Where Are We Heading?

W WE HERE N G ?

ARE Stagnation means regression. The fashion industry is changing, profoundly and structurally. Online retailing is booming, vertically integrated businesses are expanding their sales areas aggressively, and brands are pushing their own retail concepts. However, to quote Kafka: “You create paths by taking them”. style in progress approached the industry’s opinion leaders and asked in which way they think differently and which new ideas they have, as well as what they already do differently to tackle the change in our industry. Text: Kay Alexander Plonka. Illustration: Claudia Meitert@Caroline Seidler HEADI

RETHINK

RENUNCIATION OF SENSELESS CONSUMPTION

“At the start of 2012, I decided to refrain from buying new clothes for a whole year. The initial idea was to prove to myself that I can do it. However, it turned out quite differently. And yes, I persevered by the way. I spent a lot of time looking into how the clothes I buy are produced. Usually the items were purchased from H&M, Promod, Desigual, and similar companies. At first, I was overwhelmed by all the information. Seamstresses are paid wages on which they can’t even survive in Bangladesh, there are no acceptable safety standards, unfiltered toxic chemicals are dumped into rivers by factories, and farmers hand influence to corporations as they need to buy genetically modified seeds on a yearly basis. In Cameroon, small holders have to grow so much cotton on their fields that there isn’t sufficient room to grow food to feed their families. The list goes on and on.

SEASON

“The fast pace of the industry can be dangerous for the retail industry, especially in terms of liquidity. The period during which a collection can be sold at reg ular prices is getting shorter. The customer is being taught to wait for the sale phase or ‘bestsellers’ and ‘must-haves’. I have started to purchase irrespective of the season. If I wouldn’t, we would need to sell scarves in July and swimwear in the first week of January, because that’s when they are delivered. The customers are

I was asked again and again what my plans for after the shopping diet are. What happens next? I didn’t really know at first, but it became clear to me gradually. It can’t go back to how things were before. (Editor’s note: Read more at http://ichkau fnix.wordpress.com) My entire consumer behaviour has changed. I realised that, in my capacity as consumer, my money is my power. Everybody wants my money and I can decide who gets my money. Accordingly, I don’t only buy a lot less clothing than before and have renounced the ‘fast fashion’ principle completely, but I also exclusively buy organic, fairly produced, and second hand clothing. ‘Because I’m worth it’ is a well-known advertising slogan that, in my opinion, tries to portray shopping as a re ward. The ‘fast fashion’ industry wants us to see fashion shopping as an incidental act. Why not buy a new top for an evening party? After all, it only costs five Euros. In truth, the top comes at a much higher price. The price is paid by the environment and workers alike. I no longer go shopping; I buy clothing when I need to - modest, ecological, and fair. Because I’m worth it…” Nunu Kaller, consumer spokesperson

PURCHASING

WHAT'S THE STORY 035 RETHINK. STATEMENTS IRRESPECTIVE OF

at Greenpeace and author/blogger of IchKaufNix flexible, but we are trying to return the seasons into the correct order. A practical example proves that it is impossible for customers to buy a good bathing suit at the end of July. We strive to change that. Today’s customers don’t want new goods every week, but a selection that remains up to date for a longer period. We quite deliberately avoid some cruise and in-season collections. How are customers supposed to follow the ‘New In’ communication when even we, who deal with the collections on a daily basis, are struggling to do so? Our mix of street wear and luxury brands is steadily enjoying more success. This development has been apparent ever since we opened the store five years ago. We are also pleased that the presentation of items from the introductory price segment next to high-end products is so well received by our customers.” Herbert Hofman, buyer & creative director at Voo Store Berlin

REACTING TO STRUCTURAL CHANGES

“For a sales agency like us, it is very important to detect changes in the increasingly complex and, above all, fast-moving industry in time, to react accordingly, and to remain true to our principles and aims in the process, thereby ensuring that we remain a sustainable business partner. In times of demographic change, the topic of personnel development is at the top of our agenda. Well-trained, committed, and motivated international junior employees constitute an important part of our team. Their global experience and focus ensures that we are always on the cutting edge; we utilise their influence to create an ideal trade channel for the German, Austrian, and Swiss markets. To this end, we have adapted the brand portfolio to the industry changes and the associated online trend. Our portfolio offers our customers a clear - yet still diverse and in ternational - product selection in both the premium and street wear segments. We serve different tastes, age groups, and sales concepts. Through close cooperation and intensive communications with producers and designers, we find market-specific solutions for our brands’ collections. Openness, reliability, and flexibility are qualities that have accompanied us on our path to our goals for many years and they enable us to do our job with passion and a high degree of quality. Personal contact always comes first. The permanent maintenance of contacts and excellent service - the physical act of trading - remains irreplaceable for us. Thus we see the combination of all the aforementioned factors as an ideal way to conduct business successfully in times of structural change within the fashion industry.” Angelika Malzacher, owner of MaschAgency

INTEGRATING SUSTAINABILITY

“We live in a saturated market and in a multi-option society. The notion of not being able to decide what to buy due to the fact that EVERYTHING is available has almost become a widespread disease. It simply isn’t enough to focus the purchasing process super ficially on the entire range of themes or to add a couple of candles and books to the POS. The customer group that represents the largest part of revenue is mainly defined by clothing and utilises fashion as a distinguishing feature. These customers want to be surprised, animated, and inspired. We need clear, comprehensible topics with face and heart, as well as authentic, fascinating product presentations. In my opinion this means the following for 2015: if custom ers whip out their smart phone, take a photo, leave a positive report on a social media platform, and leave the store with a bursting shopping bag, they have clearly been successfully seduced! Sustainable shop ping can also trigger a good feeling. Mid-September 2015, we significantly expanded our sales areas for sustainable products, redecorated them completely, and further developed the original concept, which was focused on green plants, cartons, wheat, and jute. The new concept should visualise as many aspects of sustainability as possible; the entire sales area is decorated with up-cycled materials. It boasts recycled designer furniture, a carpet made of recy cled plastics, and tables made of metal from a scrap yard. We also make sure that regionally sourced materials are used. The sales area should be fully integrated into the overall concept of Kastner & Öhler, but should also remain provocative. However, the most important thing is that it stands for fashion!” Christian Adelsberger, purchasing manager at Kastner & Öhler

THINKING INSTEAD OF EXTERNAL REGULATION

“Over the past couple of years I keep on hearing that both retailers and manufacturers are yearning for the good old clearance sale. I do understand the background of this desire. We can actually solve the problem ourselves by delivering goods corresponding to the seasons. I think we can all agree on when the cold winter months are and when it is most likely to be warm in summer. So why are winter goods delivered in June and summer goods delivered as early as December? This puts the retailers under unnecessary pressure and shifts the core period of the seasons into the wrong months. We all know the consequences for consumers, retailers, and manufac turers. The consumers can’t get seasonal items in the designated months, the retailers can’t take full advantage of the season and the corresponding weather, and the manufacturers argue with their production plants regarding production deadlines that ensure the goods can be delivered early enough. In my company, we don’t feel compelled to abide by the specified cycle. In consultation with our customers, we deliver winter goods in September/October and focus our sandal delivery dates on the warm summer months. The great thing is that the absolute majority of our retail partners share our views. This way of joint thinking can be applied to so many other areas. The basic attitude is the most important factor. We don’t need to rethink, we just need to think. We enjoy this deliberation process and the dialogue with our partners and it certainly has a positive effect.” Felix Engelmann, owner of Haptiques Trading Company

COMMUNICATE AND DEVELOP GLOBALLY

“After ten years in the retail industry, as co-managing director, buyer, creative director and human resources manager, I decided to make a change at the end of 2014. In addition to many factors, the fact that the industry has changed dramatically over the last few years was certainly one reason for this rather big step. The pressure, which has come to the forefront at both small, innovative and global companies, is especially noticeable in the highly specialised retail sector. In view of the globalisation of the retail industry along with the accompanying communication means (social media), this development is quite understandable. This is where my consulting agency comes into play. I try to expand the line of sight to ‘global’ without losing sight of the local retailer and the particular circum stances of the national market. A manufacturer distributes products into different regions, but the new media channels cross boundaries. Today’s consumers are well informed and can basically determine the availability of a certain product in real time on an international level. My work has become globalised too. An interesting field of activity appears to be developing in the Far East. Systems, processes, and strategies that have established themselves in Europe, or in western-oriented economies, can sometimes be adapted for these relatively new markets. I am excited about the developments expected to happen within the next one to two years, especially because the developments over the last three to five years within my current field of activity seem to be happening almost twice as fast in Asia.” Jörg Haas, founder & director Beinghunted. net.work

LIVE BY VALUES

“For me, the term ‘do things differently’ doesn’t mean ‘swimming against the tide’, but stands for reinterpretation and seeing things in a different light without neglecting basic principles. If designs are - as is often the case - merely copied, it leads to monotony, which is what we are currently experiencing in the fashion industry far too often. A little bit of this and a little bit of that - we try too hard to keep everyone happy. Often we don’t even realise that the balancing act of remaining credible and authentic is becom ing increasingly difficult. And suddenly consumers are ahead of the industry and on the lookout for something completely different. I want to achieve my goals with as little compromise as possible. In this respect, our Wunderwerk label follows a very simple principle. We primarily produce fashion at an excellent price/performance ratio - period. Quality, fit, and timeliness are prerequisites to play a role on the market, not merely in a niche. Sustainability, respect for humans, nature, and animals, and mainly European production sites, as well as the use of natural resources like organic cotton and wool from controlled biological livestock, are self evident for us and deeply enshrined in our corporate DNA. This includes buttons, yarns, and even pocket linings. If the implementation with sustainable techniques isn’t possible, we simply don’t do it or try to achieve the objective by other means. That’s what we mean when we say we are ‘more than organic’. And we want to exemplify that philosophy. The positive feedback from customers and growth beyond expectations proves that we have the right approach. Fashion is about enjoying new things, innovations, and leaving the comfort zone. And it should be clear that one has to think about tomorrow, right?” Heiko Wunder, managing partner at Rheinstoff GmbH & Co. KG

MORE EMOTION AND A RETURN TO OLD, TRUE VALUES

“We are receiving positive signals from stationary retailers and online retailers alike. It seems as if the myth of online retailers being the huge enemies is relativising itself. The stationary retailers are beginning to recognise the opportunities afforded by personal contact with consumers and, in some cases, ‘multi-channel market ing’ has been implemented successfully. One can feel a certain togetherness. The trench warfare between online and offline seems decided. At the end of the day, a few online platforms, that conquered the market early with a highly professional approach, will survive and the number of stationary retailers remains relatively sta ble. Every trend has its counter-trend and, therefore, the stationary retail industry will experience a renaissance when the opportunities of our information society are evaluated correctly and exploited professionally. The lack of emotion in the fashion industry does, however, give me a headache. This is a result of the flood of information. The leitmotifs of purchasing departments are no longer emotion, taste, or style, but lists, figures, and sales results. The stationary retailers must have learned this from the online retailers. In turn, online retailers react to the lack of emotion within the online business by introduc ing virtual shopping consultants. To me, the trend of the counter-trend is pre-programmed. We simply need more emotion in the fashion industry. Our transparent society leads to a de-emotionalised society and the life within the digital swarm leads to the desolation and loneliness of the individual. A transparent society is a society defined by mistrust and suspicion; it focuses on control due to declining trust. Thus, the moral foundation of society is fragile and values such as honesty and sincerity become less important. So I am hoping for the trend of the coun ter-trend: more emotion, more honesty, and more sincerity. It’s actually quite simple. We need to return to old, true values.” Mark Grütters, owner of Fashion Factory

MORE ALL-YEAR PRODUCTS

“Due to fewer trend impulses within the market, the retail industry will need more identity in the future. Based on this fact, only concepts with a clear message and target group can be successful in the upscale retailing segment. A buying process that is split up into summer and winter seasons is techni cally a thing of the past. The retail industry needs at least 80 to 90 percent all-year goods, which are renewed by utilising different delivery rhythms. To date, the very narrow seasonal differentiations and wrong delivery rhythms result in permanent discount sales in stores. Retailers need to push their performance and DNA to the fore again, instead of focusing on price promotions. This is the only way to ensure that the consumer enjoys shopping again and recognises an appropriate price/performance ratio. The goods are currently treated like ‘junk food’. The focus on the essentials applies to both my retail operations and my agency. In my agency, I have always focused on a limited number of products and have always valued the service concept very highly. This has proven to be very successful over more than 30 years.” Rolf Griesinger, owner of Internationale Mode GmbH

STRENGTHEN OWN PROFILE

“In our capacity as luxury retailers, we simply need to face the fact that most of our brands, labels, and collections are now widely available at many mono-stores or online shops. This means one can, theoretically, buy a flat by Charlotte Olympia in Wuppertal or Paderborn, not only in London or New York. What does this mean for us? We want to continue to establish ourselves as a brand and strengthen our own profile. It is not only necessary to put together a fine, meaningful selection, but also to ensure that the customers feel pleasure when buying from us. With Uzwei, our new store concept, we follow that philosophy in a very determined and consistent manner. The editorial approach is to compile different themes, provide different stage designs over a season, and to attempt to create a lifestyle that appeals to young and fashion-oriented consumers. I’m very happy about the fact that we seem to have succeed ed in developing a certain brand loyalty within a year. Fashion-oriented women sometimes purchase a bag by Loewe, Proenza, or Stella McCartney because they trust the style and selection of our editorial team. The more defined the Uzwei profile is, the easier it is for us to bring more clarity into the product range of Unger. As we fight for fashion-oriented, cu rious, confident, and enthusiastic consumers in the high-end segment, we can also broadly cover the luxury segment at Unger, which often leads to winning back eager customers who are struggling to navigate through the world of mono-brand stores. It’s almost impossible for customers to cover their entire seasonal requirements solely via the stores run by international luxury brands. How often does it happen that one hunts down a ‘must-have’ item, only to find out that the lack of product depth means that the shoe by Hermès, the trousers by Bottega, and the suit by Dior are not available in the correct sizes. I have been monitoring the changes within our industry for many years and time will tell whether our strategy, ideas, and approaches are the right ones. However, I strongly believe that luxury retailers are no longer system compatible without a clear handwriting and profile.” Florian Braun, managing director at Unger GmbH & Co KG

PUSH FOR CHANGE

“The greatest appeal of fashion is that it can be new and fresh. Our interest in this aspect of fashion fuels our faster collection changes, which don’t even spare the venerable haute couture. However, that hampers the creativity of fashion designers, who have less and less time to work on innovations and often have to be content with re-combinations that are, from a creative point of view, mere finger exercises. Luckily it is becoming increasingly clear that creativity is not the only resource that falls by the wayside. Other resources come off badly too, such as the people who produce both fast fashion and high fashion for renowned brands in inhumane social conditions and can’t even finance their own lives on their wages. And let’s not forget natural resources, such as water and energy. Raw materials such as cotton have become so scarce that the whole industry needs to reconsider its approach. In this sphere of the industry, change is not fuelled by pure reason, but by constraints. A shortage of raw materials is such a con straint, as is the rising energy cost. In this context, ecological change is initiated and new methods are tested. Jeans made of recycled cotton, jackets made of recycled PVC, and the concept of the closed cycle (in which old resources are recycled) are but a few exam ples. Social change in terms of the working conditions at producers - from the designer to the textile workers - is also only fuelled by constraints. Bad publicity, such as in the aftermath of the Rana Plaza catastrophe, is such a con straint. The change that the fashion industry needs happened in the food industry a long time ago. Consumers can research which chicken has laid their eggs. Fashion, however, remains a largely anonymous product; fashion seems to fall into the store shelves from the sky. I want to change this fact. In my capacity as a fashion journalist, and especially via my start-up named Fair-a-porter, I strive to initiate change on two levels. I try to inform consumers about sustainable fashion and offer them a platform to consume fashion con sciously by curating a range of transparently produced fashion items. I also offer brands that produce sustainably a platform to present their product range. I don’t only showcase the best, but also those who are on a good way - good and best practice, so to speak. With Fair-a-porter, I’m working towards a fashion industry in which the passion for fashion is alive and well, but under different circumstances. Pseudo-innovative products with a short half-life should no longer be desirable, but carefully and transparently produced fashion that benefits everyone: the customers, the many producers, and the environment.” Alex Bohn, journalist www.fairaporter.com

DO YOUR HOMEWORK

“It is important to know who your customers are. The product needs to be positioned accordingly. The best case scenario is when you can adapt your production to the realities of the market in a manner that allows you to always react to market developments in time. When choosing your partners, you should make sure that there is constancy and re liability in terms of management and that the partners don’t change direction like a flag in the wind every six months.” Fares Hadid, managing director at Berlin Bicycle Week

CREATE NEW CORPORATE CULTURES

“The change within the industry certainly poses one major challenge: the acceleration of almost all processes. For example, just think about how short-lived trends have become. As retailers, we need to tread new paths to ensure that we remain successful in our fast moving market environment. We believe that this also requires changing certain elements of our corporate culture. In some areas, it seemingly makes sense to loosen control mechanisms in favour of allowing more autonomous decision-making at the operational level. Communication is one example that comes to mind. We are pursuing a new approach in this area, especially in terms of social media activities and co-operations with bloggers. Instead of specifying content in detail, we relinquish control quite deliberately. We are very curious about the mid-term results. However, I am already convinced that the faster and more competitive environment will cause other trend-sensitive companies to require more freedom for autonomous action. The buying department is a good example. Our customers expect us to offer cutting-edge products. As “cutting-edge” has also become short-lived, we need to ask ourselves whether traditional sourcing processes still allow us to react quickly enough to trends. It is vital to avoid losing both competitiveness and identity in an increasingly fast market. That is the challenge caused by change today.” Dipl. Ing. Markus Dielmann, managing director at Dielmann Group

LESS TALK - MORE ACTION

“I think we are still doing way too little differently. The world has changed over the last decade and our behaviour as consumers even more. The fashion industry has fallen behind and is struggling to catch up. Nothing has really changed, except for the online business. The stationary retail industry is still the same. We attend a trade show, then place a pre-order, and half a year later everything is different to what we expected and, once again, we are all speechless and stunned! We are like politicians; we can discuss issues for hours at trade shows. We moan and groan, but at the end of the day we are surprised that nothing has changed and that the inevitable has happened. Then there are the top-sellers and the customers who are willing to buy those top-sellers. However, there aren’t enough top-sellers and the customers’ behaviour is still underestimated! Why do customers not behave the way we want them to? The answer is because we have all changed our behaviour in terms of spending money! And what does the retail industry do? Retailers are merely monitoring the situation, visiting the same trade shows as always, and utilising the same order system. There is hardly any replacement stock in the warehouses and a distinct lack of flexibility. The question is when one should change and should it be noticeable for customers or only for oneself? When do we manage to buy enough top-sellers to give customers what they are looking for? The “Italian Holiday”, which took place on the 15th of August, is a very good ex ample. Should we open the shops? So far, this day wasn’t particularly successful. After long discussions - and because the month of August was tough enough as it is - we decided to open all six stores in Innsbruck’s Old Town. Lo and behold! August was saved by record sales generated by shopping guests from Asia, Dubai, and forward transactions with VIP regulars! Locals, Chinese, and sheiks bought the top-sellers of the autumn season in temperatures of 30 degrees! This means for us that local/global business is the order of the day. And this particularly hot summer has convinced us to continue our plans to offer more new autumn items from July onwards in the future, to start the summer sale even earlier, and to learn a new ‘fashion language’ every year! This is how it works in Innsbruck.” Theresa Minatti-Einwaller, buyer at Einwaller

SPEED AND INTUITION

“To be new and modern - also because of the crisis - we have to think about fashion in a different way. We have to know that what we do creates trends, because it has also changed the way people dress and feel in terms of fashion. Usually those who don’t follow fashion create trends. And we also think that’s the way to follow to reach the markets that are always changing. Today, the fashion and the markets are changing and moving very quickly. Right now, high fashion is leading the way, but it can suddenly turn to technical outerwear. To respond to the changes, we need to be fast and intuitive, with the aim of covering markets with smaller collections, rich in detail and with a well-defined DNA that suits all markets. To remain contemporary, we should propose more delivery dates throughout the year, to ensure that we can offer the consumers a wide range of products.” Enzo Fusco, chairman at FGF Industry Spa