Fashion Entrepreneurs, Where are the Opportunities, Right Now?
Anyone smart should be watching the fashion industry right now and looking to see where the opportunities for change and disruption will be coming out of the COVID crisis. As I’ve said many times before, this has been a time of industry realignment and change. So where should hungry entrepreneurs be looking to disrupt the market, and what are the problems that need solving?
For the last 10 years, there has been an excess of surplus capital in the startup space. It is never easy to be an entrepreneur, but I would argue that right now it will be harder for those with mediocre business ideas to raise capital, particularly moving forward in the context of a depressed market environment. Entrepreneurs who want to raise money now need to think hard about their business and their strategy, and if what they are doing is truly disruptive and inventive. We are at the end of a cycle, and the field is wide open for new ideas and change.
So where are these opportunities now? And what should anyone savvy be focusing on? As I’ve spoken about before, fashion faces several issues at current. Larger brands have shown a reluctance to truly pivot or innovate (which is no surprise, why change what works?), but COVID has created some areas where mindful entrepreneurs, I believe, can win:
The Fashion Supply Chain: Right now, true opportunity will come behind the scenes. The plumbing of the fashion industry has so many fissures and cracks and glaring inefficiencies. It’s not sexy, but there is a lot of work here that needs to be done. So look to your supply chain and see where you could make life easier? What can be cut? And if one thing could be changed- what would it be?
Shopping Behaviour: Entrepreneurs should be asking themselves how to disrupt the act of shopping, and shopping behaviors. Consumers are very open right now to change and to the new world. I recently read that several new platforms are arising to tackle these problems, for example, The Yes. Personalization. Customization. Localisation. Streamlining of the Experience. Customer Service. Click & Collect. Rental. Pre-Loved. These are just some among many many themes on the front end of fashion. There are so many areas that need refining right now and that could be improved. So where can things be made better and easier for customers, and how are you going to do it?
Digitization and Digital Opportunities: As I have mentioned, we are streets behind China on this one and we should be looking to Asia for inspiration, but I also believe that in the West we are not taking digital to its maximum potential for our consumer. Something that Asia has done well is understand the behaviour of its digital natives, and provide opportunities accordingly. In the West, we are slower to do so. We make beautiful things online for consumption, but rarely do we attempt to create new digital tools for consumer use and to build the customer/brand connection. So how do we create our omnichannel experience, and integrate digital into our world in a truly seamless manner?
Products and Consumer Preferences: Ah…this is the big question mark. How will consumer preferences and tastes change after COVID, and what will people want? At this moment in time, I would argue that it is a little late to create a product brand in response to the COVID crisis. Masks, loungewear and activewear are here to stay, but that upswing has taken place, and the opportunities in product brands from COVID have passed. I believe there still to be space for Beauty, F&B and Health and Wellness, which are categories that will continue to deepen and expand, but other than that this ship has largely sailed.
Apparel Brands: I believe apparel to be the hardest category to be in right now, and this makes sense, because everyone is scared. It is harder to sell clothes online in the pandemic (return rates are high), and there is currently immense pricing pressure in the market due to an increase in people wearing loungewear, and overstocked inventory pushing down prices of all product in all categories. Given the scare, there is also a reluctance to make new product with the lack of transparency concerning the next 6-8 months.
That being said, this is not necessarily a bad thing. Over the past 10 years we have been inundated with excess product in the market. Great entrepreneurs have been able to create good product and sell it in a relatively undiscerning marketplace. I would argue that what will stand out now is great product. A current example is Jacquemus: inventive and unique product, a beautiful story, and totally in line with the mood of now. There is still space in the apparel market for new brands, but it is about to become a much much more discerning place.
It is about to be much harder to launch a new brand. But there still is room for product that is made with attention to detail, care, and that has meaning that is in line with the current social zeitgeist. These are the apparel products/brands that will win.
So now, if we are to change the industry, I believe we need to put on our problem solving hat and ask what the world needs at this point in time? It probably is not another place to shop, or another average product. However, what we do need is a change in how the industry is operated, increasing efficiency in how goods are transacted, great product, and truly disruptive business models that tap into the zeitgeist of now.
And there it is. The time is now, and the clock is ticking. How will you make your mark?
