STOCKHOLM, Sweden — For those of you who are waiting for the good old times to return, I’m sad to say your wait will be fruitless. This is not a perfect storm of sluggish economies and changing customer behavior, which will be followed by the sunshine of a once familiar market place. The only definite on the horizon is change and lots more of it. And, as yet, there is no new business model to cope with this turmoil.
Turmoil is in fact the new normal. Fears of a “Grexit” have been followed by fears of a “Brexit,” which will be followed by the US presidential election and the possibility of either candidate ripping up trade deals. Add currency wars and policy changes as populism sweeps the global electorate. Terrorism is a generational struggle, not a passing conflict. It’s been 15 years since 9/11, but no end to the attrocities is in sight. Although the current trifecta of cheap oil, low interest rates and high employment should have been a turbocharged catalyst for retail, it hasn’t been. And high oil prices and rising interest rates — which would be devastating to our sector — are both inevitable.
I guess you are feeling down at this point? It is about to get worse. The digital revolution has ripped up the fabric of brand building. E-commerce provided an infinite retail space where brands and products that had historically never been merchandised together, that had for decades been separated by department store floors or entire streets, now sit side by side for your easy comparison. Worse still, consumers obsessed with social media are all working on their autobiography, written one social media post at the time. The late Steve Jobs said: “Life is about creating and living experiences that are worth sharing.” Consumers agree, choosing to put their money into everyday experiences and travel instead of consumer goods.
What did the fashion industry do? First, we lowered prices. Then we raised prices. Then we put the whole lot on sale. Low prices were not enough to galvanise consumers suffering from retail apathy. They failed because price is only an enticement to shop if customers coveted the item on sale in the first place. On the flip side, we trained the willing shopper to go where the promotion was, pushing the same consumer between the same retailers around and around and around…
When that strategy didn’t work, we cut jobs, stores and marketing. “Let’s do less and wait,” seems to be the current sentiment in the market. The retail establishment is scratching their heads over a younger generation that buys pieces, and not collections. These customers buy items for their design and quality, but are a lot less bothered about brands than previous generations.
With seemingly no light at the end of this retail tunnel, how can we find our way out? If they do nothing, household brands will slowly slip into oblivion as their current consumer base ages and younger generations simply forget about them.
However, don’t despair just yet. While we are entering a retail environment where it is survival of the fittest, your brand can still grow and prosper if you are willing to let go of the marketing rulebook of seasonality and dictatorial messaging. Instead, you should embrace change and ‘act with purpose.”
To “act with purpose” is nothing less than synchronising your brand with the millennial customer so that you matter today, tomorrow and in the future. What does it take? It boils down to three pillars; great product, ongoing integrity and lifestyle enhancers.
Shoppers want the right design and the right quality in relation to price. Brands such as Saint Laurent and Mansur Gavriel offer this — Saint Laurent, through careful editing, seasonal carryover and an eye for detail, and Mansur Gavriel through a single well-designed and well-priced product, which consumers instantly took notice of and told each other about. Moreover, in today’s ever more agile world, the ability to react at speed and bring great product to market that is built around external events and influences in fashion or culture is a key part of staying in sync with your consumers.
This is the reassurance that the brand will never compromise its purpose to do business, and that it isn’t seeking sales by any means necessary. Many companies confuse integrity with availability. You can be widely distributed and still have integrity. To have real integrity, your brand must stand for something — it must offer a clear reason to exist and therefore to have an ongoing role in consumers’ lives. Patagonia and the Honest Company both have customers who know exactly why they shop with them, because buying Patagonia and the Honest Company products makes them feel like they are contributing to a better world. But it’s not just about doing the right thing. Ongoing integrity can also be about doing your own thing very well like Han Chong’s Self-Portrait or Charlotte Tilbury cosmetics. The effect is building and sustaining a cycle of trust and a relationship rooted in your products that is hard to replace — again creating synchronicity.
In the ‘90s, consumers looked to brands for inspiration and guidance as they sought to buy into a lifestyle. Today, they instead want brands to understand their lifestyle and to work with them to enhance it. Most marketing is still based on selling a dream for consumers to aspire to. That dream is harder to sell when access to information has lost its value. Today’s consumer doesn’t need a brand to define his or her aspirations, he or she already knows how they want to live and are looking to see if your brand is a part of their world or not. Success stories such as Mr Porter and Under Armour play an active role by adding value to their consumers lives through content and technology. Being a lifestyle enhancer means accepting your consumer is living their own life first and then seeing how your brand can fit in — i.e. can be in synch with your customer.
Looking at today’s marketplace, there is a clear thread of behaviour connecting the winners . They are all making exciting products at the right price, and that have integrity. They sell products and services that enhance customers’ every experience, and are brands that are an integral part of customers’ lifestyles, rather than dictating to you. These brands aren’t trying to be all things to all people, but instead, relish their position as experts. It is these brands that are synchronising with millennial consumers, rather than being left behind in the dust with Generation X.
In short, winning requires a conscious decision to “act with purpose.” Brands need to accept that we are in the middle of a generational consumer revolution, unprecedented since the post-war era. The faster we embrace this, the faster we can start to put purpose, innovation and communication back into our organisations. Marketing is becoming less about dressing up a product and more about constructive engagement with an audience who has many things on their mind — not just you. If you fail to tell them what you are doing differently or to remind them of what you are doing well; if you fail to enhance their lives or forget to engage them in ongoing stories, then they’ll simply buy from someone else — another competitor or fast fashion outfitter that either does it better or sells it cheaper.
In a world turned upside down don’t forget everything you know, but be prepared to do everything differently. Albert Einstein once said; “The measure of intelligence is the ability to change.” If you want to have a fighting chance in the future, do what Einstein once advocated: be intelligent, embrace change and always “act with purpose.”
Jens Grede is co-founder of Saturday Group, a multi-media fashion marketing agency.
The views expressed in Op-Ed pieces are those of the author and do not necessarily reflect the views of The Business of Fashion.