You Are What You Wear
By Bertrand Chovet
With consumers seeking value for money and businesses hit by higher cotton prices, the apparel sector faces fundamental challenges. Fashion is moving fast, and consumers move even faster when making purchase decisions. Tracking, anticipating, answering, and connecting with shopper behaviors throughout the purchase journey is more critical than ever. To stay in the game, brands need to demonstrate value across all digital and physical touchpoints.
With the soaring price of raw materials, fast fashion brands have to rethink their low-cost strategies and respond quickly to changes in the market. Due to volatile exchange rates and higher labor costs in Asian markets, apparel brands are also exposed to increasingly fierce competition and face the prospect of losing their competitive advantage.
Apparel has suffered from the recession and brands are responding in various ways. Gap is reducing square footage in the US while accelerating store openings in China. Brands such as H&M have not increased their prices to protect their brand position in accessible fashion. Consequently, H&M’s profits have decreased. And Levi’s launched dENIZEN, a global initiative to engage a new generation of denim buyers. It meets customer needs for value while protecting the brand’s premium image. Defending a premium through behaviors, product, or experience is a key requirement for strong brands.
The battle for omni-channel (seamless) retailing has begun. Zara’s online store ensures that the customer’s journey delivers an experience consistent with its physical stores. The brand’s “Dear America” campaign was a key moment in building presence. By inviting 50 photographers to photograph each US state, Zara gained local and national attention. H&M’s online shop features the “Dressing Room” which enables consumers to dress a virtual model in pieces from the retailer’s latest collection.
Touching customers’ lives
Strong brands are moving forward with shopping applications to capture and transform purchase decisions. However, Interbrand has noticed that shoppers expect a richer experience that reflects their taste and values, which means retailers will have to rethink old strategies and develop more organic, thoughtful approaches.
In March 2012, Zara reopened its flagship on New York’s Fifth Avenue, showcasing a revamped architecture and interior scheme. Its innovative approach to interior design is based on four principles: beauty, clarity, functionality, and sustainability – making the brand the best in class for shopping experience. Alongside this, the brand’s Dear New York events, echoing the Dear America campaign, demonstrated that the brand has a real feel for its customers’ interests and a flair for building relationships with them.
Sustainability and corporate citizenship are high on the agenda for all leading apparel brands. H&M presented several initiatives, such as its Conscious Collection and H&M Fashion Against AIDS. The retailer is also now the world’s largest user of organic cotton. In 2011, Levi’s introduced the Water
Because apparel reflects the personalities of consumers, this category offers many opportunities for brands to develop deep connections with their core audiences. At Interbrand, we believe the way forward is to use digital and physical channels to develop a rich customer experience.