent Time Limit

Stitch Fix is not willing to merely rely on isolated occasions. In 2018, the company generated sales of around 1.2 billion US Dollars with fashion packages on subscription. For a monthly flat rate, customers receive a fixed number of garments depending on the selected plan. More pieces are sent upon return of the initial package. Constantly offering something new has opened up a wide field. The Rotation, for example, relies on streetwear subscriptions featuring Yeezy, Carhartt WIP, and Stone Island. US department store Bloomingdale’s has jumped on the bandwagon with its own subscription service, as has Rent The Runway. The latter now also offers bedding and decorative cushions on a temporary basis.

5Dirty Laundry Business

Less glamorous brands are snapping at their heels. Express, American Eagle, and Scotch & Soda rent out parts of their respective ranges on a monthly basis. Caastle specialises in the technology and logistics in the background. In Europe, RE-NT makes it easy for brands to manage rental services with a simple button for online shops and the transparency of blockchain technology. At the end of the day, someone has to store, clean, and check the loaned goods before they are re-shipped. This is also a quality inspection of sorts. An everyday clothes rental service can only be profitable if the pieces survive more than two cycles in the washing machine. A more sustainable production could become a side effect of this line of business. While rental companies are scoring points with their laundry services, no established fashion brand is exploiting this service potential itself.

6Patchwork in the Business Model

Tailoring and repairs are obviously closer to their hearts. As in the electronics industry, Patagonia even buys back its own products, mends them, and then sells them a second time at a lower price. The Renewal Workshop specialises exclusively in the treatment of used clothing. The company cleans and repairs clothing on behalf of manufacturers such as The North Face. Ensuring that clothing is prepared for another stint within a circular economy has an inherent ecological factor.

7Fabric Breeding and Fashion Printing

R&D is also a service gold mine. Developments in 3D printing are paving the way for print-on-demand, which has created a market of its own in the book industry. Such processes can also be licensed or offered on a subscription basis, as can formulas for new materials. In order to harness such opportunities, however, fashion entrepreneurs would have to be prepared to pull out the binoculars and look far beyond the horizon.