In recent months, there have been numerous news reports about fashion brands being forced toclose dozens or hundreds of stores. Some of them have even had to close all their stores and are trying to survive by selling exclusivelyonline. Shopping malls that were hugely successful just a few years ago are now being forced to close as all the stores shut down.What is happening in the fashion world that is causing the retail landscape to change so rapidly?What does the future hold for retail?Will there be room for small or emerging fashion brands? Will we end up buying everything from the giantpure-playonline retailers?
These questions are not easy to answer in a world where changes are happening at a dizzying pace. However, we firmly believe thatthere will indeedbe a place for those brands that have a unique selling point that captures our attention. From the demand side, the end customer will always seek out novelty, differentiation, and a brand whose values they identify with. On the supply side, barriers to entry in the sector have dropped significantly. It’s not as difficult as it was twenty years ago to create a fashion brand and start selling it, butthe market is saturated, and we have to work hard to get customers to notice us.
A few days ago,I had a meeting with twoISEM alumniwho wanted to consult with me about a new brand launch project they were working on. Once they had explained all the details regarding their target audience and their idea for a unique value proposition, I went on to outline thethree key areas they should focus on to carve out a niche—even if it’s small—in a market saturated with brandsand dominated by digitalpure playerswith significant logistical capabilities.
What are the most important factors?While in the past, opening physical retail locations was essential for reaching customers, today’stechnology makes it much easier to build a brand from any city in the world and serve a very large geographic area. As for price, it has become an important factor in the purchasing decision, but it is not the most relevant factor if we areable to offer something that the customer values highly andis willing to pay for (this is the concept of “value” or the “quality-design-brand/price” ratio). Finally, having anextremely wide product range is a distinguishing factor for large brand aggregators (from department stores to Amazon or Alibaba), but it is not relevant for an emerging brand.
So, if factors such as access, price, or inventory—mentioned earlier—aren’t that essential for a fashion brand, what is relevant? My answer to the students is that they musttake great care with the brand, the product, and the people who will make up their team. The brand is the main asset a startup has, and for that reason, it’s essential that we be able to write down everything that comes to mind about it and each of the products we launch on the market:storytelling must never stop.As for the product, in a saturated world full of knockoffs andcommodities,the key lies in paying the utmost attention to its development and production. It must be exceptional, very well thought out, and convey the brand’s values without the need to look at the logo. Finally, the people we surround ourselves with will be key to carrying out our project.Their level of commitment and the results they deliver will enable us to strive toward achieving our goals as a companywithout incurring excessive overhead costs.
Luis Lara,an expert in internationalization
He holds a bachelor’s degree in Business Administration and a law degree from ICADE – Pontifical University of Comillas (Madrid). He has also completed an Executive Development Program at ESADE Business School and the General Management Program atIESE Business School, both in Barcelona. He has been working in the fashion and retail sector for more than 20 years. He has held executive positions at leading companies in this sector and has advised retail and fashion companies on their international expansion. He was one of Inditex’s four international directors between 2000 and 2006, playing a key role in the expansion of Zara and the company’s other brands in Central, Northern, and Eastern Europe, the Middle East, Latin America, and Asia.
He is currently a Managing Partner at Retalent, a company specializing in consulting on the development and internationalization of fashion and retail brands, as well as a professor at ISEM Fashion Business School (Madrid). He is the author of the book: “Why Some Stores Sell and Others Don’t: Keys to Success in Retail” (2012). Published by Libros de Cabecera, Barcelona.
