Traditional stores expand, e-commerce innovates

"While there have been rumblings of a slowdown in fast fashion growth due to lack of sustainability and unfair/unsafe labor practices, consumer spending has not slowed significantly."

The remarkable success of apparel retailers can be attributed to scale rather than any unique associations with their brands. H&M alone has more than 3,000 stores in 53 countries and continues to increase its number of stores by 10 to 15 percent annually. By the end of 2014, it will have three multi-story flagships in Manhattan in an apparent attempt to capture market share from competitors like Zara and Forever 21.

Beyond real estate dominance, these big players ably manage to stay on top of trends while feeding shoppers’ social media appetites. The fast fashion model, in which companies design and manufacture their own product quickly and cost-effectively, continues to keep prices low and inventory fresh.

While there have been rumblings of a slowdown in fast fashion growth due to lack of sustainability and unfair/unsafe labor practices, consumer spending has not slowed significantly. Nevertheless, in the wake of garment factory disasters in Bangladesh, most notably the 2013 factory collapse at Rana Plaza that killed more than 1,000 people, global fashion companies—from H&M and Inditex to Primark and Tesco—pulled together to sign the Bangladesh Fire and Safety Accord. Many of these same brands have also won green plaudits for pledging to detox garment production.

Despite the extra supply chain scrutiny, traditional brick and mortar brands continue to build flagships as exciting destinations and high-volume performers, move into new areas, and encourage sharing through social media marketing efforts. Hering has expanded into kids’ clothing, Mango plans to push into plus sizes, and Bershka hopes to see success with exclusive wardrobe maximizing capsule collections. Asia’s biggest clothing retailer, Uniqlo, has ambitious goals to become the world’s largest retailer by 2020—with or without a big acquisition.

For the past several years, innovations in the apparel category have come from online-only companies, such as fashion eyewear retailer Warby Parker and Bonobos, known for superior fitting slacks. While such retailers have limited inventory, it is available to sample, highly relevant, and affordable. By serving a narrower consumer base with more specific needs and desires, these young brands are delivering high returns to their investors.

One particularly clever brick and mortar innovation comes from Hointer, a retailer that makes shopping for jeans a breeze, especially for men. In Hointer’s Seattle pilot store, shoppers use their smartphones to scan a floor sample instead of rummaging through racks and shelves. The app directs the shopper to a dressing room where the appropriate size is delivered robotically within 30 seconds. A purchase transaction can be completed on a tablet in the fitting room. Store expenses are minimized and shopper convenience is maximized.


As apparel category leaders continue to explore the use of technology in their retail spaces and improve service across channels, they are well positioned to maintain market share.

Apparel Innovations and Opportunities

A mobile app that puts a new spin on showrooming Japan’s largest online fashion brand, Zozotown, launched a mobile-social app called Wear to drive fashion lovers into stores by leveraging data from its 5 million consumers and 500,000 product code numbers from its merchants. Wear is described as a mobile Facebook for fashion. Users share one another’s looks for inspiration, create wish lists, and scan the barcodes of items they find in brick and mortar stores to share or purchase. If purchased on, the showroomed store gets a commission.

Shoppable store windows, immediate delivery

In partnership with eBay, Kate Spade Saturday experimented with interactivity and same-day delivery via 24/7 “window shops” placed in vacant stores in New York. Shoppers made their selections from a touch screen, entered their phone numbers, and a messenger was dispatched with their goods for which they paid upon delivery.

Online players need stores too

A growing number of online companies believe the future of retail is at the intersection of brick and mortar and e-commerce. For example, Bonobos, an online technology-driven men’s clothing brand, opened Guideshops in eight U.S. cities. These Guideshops, or showrooms, enable consumers to sample and later purchase online. By increasing real world interaction with customers through showrooms, kiosks, and pop-up shops, online players are not reverting to a traditional offline model, but rather using offline to enhance the overall customer journey.

An entire lifestyle revolving around a brand

Taking the idea of a flagship one giant step farther, Urban Outfitters unveiled plans for a 6.5-acre “lifestyle experience” in Pennsylvania, similar to the “mini-cities” developed by IKEA. It will feature Urban Outfitters and Anthropologie stores, a Terrain garden center, eateries, and a boutique hotel. In a world in which consumers are faced with a plethora of choices every time they shop, apparel brands that go the extra mile to deliver service, convenience, or an extraordinary experience will gain competitive advantage.