The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — During Paris Fashion Week in late February, as the deadly coronavirus continued to spread, Svenja Maria Macmillan, the wholesale and operations manager of Copenhagen-based fashion company Birger Christensen, knew the industry was about to run into big trouble.
Birger Christensen operates two brands, Rotate and Remain, that are wholesaled to over 300 retailers around the world. But this season, as buyers began skipping their Paris appointments for fear of catching the contagion, Macmillan’s team grew concerned about meeting sales targets. So, they turned to Joor, a digital wholesale buying platform connecting retailers and brands. They uploaded extensive imagery of their latest collections, and had buyers place orders directly on Joor instead of via their traditional face-to-face appointments.
“We weren’t using Joor as extensively during other periods, but now we’re relying on it for business,” Macmillan said.
In recent weeks, the coronavirus has become a global pandemic, infecting at least 167,400 people in over 136 countries and causing economic damage on a massive scale. Many businesses suffer disruption to both supply and demand, while others are forced to shutter physical locations such as stores and offices. But there has been unmistakable upside for companies offering digital connectivity solutions, like tele-conferencing.
Zoom, the popular video conferencing tool, has seen its stock shoot up even as global markets have crashed. No fashion software company has anything like the scale of Zoom, which has a market capitalisation of $30 billion. But digital services like Joor are poised to benefit from the coronavirus crisis as fashion is forced to adapt to new ways of working.
Joor, which was founded in 2010, is an online marketplace for fashion brands and retailers, connecting brands like The Row, Marni, Loewe, Golden Goose, Marc Jacobs and Stella McCartney to retailers like Forty Five Ten, Harrods, Neiman Marcus and Shopbop. It digitises the wholesale experience, allowing brands and retailers to buy and sell directly through its software; it also aggregates sales trends and allows for fewer duplicate orders.
Companies need to operate as if normalcy will return, otherwise they are guaranteeing it won't.
Joor’s gross merchandise volume in 2019 was $12 billion (the company declined to disclose further business metrics). Those sales were a fraction of the overall fashion wholesale market. That’s because most of the fashion world still prefers to do wholesale business in person. But that could be about to change, at least for the foreseeable future.
“Companies need to operate as if normalcy will return, otherwise they are guaranteeing it won’t,” said Simeon Siegel, managing director and senior analyst at BMO Capital. “Having fresh inventory will be key.”
“Retailers can’t touch your product, but they can still do everything else if you’re set up the right way,” said Kristin Savilia, Joor’s chief executive, describing the platform.
Joor also provides brands with virtual showrooms, where retailers can see entire collections in detail via imagery or video. Savilia said the company has seen product sales from this feature more than double since the outbreak of the coronavirus.
NuOrder, a competing digital wholesale platform used by companies including Lacoste, Vince and Arc'teryx, will waive the fees of its digital catalogs for new retailers and brands using its software during the course of the coronavirus pandemic.
Jeff Abrams, the founder of LA-based fashion brand Rails, said he plans to focus on video content for his wholesale strategy, assuming trade shows are cancelled. His team is preparing to film entire presentations of its collections, as well as videos of product details to upload to both Joor and online video platform Vimeo. “We’re preparing for a digital process that does not involve human interactions,” Abrams said.
Many brands that have had to close stores are hoping that a pivot to e-commerce will make up for some lost sales. “Working from home or staying at home may well drive more non-work screen time, which would give marketers additional shots on goal,” said Siegel. “Whether they convert is another story.”
Indeed, the race is on to bolster online sales, and some fashion companies are turning to technology enhancements for a boost. For years, retailers have attempted to leverage technologies like 3D imaging and various “try before you buy” solutions, some powered by augmented reality, to drive up conversion rates, with limited success. But Siegel believes now is the time for these kinds of innovations to shine.
Retailers can't touch your product, but they can still do everything else if you're set up the right way.
Ordre is a virtual showroom company that specialises in 3D imagery of fashion collections, using machines, which look similar to airport security scanners, to do on-site image capturing at brands for about $55 an image. According to chief executive Simon Lock, the company has worked for the likes of Gucci to produce imagery to entice buyers from third-party retailers since the coronavirus outbreak (Gucci declined to comment). The company recently announced a partnership with Joor: the platform's software now supports Ordre's imagery. But Lock is now encouraging brands to deploy 3D imagery to their e-commerce sites as well, to help with customer engagement.
Ordre has seen demand go “through the roof” recently, said Lock, who declined to disclose specific performance data. He admitted that the company was currently facing obstacles of its own due to the coronavirus, as it becomes harder to scan products in luxury brand showrooms in cities like Milan and Paris. Ordre has service centres in London, Paris and cities in Asia, and Lock said the company is now asking some brands to send samples directly to Ordre for scanning instead.
Connected Sales Associates
A technology that's been useful for some fashion retailers as coronavirus spreads has been livestreaming. Hero, a start-up that connects customers to store associates through a livestream application, is used by the likes of Credo Beauty, Levi's, Nike and Harvey Nichols. While stores like Credo Beauty and Rag & Bone have shuttered due to the virus outbreak, they currently have store associates selling to customers via the Hero app.
Hero Chief Executive Adam Levene said livestream shopping during the time of coronavirus has been particularly successful: conversation rates between shoppers and stores were higher in the first few weeks of March than any other time in 2020. In the US, the average order placed through Hero was also up 20 percent during the first two weeks of March.
Work-From-Home Design Tools
As more fashion design teams are gearing up to work remotely due to the coronavirus outbreak, Jeremy Cai, the chief executive of Italic, a direct-to-consumer fashion brand, said that product lifecycle management (PLM) tools, which help manage the process of making merchandise from concept to production, will be the glue that holds teams together.
Italic uses a PLM called Backbone, which is also used by companies like Allbirds, Outdoor Voices, Kith and Chubbies, and helps companies track inventory calendars, update designs and stay on top of factory communication. “PLMs are the holy grail in retail because it allows you to do everything digitally before you go into production,” Cai said.
It's very difficult to do product development in fashion digitally.
Utilising digital factory communication tools will be increasingly crucial, as companies are currently assessing inventory quantities for upcoming seasons. Abrams of Rails said his company typically produces a 20 percent excess of product, but said most wholesale companies will likely have to cut back on factory orders.
“We’ve already seen some accounts of companies in quarantine areas postpone goods because people can’t get to stores,” he said. “We need to be mindful about how deep we are going to go into an overstock position.”
Cai added that digital tools which ease the design development of fashion products are also essential as more companies require people to work from home. While teams rely on Slack for all types of group discussion, software that allows for comments on details like patterns or tailoring tweaks is becoming particularly important when entire design teams might not be able to meet in the same room for the foreseeable future.
Italic uses AirTable, which Cai describes as “Google sheets on steroids.” Italic can upload product images onto the software and have its team provide feedback on the most precise details before the final version is sent to a factory for a fashion sample.
Some tech companies, like The Fabricant, a virtual fashion house based out of Amsterdam, have been pitching brands to digitise their sample process entirely. Companies like Lululemon, Nike, Adidas and Walmart already use the software Browzwear, which allows them to experiment digitally with their designs.
But professionals like Cai are quick to note that even with technological innovations, physical samples must still be a part of the process. “If you don’t have it in front of you, it can feel like guessing in the dark,” Cai said. “It’s very difficult to do product development in fashion digitally. There are a lot of efficiencies that happen in person, which is why this time is difficult.”
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