It seems that the spark ignited by Kathleen’s post on ABC retailing (links at close) has created an interesting debate. In the comments, Allison Cummins responded:
Finally, I think Miracle’s point about the interests of DEs and reatailers diverging is potentially very generative and deserves a blog entry of its own.
And so here it is.
I’ve written on this blog before that retail is a cash flow game. In addition to being a retailer, I have friends who are retailers, and the over-generalized evolution of a retailer goes a little something like this:
A woman (let’s just keep it there because most independent boutiques are owned by women or have women as buyers) wants to open a retail business that specializes in a certain perspective or style. She usually carefully researches her opening brands and tries to have a really good mix of new and innovative style and gotta have it staples. Her inventory is fun, refreshing, it’s exactly the type of thing she felt that the local retail scene was missing.
Maybe a few months (if she’s smart) or a few years into the business, she starts to analyze her sales data because she has this markdown rack. And she’s seeing the same types of brands being marked down. So she figures out what sells and what isn’t selling and tries to get a handle on why. Was it fit? Style? Construction? Color? Price point? What was it?
She might even ask customers what they don’t like about an item and make notes. Too many similar issues with the same brand and that line becomes the one with the pants that are so long only tall women can wear them and most of my female customers are not 5 foot 10. Or it becomes that brand that has the price point that’s about $15 more than my customers are willing to pay and since I don’t want to cut my profit margin, I will replace it with a brand with a more competitive price point. And so on. Because at the end of the day, retail is all about moving merchandise.
So that retailer may even drop some innovative, but poor selling, brands in favor of an item of the moment. After all, bills have to get paid and idealism is not tangible currency.
One thing DEs don’t like to admit is that most products are not unique. I’m not trying to be insulting, but there is more merchandise being offered than a retailer can ever hope to buy. For every innovative thing that you sell, there are 2, 3 or more DEs offering suitable replacements . All the top apparel industry trade shows routinely fill their booth space and turn away applicants. It really doesn’t matter if your fabric is woven from the same gold thread that Rumplestilskin spins, there is probably somebody else, somewhere, doing it too. And the line that sells in the store, it is the one that gets the dollars.
What makes DEs successful is a strategic understanding of sales and consumer marketing because not only do you need to market to the retailer, you need to market to the consumer as well. Big retailers are known for demanding that you either pony up the money for them to do the marketing and advertising, or keep up a certain amount of press or else they drop your line. Now the DE can say that it isn’t fair, but what are you going to do? There’s always something else the retailer can buy.
What I admire about celebrity and media based product promotion was that it was one of those rare opportunities that allowed the small independent brand to level the playing field and get on par with the big boys. So now an unknown could get the same product placement as Nike but without the fees, the budget, but rather by working strategically and building connections. This is how you, as the independent DE, can get placement just like the big companies.
Now we can argue that it’s a retailers job to sell, and to some extent it is, but most retailers, whether small or large, do not have the resources and staff to individually pitch each line, and most consumers do not like to be bothered by sales clerks when they’re shopping. When it comes down to it, they will pick the “boring” (in your words, not theirs, and not the consumer’s) brand that sells over the interesting brand that doesn’t.
No longer are creativity and good fashion design skills sufficient for a designer to make it. Fashion is a business and it’s being dominated by those with the marketing and sales strategy to move merchandise. Now you have a plethora of hot brands being started, grown and run by people with product development, marketing, sales, public relations, stylist and strategic business development backgrounds. Because the truth is good design is only worth something when the cash register is ringing.