This used to be a very simple answer: two. But in recent years business models have changed on the retail side and on the vendor side. Ever since the market crashed in 2008, retailers have been in the mentality of buy little and buy often. They don’t want to be heavy in inventory and risk high markdowns. This puts brand owners (vendors) in a precarious position with manufacturing. If a vendor doesn’t have the capacity to produce reorders quickly and often then they may loose out on potential sales. Retailers are also looking for more newness more often. They need to keep the retail landscape exciting for consumers. This recent development in inventory management might spin your head and leave you asking: How many collections do I really need to produce?
Lets take a step back within your own business model. What type of business do you want to create? Do you want to focus on slow and sustainable- one collection a year? Or do you want to deliver newness every 3 months in stores? Maybe its twice a year. This is about what drives your desire for brand longevity. How often do you want to do photoshoots, sampling, pitching. You can choose the model, but then you need to stick with it. Consistency is Queen here.
Capsule collections vs. Deliveries vs. Full Collections
There are many ways to deliver product, so lets clarify what they are and how to take advantage of them. Capsule collections have become a favorite amongst brands. Capsules are simply a collection that has about 5-15 skus and are significantly smaller than a “normal” collection size (30-70 skus). I use quotes here because normal is a very subjective word and we all know that fashion is a subjective industry. Brands will introduce capsule collections when testing product ideas or to create exclusivity- limited number of styles and units available.
Deliveries are the dates that your product ships into the stores. Did you know that you could offer to have many deliveries within your full collection? One Fall delivery can arrive 8/30, 9/15, 10/15, 11/1. You can break it up so that there is newness often. And if you pitch and sell it as such, your buyers can then determine how often they want newness.
Full collections refer to the entire collection you are pitching. You can control the frequency by which you release new collections- some brands only sell Spring and some only sell Fall. Other brands do both and include transitional deliveries so there is newness between season.
One comment I hear all the time is: Why are we delivering Spring in February when its still cold out? Retailers know that consumers buy when its needed and that why the “trans” deliveries become an interesting marketing. Trans – short for transitional – is that amazing time of year between spring and fall (Jan/Feb and Aug/Sept), when you are buying markdowns in store and also looking for something new and wearable at that moment.
Once your determine your business model of choice its time to reconcile that with the market. How you communicate that to your buyers is critical. You have to be clear about the deliveries, sku counts and how your product will merchandise season over season. Remember, each collection needs to be able to sit next to one another – one might be on sale and one might be full price but they shouldn’t look like two different brands. When pitching to buyers you will need to be clear about your business model. Your line lists and PO’s should be very clear on delivery dates.
If you are selling online direct to consumer keep in mind that just because you haven’t sold what you expected to sell for one season doesn’t mean it lets you off the hook from creating another season. Too often I hear brands tell me that “its still new to someone”. At the end of the day your brand collections must evolve to tell the story of your brand- even if that’s one collection a year.
So, how many collections a year?
It’s really up to you. Think about your long-term strategy and let’s play with the new business models. This concept doesn’t just apply to new brands. If you are launching a diffusion line, a new retail store or revisiting your current business model, its not too late rethink your retail strategy.
The SAP Retail Forum is a yearly conference where industry leaders gather to discuss new technology in retail and the future of customer service and sales. This year I had the pleasure of attending and speaking on the topic of Social Selling: how to leverage popup shops, mobile and social to sell to customers. I touched on four distinct case studies: Warby Parker, JCrew, Fruit of the Loom and Nordstrom’s. All brands that are creating noise to gain customer visibility. I’ve included a couple slides below from the presentation. The major takeaway was: brands need to engage in attention arbitrage when selling and use cohesive campaigns that are disseminated through online, offline and mobile to sell and create effective brand stories.
I got to see amazing new RFID technology that allows sales associates to know when customers take product off the shelf. New shopping bag technology that will allow customers to walk out of a store and pay with their profiles and never have to swipe a card or stand in line. There were many “wow” moments.
One of my favorite speakers of the conference was Doug Stephens. Doug is a retail futurist and is always looking towards the future of how selling is evolving. He spoke of how the brick and mortar store is becoming a media outlet, and referenced a popup shop we all know well- Rachel Shechtmans Story in NYC. Rachel’s ‘store’ evolves a couple times of year and she sells square footage to brands that want to use her space to sell, test market products etc. Doug pushed the audience to think of this question “what if it was free?” What he was pushing these big retailers to think about was how they could sustain their businesses if their products were free. How would they make money? What types of infrastructure and channels do they have in place that they could sell? Could they sell data? Could they rent out space? What is of value besides the product? This is a very important question. Brands create the conversation on all channels: stores, social media, blogs, tv, radio, newspapers, digital ads, billboards, newspapers. Brands can own the market simply by owning the conversation and brands can create the data an infrastructure to become more than just the seller of goods.
So how to build the business that will last?
Start by thinking about your brand beyond the product. What channels do you want to exploit? Where is your customer? Where can you dominate and be the best? Don’t try to be everything to everyone- be something powerful and poignant.
Next, create content that does not center 100% on your brand. No one wants to be in a world that is mono brand. In fact, most consumers are mixing high and low. Think about your ideal brand partnerships- where are they? What channels are they exploiting? How can they create a larger conversation with you? How can that create value for your customer?
Once you establish the how’s and why’s now its time to monetize. Think about your valuable data on the niche market you are catering to. Who would find that useful? How about the brand partnerships you have created? How valuable is the conversation? Could you charge for co-op advertising? Create events? Think about the value of the brand, not the value of the product. If you hone in on your customer and the conversation you won’t have to build a business based on what worked last year, you will be building based on what customers are asking for tomorrow.
Creating value doesn’t just happen on the front end, it happens on the backend too. One of my clients opened up a retail store, and simultaneously created a distribution center and ecommerce platform. The model allowed her to have sustainable revenue streams coming in from both the front end with customers and on the backend with other brands. And since she had the retail space already there was only little that needed to be done to up the shipping systems to allow for creating extra income.
Ok, ready to rumble?
Take a step back and look at what you have already created or want to create. What is the bigger picture here? What value/story can you create? What if what you were selling was actually free? Think big, think beyond your brand.
Luxury brands are jumping on the bandwagon of Snapchat. Burberry, Everlane and Valentino have all become active users of Snapchat in the last 2 years. Why? Because the demographics of Snapchat have changed- when launched the platform quickly became a favorite in the 18-24 year old market and now there is an increase engagement amongst users in their mid 20’s and up (38% of all users). As brands look to actively engage on many platforms to capture the attention of the consumer, being on a platform like Snapchat has become a necessity.
I first heard the term “attention arbitrage” used by Gary Vaynerchuk. Attention arbitrage is the act of trading your time for attention. Snapchat is a great example of this. Brands and people are spending lots of time creating content to capture the attention of their community. Vaynerchuk has famously, in recent keynotes, given himself lots of credit for forecasting the rise of Snapchat. But is Snapchat the right platform for the luxury space? Should this be the way to capture the audience?
The luxury market has undergone a huge shift in the last 20 years. What once used to be a closed market, reserved for the Christian Dior’s and Chanel’s is now a wide playing field with the customer determining what defines luxury. Brands like Maiyet focused on sustainability, community and style have been able to make a mark in the space because of these shifts. Consumers are making decisions on personal values, individual aesthetics and a desire to curate ones life. This has forced the luxury market to evolve. Here is where the social media platforms come in.
Early adopters in social media are also striving for a sense of individuality. They want to be the first to make a mark on new platforms and the brands that meet them there are at an advantage. The recent wave of 25+ year old adopters to Snapchat will be the bridge to a critical mass of users. So where will your brand be? The luxury brands adopting Snapchat are adding a level of transparency to their brands to create a sense of connection. As a small to medium sized brand you have the greatest gift of transparency: one that needs to be curated, but not manufactured. How does one justify spending $3,000 on handbag? They show how its made, they talk to the artisan. How does one create a sense of belonging to New York Fashion Week? They show the behind the scenes with the models. Brands are even now doing specific product launches just on Snapchat to give followers an exclusive (i.e. Glossier).
But Syama, do I have to be on another platform?
I am a huge proponent of meeting your customers where they are. If you want to get ahead of the retail masses then start a consistent Snapchat channel before everyone jumps on board. You will get the chance to be one of the business accounts that a new adopter of Snapchat would follow. Once the user base reaches its height, all the small and medium sized retailers will be on it; and you will be one in a sea of accounts trying to get followers. Sounds a little like Instagram right?
Instagram just rolled out Stories? Does this make Snapchat obsolete?
The new stories functionality is a great attempt to take over the Snapchat market, especially for the older users who don’t want to start using another platform. BUT, just like how Instagram was the newer playing field for Facebook, Snapchat is the newer playing field for Instagram. More instant, more transparent and more engaging. Instagram is becoming the new pay to play space with advertisements, just like Facebook. Snapchat is raw and not yet monetized in that way.
Re-evaluate your social media strategy. If you cannot be on all the channels then pick the ones you want to fully max out. There are also trends to watch out for; Facebook is a pay for play platform, Pinterest is leading the way on social selling, Twitter is great for peer to peer but not for sales, Instagram is rolling out new features for businesses to optimize sales and YouTube continues to be the best long form branded platform for evergreen content. The live options on Facebook, YouTube and apps like Periscope are wonderful for event based content and weekly series type content. Snapchat is leading the charge with Snapcash and might be giving users an option to the China based WeChat platform. If you haven’t heard about WeChat it is a social selling app where you can chat with friend and buy inside the app. Again, pick your platforms and max them out. In addition, stay on top of the new platforms that launch and consider which of them are going to attract the early adopters you want to engage with. Right now I’m checking out Hyper and Jelly.
For a startup brand social media can seem like a can of worms. There is no way to start, than to start. I suggest thinking about how you want people to perceive your brand, then find the platforms that allow you to do it easiest. Don’t create the same content for all channels and think about how you would want each channel to feel like they are getting something special directed to how they best engage. Example: It’s easier to take polls on Facebook than on Pinterest. If you want your audience to be actively engaged with product development or marketing ideas then build out your Facebook with active conversations.
Brands that have been around for a while need to ask themselves: Does it make sense to be on all the social media channels? Are all of them working? Are there trends that I have not been paying attention to? What are the new channels? If you have a content team that can manage all your channels, then amazing you can do it all. But, if you are a small company and the time you spend on social media is literally the time that could be spent on the phone with your manufacturer, then you need to be critical about your time and efforts. Be where your customer is, don’t waste your time being where they are not.
Syama Meagher is a retail strategist for brands and retailers. She works with growth stage businesses and helps entrepreneurs launch and grow fashion businesses through ecommerce, wholesale and brick & mortar. Syama is a former at Barneys New York, Gucci, AHAlife and Macy’s. To build your brand and create a profitable business check out www.ScalingRetail.com and email email@example.com
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