What Does It All Mean? Shoppers Take a Stand… Importance of a BRAND.

by JEAN E. PALMIERI

Posted MONDAY JUNE 6, 2011

From WWD ISSUE 06/06/2011

Labels with a strong brand message continue to draw consumers to the cash register.

According to the 2011 Fashion Brand Index by Brand Keys Inc., 29 percent of U.S. apparel buyers gravitated toward brands with a distinct point of view when deciding what to buy. These include Ralph Lauren, Armani, Calvin Klein and Brooks Brothers, among others.

“With every fashion option, from black T-shirts to the latest couture, brand meaning is increasingly a larger factor in the buying decision,” said Amy Shea, executive vice president of global brand development for the New York-based brand and customer loyalty research firm. “This fits with what we are seeing, not only in fashion, but across all the product/service categories we track. Those brands that actually stand for something are being sought out by consumers…when it comes time to decide which brand to buy.”

Seven years ago, fewer than 3 percent of apparel purchases felt fashion brands and logos were important, but that number jumped to 14 percent in 2009 and doubled, to 28 percent in 2010. This year, it has inched up to 29 percent.

“That shows that is not an anomaly,” Shea said. “This is a real change in mind-set. Brands have become more important and that’s how consumers make their decisions.”

In a world “overrun by commodities,” Shea added, “true brands provide meaningful differentiation, which is why so many of the fashion brands consumers feel most engaged with are luxury brands, which have built their houses on emotional meaning.” She said it’s “no accident” that these brands rank high with consumers. “Price isn’t their strong suit; they stand for something.”

But it’s not just luxury brands, with their big marketing budgets, that made the list. J. Crew, Guess, Levi’s and Banana Republic were also ranked high this year.

“The Gap does a ton of advertising but didn’t make the list,” she said. “It’s because they don’t really stand for anything. They have trouble creating differentiation. J. Crew is similar, but made the list. It’s not just the Michelle Obama factor, but it’s also that they’ve carved out a place for themselves by acting like a couture brand.”

The survey was conducted among 7,500 men and women between 21 and 65 years of age.

Straight from WWD… Trend Prediction WTF?!!?

I would like to thank my friend Ben for passing this WWD excerpt along…  I can’t believe I missed it!  This is an actual quote from a WWD article:

“Vegas exhibitors are exploring many angles of the multifaceted nautical trend — everything from Americana preppy and Moroccan Bohemia to Mediterranean Old World Villager. Must-haves include earth-tone linen pants, fisherman sweaters in summer blends, ethnic-inspired printed and washed cotton shirts and anything striped for a globe-trotting lifestyle. Oh, and of course skulls.”

Oh yes people… it said “Mediterranean Old World Villager.”  Does this mean next year’s trends may include the following:

• Lebanese Spice Market Hustler?
• Panamanian Canal Drifter?
• Sri Lankan Lamb Roaster?
• Peruvian Alpaca Herder?

Which trend do you foresee next season?

My Bonobos Experience

By now you probably have a pretty good idea that I really admire BONOBOS…  I like most of the company’s products (at least for the price:quality ratio), their customer service experience, their A+ referral program, their product fulfillment flow and accuracy, their web marketing strategy, the company’s personality, and the overall business model.

My only beef with Bonobos is that I think they overuse the “ninja” term that many tech companies have grown to throw out there to compensate for the fact many of these guys got their asses kicked in school during the 90s.  ”Ninja Customer Service Representatives” just does not sound cool to me (even if you wear  ”Green Crocodandies“). In fact, I saw a banner ad for  Bonobos at UrbanDictionary.com when looking up the word “ninja.”  I’m telling you… great online marketing!

Ninja term aside, I would like to share my personal experience from my recent order with Bonobos.  It started upon receiving this email…

I believe this email came as a result of several referrals I have gladly made over the past few months to many of my style conscious friends (Edwin, Ben, Bobby, etc.).  All I can say is that rewarding referrals is one of the most powerful marketing tools an emerging brand can use.  I INSTANTLY acted upon this offer knowing I had until August 1st to make a purchase and cash my credit in!  I ordered a snazzy pair of Blue Steel Boot Cut Twill Pants for the upcoming summer afternoons I plan on spending with my lovely wife and French Bulldog Lily around our pad in Playa Del Rey.  Upon closing the deal with Bonobos I referred a number of other friends to join in the fun and purchase something from them through their referral function during the checkout process – I was happy so I needed to share and give back some love for the $50 off coupon.

Within seconds of purchasing my new pair of Blue Steels (which came out to exactly $50 w/ free UPS Ground shipping) I received a customary detailed order confirmation with all of the details and tracking info I needed to keep tabs on my purchase as it went through the distribution channel.  Being that it was being shipped from Massachusetts it took 5/6 days to travel across the country (pretty average for ground shipments) and I had no problem waiting.  If for whatever reason the pants did not fit or I was not satisfied I knew Bonobos of one of their “ninjas” had my back.  Check out their return policy for yourself…

I have to say, the order process was flawless – not a single ounce of sloppiness.  After getting back home one night I found this lovely box waiting for me…

The box, the packing slip, the tissue paper, the folding, the polybagging, the barcode, and even the placement of the UPS label was beautifully executed and complemented the overall experience.  As I may have said before… your brand is EVERYTHING YOU DO!!  My Bonobos experience was, top to bottom, a reflection of their brand and their attention to detail.  You may be asking yourself, “Why is this guy getting a b_ _er on over a box with tissue paper and a packing slip?”  Honestly, what I love is the fact that a company is taking such steps to go out of their way and perfect their process in order to give each client a quality experience… it’s not so much about the clothes for Bonobos as much as it is about customer satisfaction (and offering a more competitive price by bypassing retailers).  Yes, the pants are comfortably outstanding, but the confidence and happiness they provided throughout the online shopping experience (and referral process) makes me want to return to them FIRST next time I have a need for a pair of pants.  I hope they never forget what they truly are about when it comes to their brand.

Unfortunately I cannot get this experience nor gain this kind of trust from most retailers (even high-end specialty stores and boutiques)…  I often have to deal with some chump or texting little diva who is not happy to be working lousy hours and doesn’t have much to contribute with regards to information about the product I am buying… and to top it off I have to pay an inflated price due to the mark-ups required for the store to help pay for the overpriced real estate where they are located (as well as an additional few bucks in parking).  There is something beautiful about online exclusive brands….

I love where companies like Bonobos are taking their brands, their experience, and their customers.  It’s not quite as extreme as what Napster did to the music industry, but it is with absolute certainty I see the start of a future where trade shows and the traditional retail environment are going to experience one hell of a ride back to pre “Great Recession” levels.

Apparel 2.0 – Sunshine, Rain or Snow… Online Sales Continue to Soar

Storm Boosts Holiday Spending Online

by Arnold J. Karr

Posted Thursday December 31, 2009

From WWD Issue 12/31/2009

Wal-Mart’s Web site saw a 55.1 percent increase in unique visitors in November.

Photo By Courtesy Photo

When the weather outside was frightful, shoppers found online shopping delightful.

ComScore Inc. reported Wednesday that, during the stormy weekend of Dec. 19 and 20, online sales increased 13.3 percent, to $767 million from $677 million during the comparable weekend in 2008. The challenging weather conditions in the Northeast and Middle Atlantic during the final weekend before Christmas kept many U.S. shoppers indoors and online, helping to boost e-commerce sales for the period between Nov. 1 and Dec. 24 to $27.12 billion, 4.9 percent higher than the $25.85 billion spent online during the 2008 holiday season.

Adjusting for an extra shopping day this year, comScore put the year-on-year increase at a more modest 3.5 percent, but that’s still more than a 6 point swing from the 3 percent decline registered for holiday 2008 versus the 2007 season.

Not all of the data shared by comScore was positive. The Reston, Va.-based digital research firm noted that, while there was an increase in the number of people buying online this year, the amount spent per buyer dropped slightly.

Consumer electronics appeared to be the biggest beneficiary of this year’s surge in online shopping, with increases of over 20 percent.

Jewelry and watches also excelled following a particularly difficult performance in 2008. While comScore didn’t provide specific figures on the category, earlier it reported that, in November, sales of e-commerce sites offering jewelry, accessories and luxury goods saw the number of their unique visitors rise 15.2 percent to 17.7 million from 15.3 million in October.

“The season featured a strong start as a result of early retailer promotions and a very strong finish helped by the snowstorms that occurred the weekend of Dec. 19 and 20, retailers’ willingness to offer free shipping later in the season and consumers’ confidence in expedited shipping arriving in time,” said Gian Fulgoni, chairman of comScore. “This was also a year when retailers substantially boosted their use of social network marketing and the larger retailers significantly outperformed their smaller brethren.”

Consistent with the latter trend, comScore said earlier that department store e-commerce sites experienced a 29.9 percent increase in unique visitors last month, to 80.8 million from 62.2 million. Kohl’s Corp., Wal-Mart Stores Inc., Target Corp., Sears Holdings Corp., J.C. Penney Co. Inc. and Macy’s Inc. were among the broadlines retailers with traffic increases of at least 34 percent. Kohl’s was up 59.1 percent, highest among stores carrying apparel, and Wal-Mart’s 55.1 percent increase included a 62 percent monthly growth rate at walmart.com.

“In these tough economic times, the retailers with sufficient financial resources and a willingness to invest in aggressive marketing and free shipping offers were clear winners,” Fulgoni concluded.

ComScore disclosed earlier this week that online sales were up 11.4 percent on Black Friday, Nov. 27, to $595 million, and up 6.4 percent, to $887 million, on Cyber Monday, Nov. 30. However, volume on those days was surpassed by the $913 million transacted online on Tuesday, Dec. 15, when sales were up 21.1 percent. Internet shoppers spent $854 million online on Green Monday, Dec. 14, a 0.6 percent decline more than offset by business on the following day.

On Thanksgiving Day, receipts tallied $318 million, 10.4 percent ahead of the prior year.

Article of the Week: Measuring Fashion Against the Competition

by Evan Clark

Posted Wednesday December 30, 2009

From WWD Issue 12/30/2009

Cashmere sweaters sold well for some this holiday season, but apparel firms are finding tougher competition for consumers’ dollars from hot items.

Photo By Kyle Ericksen

Apple iPhone

Photo By: Courtesy Photo

Fashion’s battle to attract dollars from thrifty consumers highlights a larger, almost existential struggle for the future of the apparel industry — which is already losing its iron grip on consumers’ discretionary dollars.

Despite the collective sigh of relief that the holiday season wasn’t as bad as last year, recent sales trends are still a sobering reminder for retailers. The hottest items this holiday weren’t apparel related but instead were iPhones and other smart phones, BluRay DVD players — even toy hamsters.

Day-to-day, the apparel industry also has a growing number of challengers, from apps to bars and restaurants to automakers hawking hybrids. The industry gets mixed grades for product innovation, marketing and other key business functions — and unless it acts fast, the downward spiral might accelerate.

The good news is observers believe the industry still has a chance to get out of its rut and begin anew.

“Fashion is being outfashioned by other industries,” said Marshal Cohen, chief industry analyst at The NPD Group. “The smart phones have now become probably not only the most passionate purchase, but also an expensive [and] frequent repurchase.”

While 43 percent of Black Friday shoppers polled by The NPD Group online said they had purchased apparel, 49 percent bought electronics, the leading classification. That trend held throughout the holiday season.

And apparel is expected to lose more ground next year. A survey of consumer spending from Kurt Salmon Associates found that 10 categories, from home goods and shoes to electronics and furniture, were headed into 2010 with more momentum than apparel.

To keep the attention of consumers and produce lasting success, fashion companies have to solve a relatively unique set of problems.

Apparel retailers have long lead times and have to basically guess what consumer tastes and even the weather will be like in six or nine months. And the inventory they buy is perishable, something like food in the grocery store, and it rarely makes economic sense to warehouse unwanted looks in the hope they’ll come back into style. The industry has to reinvent itself every few months, moving forward continually, or risk becoming dated.

But that reinvention has slowed on all fronts with the recession bearing down.

“Stores in the fashion world right now, they are dusty,” said Martin Lindstrom, marketing expert, branding strategist and author of “Buy-ology: Truth and Lies About What We Buy” (Doubleday). Although retailers introduced a number of concepts earlier this decade, innovation has largely sputtered, he said. And some of those concepts, such as Abercrombie & Fitch Co.’s Ruehl, have failed.

“They’ve reached a point where they’ve really been falling asleep and suddenly nothing new is happening,” Lindstrom said of fashion retailers. “It’s like going into a museum.”

By contrast, he said shoppers going online, on their computers or increasingly on their handhelds, are “constantly bombarded with new and interesting stuff.”

The wonders of the plugged-in world, from Twitter and Facebook to Flickr and beyond, are now available on the go and for a price.

“The functionality of the latest electronics marks a serious consumer challenge to the apparel industry,” said Warren Berger, author of “Glimmer: How Design Can Transform Your Life, and Maybe Even the World” (The Penguin Press). “There’s a sense out there that you have to have [the latest gadget] to be part of the current debate or the current lifestyle,” he said. “That’s a very compelling sales pitch. In the fashion design realm, you really don’t have that kind of compelling case you can make.”

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Brand executives often brag that their line is like nothing else on the market, but that claim is often scripted hyperbole or too narrowly true to have any real relevance to consumers looking to stretch their extra dollars.

“There are very few needs when it comes to fashion,” said Robert F. Buchanan, a finance professor at Saint Louis University who was an equity analyst for 24 years.

Buchanan pointed to designer denim as the most recent new and compelling apparel offering to catch fire. Fashion companies are being too conservative and too safe and need to let their designers be creative to flourish and come up with the next big thing, he argued.

“I’d give them a D-minus for failing to look past the tip of their nose,” Buchanan said. “Right now, [fashion companies are] too focused on maximizing sales and profit, too uptight. Just let the designer relax and try new stuff out and at some point she or he will come up with something. Quit breathing down their necks because sales are slowing down.”

Publicly held fashion companies are often criticized for chasing short-term gains to turn in the sales increases Wall Street wants each month, or at least each quarter, at the expense of their longer-term success.

Miscalculations are common, forcing fashion companies to try to raise their prices or cut their costs to compensate.

“You have to have high [profit] margins to deal with the ebb and flow and the greater product risk than you have in consumables,” said Chris Donnelly, a partner in Accenture’s retail practice.

“You’re not just fighting the store you’re across the way from in the mall,” Donnelly said. “That’s one battle you need to fight, but you also need to fight this larger battle. It’s an arms race of sophisticated marketing.”

Donnelly described fashion’s reliance on the whims of style as “a blessing and a curse.” Hitting a trend right can lead to a large uptick in full-price sales, but missing the mark is often financially painful. Competitors from other industries are also always there, with a more consistent offering of other types of products to win the shopper’s dollar.

Marketing is the battle that fashion companies — an image-conscious group if ever there was one — are rather well prepared to fight.

“You have to be better at marketing than the average bear if you’re going to be successful,” said Mike Moriarty, partner and head of the retail practice at management consultant A.T. Kearney.

But the industry uses marketing to a different end than, say, consumer products firms.

“The difference in [fashion’s] marketing is that it is not so much reminding the consumer of how good the product is, but actually getting the consumer to get out of their chair and buy something,” Moriarty said. “As a result, successful fashion companies are going to be far more innovative and forward looking.”

Pairing up the right message with the right product is the tricky part.

“The consumer has been so hard to envision in the last year or two that it’s been very difficult for fashion companies to strike that success,” Moriarty said.

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Zhu Zhu Pets

Photo By Courtesy Photo

For the most part, fashion companies are going it alone. Although the design side of the industry gets high marks for cross-pollination with other industries, the business side isn’t known for playing well with others.

“When you talk to a fashion designer, they say that they are always inspired by other things,” said Matilda McQuaid, deputy curatorial director and head of the textiles department at the Smithsonian’s Cooper-Hewitt, National Design Museum. “Fashion design also inspires so many other aspects of the design field. They’re leaders in terms of textile technology. They’re the ones out there trying to get fabrics to do the almost impossible.”

Issey Miyake’s permanent pleating comes to mind, she said.

Fashion is “a leader in terms of design, but at the same time it looks outside of design and looks outside its own parameters to find inspiration,” she said.

That good example isn’t being followed by the suits who run fashion companies. Although the industry has in the past been counted among the business innovators, it has lost some of the spark that put it out in front of the pack in areas such as globalization.

“There have been really key things over the last several decades that the industry has really been on the cutting edge of — the paring down to core competencies,” said Marsha Dickson, chair of the University of Delaware’s fashion and apparel studies department, pointing to outsourcing.

But the type of collaboration and transparency that helped ease production from the U.S. to Mexico and Asia and beyond is now lacking.

In general, the industry “doesn’t like to collaborate,” Dickson said. “It’s very secretive. That innovation that can come from working with others…that unwillingness to be transparent and to be collaborative has probably limited the industry.”

Segments of the fashion business — Dickson pointed to active sportswear and footwear producers — have learned to work together to dedicate the research and funds needed to get the product right.

“The bulk of the industry really doesn’t invest in itself in that way,” she said. “Honestly, we’re not going to get anywhere if it doesn’t invest in itself in that way. Maybe we have to lead again and we just have to get ourselves out of this valley. It is time for innovation again. Everything has been about making sure you have what everybody else has so you don’t get left out of the great idea.”

Still, no matter how dire the outlook, there are companies that shine. “The industry is competitive with a lot of the great industries out there,” said David Lamer, former Tommy Hilfiger executive, equity analyst and chief executive officer of DML Brand Advisors. “We have our answer to an Apple in our industry and that’s J. Crew and Coach. Not everybody is going to be relevant all the time.”