FASHION Flashcards
what is fashion
- everywhere, creativity, trend
- non-verbal communication: system of meanings and form of speech
- creating the dream factor: MESPC
- continuous succession of stylistic changes: planned obsolesce (artificial shortening of products lifecycle, create design meant to phase out)
- made of different acotrs
- made of many different business models
trends lifecycle
- introduction: fashion innovators (main purchasers of design at starting stage), KOLs (strong social status, opinions)
- Peak: masses (mainstream), late adopters (few seasons later)
- Decline: laggards, price sensitive, value for money
high and low fashion content
low (carryovers)
trends come from
socio-cultural trends, design creativity, media and arts, textile, tech innovation
trickle down theory
existence of a social hierarchy in which people seek to identify themselves with the affluent ones and those at the top of the social pyramid. Fashion assumes a function of social ostentation and is considered a vehicle of upward mobility for those who seek to imitate the styles of the richest, seeking to reinforce their status of opulence and wealth.
trickle up
creatives from all over the world get inspired by the “street”.The fashion trends start among the younger or lower income groups and became the source of inspiration for stylists and designers.
trickle accords
fashion moves horizontally between groups belonging to similar social levels.
* First, thanks to social media and influencers, one group member affects the others and a trend becomes a “must-have”. Then, everybody from every social class is experiencing the same fashion trends.
* It allows those from different walks of life and different backgrounds to have a trendy piece of clothing, that is being sold by various different designers at various different prices.
brand segmentation
aims at defining the segment in which the firms compete.
it forces companies to identify their own competitive positioning within the market.
steps of segmentation
- Define the business (facts & figures)
- Select key variables that will be used to group brands into different clusters (price range, style,
clients, end uses,…) - Position all competitors according to these variables
- Identify clusters of firms with similar positioning (more than 3, but no more than 8-10 per cluster) and give to each cluster a name related to the way they compete
- Identify the Key Success Factors - KSFs for each cluster (product, channel, media)
- Drive conclusions on the industry attractiveness
fashion pyramid
- haute couture: historical and long lasting French and Italian “couturiers”. KSF: superior quality, craftsmanship, and uniqueness. It focuses on focuses on creating one-of-a-kind, bespoke pieces.Few customers, few products but very important in order to build the brand image. Thanks to haute couture, companies really sell the dream, the magic.
- ready-to-wear: collections ready to be purchased and worn by customers. KSF: strong brand image associated with the designer
- Diffusion: more accessible lines of the “ready to wear” segment as well as the most premium industrial brands (ex: Max Mara). KSF: style and quality at a price. high volumes, wholesalers
- Bridge: premium industrial brands (ex: Tommy Hilfiger, Guess) and products are updated, trendy. fantasy names, mix of wholesale and retail, production outsourced
- mass market: mass retailers that offer a wide range of products at affordable prices such as Zara and H&M. KSF: efficiency, glamorous communication, entertaining shopping experience, somehow to combining the affordable price with the fashion content. usually very homogenous, now started segmenting (diff brands, customers, occasions of uses, prices)
9 components of business model
- Offering: value propositions
- Customer: customer segments, channels, customer relationships
- Finance: revenue streams, cost structure
- Infrastructure: Key resources, key activities, key partners
business models components (4 graph)
- Value proposition
The offer to the market: products, services, experiences (What)
-Clients’ segment
Targeted by the value proposition (Who) - Distribution channels
To reach the clients and offer them the value
proposition - Value chain organization Degree of vertical integration (How)
business model 1: luxury brands
- Value proposition
Timelessness, quality excellence uniqueness, exclusivity, craftsmanship (watches, jewels, leather goods, silk accessories ) - Value chain organization
Vertically integrated, up and down stream
Luxury Brands - Clients’ segment
Few, privileged, wealthy customers focused on supreme quality and timeless style - Distribution channels
DOS – exclusive distribution
Product is the king! Brands are based on iconic contents, legacy and heritage, are more conservative and less dependent on fashionability.
business model 2: fashion designers
- Value proposition
High fashion content products, anticipating and creating new trends (clothing) - Value chain organization
Usually, vertically integrated up stream - Clients’ segment
Selected target, focused on glamour, style and quality - Distribution channels
DOS, Department stores, Multibrand stores
Creative vision comes first!
* Key role of the designer: assuring brand positioning consistency new collection creation, communication, store layout. Fashion designers are the brand soul and identity.
* Governance:
– Vertically integrated, family businesses (i.e., Dolce&Gabbana)
– Designers that rely on licensing (i.e., Dsquared2)
– Designers acquired by a private equity (i.e., Valentino)
types of business models in fashion
luxury brands, fashion designers, premium brands, fashion retailers
business model 3: premium brands
- Value proposition
Value of brand (clothing and accessories) - Value chain organization
Insourcing / Outsourcing of production - Clients’ segment
Price/quality - Distribution channels
Brand stores, Department stores, Multibrand stores
Marketing is one of the main value drivers, but the industrial know-how is also fundamental.
* Time to market is crucial.
* Mix flexibility is mandatory.
* Right combination between a product that is trendy, updated, but not extreme in terms of fashionability, and a price that grants the customer a right value for money.
* Importance of creating an emotional storytelling: a strong and unique concept to engage the customer.
business model 4: fashion retailers
- Value proposition
Fashionability at convenient price - Value chain organization
Network based SC or vertical integrated SC
Fashion retailers - Clients’ segment
Price sensitive - Distribution channels
Occupying high-traffic locations and investing in huge retail space as a sign of visibility - Retailers commercialize products received directly from manufacturers or from wholesalers, selling them directly to consumers.
- Fashionable merchandise is sold in large and welcoming stores at a very convenient
price. - Fast Fashion Retailers updating collections throughout the year (new products being brought on the racks weekly rather than by season), and are able to react to new trends in fashion.
- Speed and quick response to guarantee a weekly delivery of new fashionable products.
critical success factors for luxury products:
- Superior quality
- Craftsmanship
- Timeless and recognizable style and design
- Creation of a lifestyle
- Exclusivity: customisation (unique product or assembly of modular components): engineer to order, make to order, assembly to order, make to stock
- Uniqueness
- Association with a country of origin
luxury pyramid
- ABSOLUTE LUXURY:
most exclusive form of luxury where customers enter waiting lists to buy unique handcrafted items made of precious material.
Customers are selected by the brand. KSF:
strong brand heritage and products’ uniqueness. - LIFESTYLE LUXURY:
made of “logo brands” (i.e. Louis Vuitton), offering quality and stylish products.
Brands are selective in terms of target, media and location.
The key success factors are a strong brand reputation and brand recognizability thanks to strong symbols. - ATTAINABLE LUXURY: Goods are produced in mass quantities.
Are more accessible in terms of price, location and media (i.e. Michael Kors, Max Mara, Furla, Coach, …)
The key success factors are fair quality/price and a nice shopping experience.
-MASSTIGE: “mass” in terms of distribution (widely available) and in terms of pricing (reasonable premium price compared to non-luxury brands), “prestige” in terms of communication as they use most of the codes of the luxury brands such as limited editions and celebrity endorsement
* Masstige products can be the result of line or brand extensions from luxury brands that want to appeal to the masses while still being affordable in order to be highly profitable: Organising fashion shows, choosing top models and VIP, collaborating with designers and celebrities, creating limited editions
what is a brand
SUMMARY OF PRODUCT ATTRIBUTED AND VALUES (TANGIBLE AND INTANGIBLE ATTRIBUTES, PRODUCT AND BRAND STORY AND VALUES) name, term, sign or symbol or a combination of all these things, intended to IDENTIFY the goods/services of one seller and to DIFFERENTIATE them from those of competitors.
BRAND EQUITY
customer at the center, →On keeping the promises made to the consumer (→experience with products and brands)
→On the benefits that the brand creates and increases if linked to emotions and social contest
→
→On the relevance that the brand has for one or more individuals
→
→On symbolic value that the brand could create thanks to the storytelling or to the support of a testimonial / leader
MAKE TO ORDER (luxury and fashion designers)
- Material purchasing starts during the samples creation and goes on during the selling campaign. The early purchases are based on forecasts and on finished garments’ sales
- Production begins as soon as sufficient quantity of raw materials is available, when the selling campaign just started.
- Deliveries also start as soon as finished garments are available for shipments.
projections.
LONG LEAD TIME
Producing after acquiring orders from the market (distributors, wholesalers, retailers) allows to:
– minimize unsold stocks
– avoid heavy losses
– reduce capital immobilized in inventory
– get predictable cash flow
Far from the market, impossibility to fine-tune the merchandise on offer (pre-collections,
“flashes” and “capsules”).
two factors that strongly impact the collection complexity:
– The wideness, represented by the number of SKUs included in the collection.
– The variety, depends on the number of product categories in the collection (clothing, accessories, shoes).
pattern group
Pattern Mission: to cover the entire business line (Research and Development, Engineering and Prototyping, Production) of almost all fashion/luxury product categories, for many brands.
The main product categories provided by Pattern Group are:
* Men’s and women’s clothing
* Luxury knitwear
* Leather goods
The Group is made by a network of companies and factories, located in 7 regions throughout Italy, each of one leader in the prototyping and production of different categories of luxury
fashion.
MAKE TO STOCK
Less product development complexity: usually reproduction of the styles which are successfully selling (followers).
Fast fashion is linked to
seasonal and trendy items (closer to the market).
Short purchasing LT: the materials are standard lead times.
Short production LT: processes are simple and essential.
To guarantee speed, the suppliers’ network must be very well structured and dependable.
Quality is not a substantial requirement, customers seek the stylistic content of the moment and not an everlasting quality.
Selling to customers
The company is exposed to a risk of unsold products (overstock) in case they do not properly interpret market trends.
Less predictable cash flow
Make to order Vs. Make to stock
- High-end fashion companies
– Make to order production approach: production is after/during the selling
campaign and is based on sales orders, so it is a pull production strategy;
– Product-centric companies and, from a commercial point of view, adopt a
push strategy - they push the product on the market. - Fast fashion companies:
– make to stock production approach: production is based on forecast, so it is a push production strategy;
– are so-called customer-centric and, from a commercial point of view, adopt a pull strategy - market trends pull product development.
FAST FASHION: PRODUCTONS MODELS
network based and vertical integrated
NETWORK BASED
outsources everything, many suppliers. Basic net: develop the value of its brands and distribute its products worldwide through a global network of licensed companies, connected with the head company and to each other by Internet. production licensees => sourcing centres => BASICNET => commercial Liceenses (or BasicItalia: mono brand stores, brand outlets, factory outlets) FIRST VIRTUAL MARKETPLACE (all steps in the supply chain take place on the platforms)
advantages of network based production model
ITsystemallowsto:
better coordinate the supply chain processes, centralize data across multiple offices
interact with customers (commercial licensees)
interact with its suppliers (production licensees)
track orders and make last-minute changes in response to the change of the markets (high flexibility), minimizing the risk of obsolescence of their product offerings.
* Speed
* Efficiency (Costs)
* Flexibility
* Coordination and communication (IT)
VERTICAL INTEGRATED PRODUCTION MODEL
outsources very few activities, few suppliers zara: design, sourcing and manufacturing, distribution, retail
DISTRIBUTION STRATEGY: DIRECT AND INDIRECT
indirect:
- wholesale channel (corner, wall unit, open sale)
- online
Advantages of the direct channel compared to indirect channel
- To build the brand image
- To create a 360°shopping experience
- To have complete control on assortment/pricing/deliveriesàcontrol on positioning
- To know directly the consumers (CRM)
- To chose the location
- To get higher margins
OFFLINE RETAIL FORMATS
- flagship store: central locations, DOS, all product categories
- self-standing:
- shop in shop: stores within an external commercial structure (mall). 3-4 walls + floor, entrance through a door (separate area), specialised sales associate
- corner: External commercial setting (typically a department store). NOT A SEPARATE AREA, 2-3 walls + floor, Specialized or non specialized sales associates
- wall unit:
- Personalized retail outlets within an external commercial setting (typically a department store)
- NOT A SEPARATE AREA
- 1-2 walls
- Personnel may be specialized
online retail formats
- direct: VIRTUAL FLAGSHIP STORES
- indirect: E-TAILER MULTIBRAND – FULL-PRICE (specialized vs non specialized)
Specialized: ASOS, Net a Porter…
Non specialized: Amazon, Tmall (Alibaba)…
E-TAILER MULTIBRAND – DISCOUNTED PRICE
Yoox.com…
ONLINE CLUBS (PRIVATE SALES)
Vepee, Privalia, BuyVip, Saldiprivati…
CITY DEALS
show rooming and web rooming
The physical point of sale shall not disappear!
It should transform taking into consideration the features for which it is still preferred to the online channel, including the features loved by consumer buying online
- showrooming (research in store purchase online) - webrooming (ROPO, research online purchase in store)
OMNICHANNEL DISTRIBUTION
- Omnichannel distribution is a multichannel approach taken by companies to give customers a way to purchase and receive orders from several sales channels with a seamless integration.
The major difference between omnichannel and multichannel distribution is the level of integration.
- Multichannel: non-integrated way to approach customers
- Omnichannel requires coherent and absolute integration.
The boundaries between channels tend to vanish in an omnichannel environment, giving the customer a consistent brand experience.
fUTURE OF SHOPPING BASED ON
mobile, online-offline integration, retailtainment, artificial intelligence and machine learning.
brand identity components
heritage, stylistic identity, retail identity, communication identity
heritage
place, people, product, brand legend
stylistic identity
permanent stylistic codes, gives the direction to the Brand’s style evolution
and innovation
All the products need to respect and be coherent with stylist identity
Logo, mix of details, special pattern, craftmanship
Iconic product
retail identity
visual, space planning, store design, merchandising
communication
Company’s image
Communication needs to be coherent with the Brand’s world of reference
Brand DNA, values, culture have to be consistent in every single element
Brand should become an object of desire
line / brand
HAUTE COUTURE
Armani Privè
1° LINE
Armani Collezioni
2° LINE
Emporio Armani
LICENSES
Armani Eyewear
collection
FALL WINTER
SPRING SUMMER
CAPSULE
LIMITED
Line => model => SKU
line /family
Group consisting of different products, also of different categories (bags, belts, shoes, etc.) that are characterized by same features,
details, accessories.
model
Classification of products based on their shape/function: Flap, Hobo, Shopping, Duffle, Clutch, etc…
SKU
Variants (material/color) available for each model
function
Classification of models according to their purpose/use: by hand, shoulder, cross-body, w/shoulder strap, etc…
occasion of use
Classification of models according to the opportunity of use: office, weekend, evening, etc…
seasonality
Classification of the models according to the period of stay in the collection: - Seasonal: one season
- Carry Over: more seasons - Permament: always
To properly develop a collection, three fundamental elements need to be defined and fixed:
- Stylistic identity (trends, carry over)
- Positioning and target: customers, competitors
- Collection structure: variety, width and depth
Define the Stylistic Identity means decide how to structure the offer also in terms of
- IMAGE: Most fashionable products, top price, adv and PR
5-10% sku - CORE: Complete range to cover different needs of end users and trade, core price: balance price/volume
60-85% sku - BASIC: Best sellers; carry over; entry price; high volume strategy, high profitability for trade/retail
10-30% sku
To make a collection successful, there are three key factors that need to be carefully analyzed and defined:
- Innovation
- Structure
- Size
steps of collection lifecycle done by merchandising dept
- Collection preparation
- Collection Plan
- Collection development
- Sales campaign
- Sales period preparation
- Sales period
Collection prep to plan
- collect all info and analyse it
- analysis of competitors and market needs, trends and sales analysis of previous collections to prepare the collection plan
Collection plan
Once all the analysis are ready, the Merchandising Dept. can prepare the Collection Plan that is a fundamental document that indicates:
- Collection budget objectives;
- Past collection performances analysis;
- Competition analysis;
- Collection structure: - Nr. Of lines / Models / Sku
- Carry Over vs Newness
- Assortment structure:
- by Functionality (shoulder, handle bag,…) - by Typology / Occasion (day, evening, …) - by Seasonality (seasonal, carry over)
- by Price Range (low, medium, high)
After collection plan done => collection development
Designer & Product Office start to create and develop the new collection
→the Merchandiser constantly works with Design team in order to maximize the collection structure and arrive to the Collection Presentation day with an attractive and salable collection
collection development to sales campaign
Sales Campaign organized to present the new collection to internal buyers and clients and to collect all the orders;
→For the last part of the collection, the Brands normally schedule also a Fashion Show to officially present the
collection.
COLLECTION PRESENTATION, COLLECTION GUIDELINES, ORDERS
COLLECTION PRESENTATION
The Merchandiser is responsible for the Collection Presentation to other departments
✓Is a meeting with other Departments involved in product lifecycle;
✓Can be done with an internal defilé with models;
✓Can be completed with a document that contains all the collection details;
✓During the presentation, Merchandisers explain the new collection in terms of: inspiration, strategy, structure, etc…
collection / buying guidelines
Merchandiser needs to share product information and strategy to other departments => prepare the Buying Guidelines before the collection presentation.
✓Document with guidelines on product assortments to support Retail Buyers in their selection;
✓Needed to have coherence between Merchandising / Product strategy and Retail strategy in order to represent the correct image and assortment in Retail stores and between different Areas;
✓Needed to help the Production in materials purchases and production plan;
✓Based on collection structure and strategy, on sales analysis by Areas, on Order
Budgets and on Pre-Orders.
from sales campaign to sales period preparation
- industrialisation: prepare all the technical specifications of the products, do the different tests necessary to guarantee durability and quality, maximize the production processes, prepare any molds to make the accessories, etc….
- product launch: based on delivery plan
sales period preparation
- delivery plan: ✓ Based on materials deliveries, pre-orders, product production timetable, orders;
✓ Done to schedule the different lines / group deliveries in order to plan stores activities and support sales thanks product rotation;
✓ A key document and must be respected to support sales and make a collection successful. - windows and display plan: ✓ Visual Merchandising strategy ✓ Designers’ inputs
✓ Product strategy
✓ Buyers’ requests
✓ Retail’s needs - communication plan: defines target audiences, key messages, media planning, budget, calendar and responsibility in accordance with the Corporate strategy, the messages and products (Focus) that Brand wants to push each season.
✓ Designers’ inputs
✓ Product strategy
✓ Communication strategy
✓ Retail and Wholesale orders and feedbacks
COLLECTION TRAINING/ BOOK: Collection Training is normally prepared by Merchandisers that collect all information concerning collection and products into a Collection Book that explains all the required details. The Collection Book should explain:
- INSPIRATION & THEMES
- PRODUCT DETAILS
- MATERIALS
- EXPLANATION
- COLLECTION OFFER
- MAKING of PROCESS
sales period
- Sales analysis: monitor and analyze products performances to understand strengths and weakness of collection and avoid to make mistakes and repeat worst sellers in the next collections;
→The Sales Analysis are basically hold by Merchandisers and Buyers;
→Thanks to a good analysis activity, Merchandisers and Buyers can better interpret customers’ and market needs increasing their satisfaction level and, consequently, the sales results.
There are many different types of analysis that can be done during the season:
❑ Sales by Area / Country / Stores;
❑ Sales by Product Typology / Seasonality / Functionality;
❑ Sales by Price Range;
❑ Full Price vs. Markdown Sales;
❑ Sales Performances Year to Date / Season to Date / Month to Date;
❑ Best and Worst seller product / models / materials / colors;
❑ Stock level.
Thanks to all these analysis, the Merchandiser can take action to:
✓ Support and improve Sales Results (Product Management)
✓ Improve collection considering all the analysis outputs during the collection plan preparation.
Thanks to all the different analysis, several actions can be taken to improve seasonal results during the sales period:
- Product management
- Visual merchandising
- Communication
owned media
- cost efficiency, high control, low credibility
- blog, branded channel on YouTube, branded event
- objective: image and brand awareness
paid media
- economies of scale, high control, low credibility
- SEM, ads on Facebooks, involvements of influential bloggers (sponsored posts)
- objectives: bring traffic to owned media
earned media
- no development costs, no control, maximum credibility, can be negative
- Digital PR, buzz marketing, WOM, viral
- objective: get strategic insights for owned media
Social media strategies in fashion: key points
1) Build up a social media plan: define objectives, allocate resources, measure the return, correct action
2) Involve the audience in the implementation
3) Produce content that involves the fan/follower
4) Use the right “web oriented” language and “tone of Voice”
5) Engage through technology
6) Involve the bloggers
7) Create Online Shopping Experience
8) Grant Online and Offline integration
9) Monitoring
the future of social media
1) Social media integration
2) Employment of online and offline WOM
3) Content marketing
4) Artificial Intelligence
5) Transmedia storytelling
6) Online-offline integration
7) Geolocalization services
media and sustainability in fashion
Objectives of the new contents:
1.Sensitizing & educating the consumers
2. Changing attitudes
3. Changing behavior
New media allow to:
- Make available a large number of
information about products and brands
- Describe the value chain in a transparent manner
Why is it important to communicate sustainability?
- Enhances the behaviors and maximize the benefits deriving from the adoption of socially responsible strategies and actions to establish lasting relationships with the relevant stakeholders;
- Creates reputation;
- Has a positive influence (role model) on the other
enterprises and consumers (behavioral campaigns).
The principles of sustainable communication
- USE POSITIVE MESSAGES
- WALK THE TALK
- TRANSPARENCY AND AUTHENTICITY
- ACCESSIBILITY AND INTERACTIVITY OF INFORMATION
- CREDIBILITY
- RELEVANCE
- NARRATION
- INNOVATION
- SIMPLICITY
- EMOTION
How can we analyze consumer behavior in fashion?
- Demographics
- Gender
- Age range * Generation
- Psychographics
- Lifestyle segmentation AIO= Attributes, Interests, Opinions
LOHAS
LOHAS means Lifestyle of Health and Sustainability consumers, a consumer type but also a market of goods and services that puts at the center the health, the environment and sustainability
The LOHAS lifestyle can be called “hybrid.” Being LOHAS means supporting the technological evolution enjoying nature, living a life centered on their individuality, however, thinking of sharing with each other. The LOHAS are realistic but open to spiritual
ideals.
Sustainability and CSR
Triple bottom line approach
Business performance should be monitored according to three perspectives, namely economic, environmental, and social
Sustainable fashion=
- ECO FASHION: - Reducing, reusing and recycling of resources (water, energy, raw materials) along the pipeline;
- Use of organic and natural fibres;
- Use of vegetable dyeing;
- Vintage practices and second hand;
- Green certifications.
- ETHICAL FASHION:
- Compliance with the agreements of the ILO;
- Social work with ethnic minorities from disadvantaged
or underdeveloped areas; - Traditional methods of production of particular areas or countries;
- Compliance with the Fair Trade criteria: creating opportunities for economically disadvantaged producers, transparency and accountability, capacity building, promoting Fair Trade, payment of a fair price, gender equity, working conditions, child labor, the environment, trade relations.
Art, Culture and Territory
The link between Fashion and the Arts has been very strong since the start.
Many companies are “giving back” to the Arts through their Foundations or
through sponsorships.
Tod’s decided to launch several projects (kindergarden in the Marche HQ, elementary school close to the Marche HQ, restructuring of the Colosseum…) to “give back” to the territory & the arts.
The Italian casualwear luxury brand well known for its high quality cachemire is
the best practice for the coherent strategy of giving back to the “territory” what
the company had taken from it in terms of creative inspiration.
* Representing a best practice of
“Humanist enterprise”, “Ethic capitalism”, “kalòs kai agathòs” (Plato principle of possession of the beauty and the good), “Beneficent feudalism”
* Multi-stakeholders approach: humanistic firm which re-invests on the community (restructuring of Solomeo, theatre…etc…), being inspired by art and literature
Code of Ethics: General principles
* Legality
* Confidentiality
* Transparency
* Fair competition
* Personal dignity
* Integrity and propriety
* Quality
* Environmental protection
* Responsibility to society
IOU PROJECT
- Use of sustainable raw
materials - Authentic Madras made in India
- 100% online distribution
- Track&trace on each item (ID code)
- New supply chain: “prosperity chain”
- Consumers can complete the story by posting pictures and becoming “trunk show hosts”)
The IOU Project produces unique, handmade apparel based on fabrics handwoven in India. Because each textile is unique, they provide end buyers with the ability to trace the production process from finished goods right back to the weaver that hand-wove the fabric. The traceability is made of the stories of how that item was created, of the people involved, of the customers who purchased them.
RESPONSIBLE FASHION COMPANY CONCLUSIONS
In order to see concrete results (value creation) it is necessary for the companies to
go from few random launches of individual products/collections to ongoing actions
involving the entire value chain and all the stakeholders: environment, society, art,culture and territory, media, institutions.
YOOK NET A PORTER
- ONLINE FLAGSHIP STORES
- LUXURY MARKET IN 2030: online was the fastest growing sales channel in the Personal Luxury Goods Market.
E-commerce is set to become the leading channel for luxury purchases by 2030, fueling the omnichannel transformation.
TYPES OF BUSINESS MODELS IN THE ONLINE INDUSTRY
- WHOLESALE:
brand sets the wholesale price and sells to a retailer; retailer sets the retail price (final price) and deals with final consumers. The stock is owned by the retailer, which physically has the stock in its warehouse/store. - CONCESSION / CONSIGNMENT:
merchandise is consigned by the brand to the retailer. The ownership of these goods remains with the seller even though they are physically in the retailer warehouse/store. The retailer sells the goods on behalf of the seller according to instructions (fix margin). - DROPSHIP: items are shown and purchased on the retailer platform, but they are sent to the final customer by the brand (owner of the stock). The retail gains a fix commission on item’s sale. The price is set by the brand
- MARKETPLACE:
digital platform in which third parties/ brands can sell their goods. Brands pay the retailer (marketplace) a fix commission to sell on its platform; the final price is set by the third party. Marketplaces in general works on a dropship model (e.g. Farfetch) or on a mix model (e.g. Zalando).
EVOLUTION OF FASHION
DIGITAL INNOVATIONS
NEW TECHNOLOGIES => SCENARIO
- CHANGING OF CUSTOMERS NEEDS
- ERA of CUSTOMER ENGAGEMENT
- From PRODUCT to CUSTOMER CENTRICITY
CHANGING OF CUSTOMERS NEEDS
- growing instability and volatility of the market demand
- growing demand for immediacy and convenience
- from product to experience
- focus on sustainability
ERA OF CUSTOMER ENGAGEMENT
Nowadays, the growth is not likely to be connected only to
any horizontal expansion or external growth based on mergers and acquisitions
If fashion and luxury brands want to grow their business operations in the actual marketplace, they have to steal market shares from their competitors attracting customers with more appealing offers.
QUALITATIVE PRODUCTS +
PERSONALIZED & EXCLUSIVE EXPERIENCE +
FOCUS ON SUSTAINABILITY
From PRODUCT to CUSTOMER CENTRICITY
- PRODUCT CENTRICITY: focus on top-quality products (creative dept, manufacturing functions)
- customer centricity: focus on personalised customer experience (customer service, retail, marketing and communication)
SUSTAINABILITY DIGITAL PASSPORT
Technology that allows customers to scan a code
Information about production and making off processes
Information about materials
Certificate of authenticity
Track of product history
Transparency of product lifecycle and
environmental impact
Prove of authenticity
Protect against counterfeits
Constant access to the information over the
life of a product
Support of circularity initiatives: es. Resale
Improve Brand engagement and loyalty
Support CRM activities and customers’
8
tracking
AI in fashion
AI = augmentation and acceleration
* Giving fashion professionals and creatives the technological tools to do certain tasks dramatically faster;
* Freeing fashion professionals up to spend more of their time doing things that only humans can do;
* Creating systems to understand and serve customers better;
* Reduce activities lead-time and costs;
* Increase knowledge and competences.
AI SECTORS
- PRODUCT DESIGN
- VISUAL CONTENT
- COPY WRITING
- SHOPPING & CUSTOMER SERVICE
AI PRODUCT DESIGN
Support and maximize collection development process: * Sketches
* Variant simulations
* Time & Costs
* Pricing
* Customization
AI VISUAL CONTENT
Enhance and support: * Creativity
Personalize content and Services * Reduce complexity
* Shorten Production timelines * Reduce costs
* Sustainability benefits
AI COPYWRITING
*
Maximise and support activities: Optimize process: edit vs writing
*
*
Focus on storytelling Automate manual tasks
* Shorten timelines * Personalisation
AI SHOPPING AND CUSTOMER SERVICE
Maximise and enhance:
* Personalization of customer-facing contents * Customer services
* Interactive experience with customers
* Provide more tailored suggestions
EVOLUTIONOF FASHION LAST SECTORS
- MERCHANDISING
- MARKETING
- E-COMMERCE AND RETAIL
- HR AND TRAINING
- SUPPLY CHAIN AND LOGISTICS
belt bag
Belt Bag is the brand of the Occhio del Riciclone social cooperative estabilished in Rome in 2006 with a mission to promote the practice of reuse.
The cooperative received public funding for its project. In 2017, it relocated to Milan, and became part of Humana People To People Italia, and actively supporting social and environmental initiatives.Occhio del Riciclone is a non-profit organization that advocates for a circular economy model, with an emphasis on empowering both individuals and resources.
The cooperative works towards the integration of individuals from
disadvantaged background through targeted training programs that aim to highlight each person’s unique skills and abilities.
CUSTOMER TARGET
Ø Companies and individuals.
Ø Customers highly conscious of the circular economy and lead healthy life, looking for unique objects with a story to tell.
Ø Approximately 20-23% male and 77-80% female customers
CO-CREATION METHOD
The PhD Beatrice Re, Economics researcher at the Pavia University, led a co-creation study on Belt Bag by making testing Belt Bag product to 7 persons and revealing the following data:
Ø Quality and convenience are perceived as key attributes
Ø Sustainability as an additional factor
Ø The focus group participants perceive the bags as
high-quality products and as comfortable items.
Ø The social aspects of the project are not immediately perceived
