New York Fashion Week has been “dying” for a while now. But the Fall/Winter 2020 shows taking place this week saw a number of designers quietly (and not so quietly) drop off the schedule less than a month out from their show dates. The head of the CFDA — one of fashion week’s governing bodies — isn’t even showing in New York.
The transformation of NYFW is a symptom of the industry’s struggle to shift its focus from pure B2B marketing to a blend of B2B and B2C.
The business model for “fashion designers” when wholesale was still growing at an even clip was:
- Win the approval of fashion industry gatekeepers (magazine editors) to
- Successfully market the brand to wholesalers (high end department stores) to
- Grow revenue and brand awareness via those wholesalers’ ability to capture passive mall traffic so that
- Eventually you can sell out via licensing and brand extensions (perfume, cosmetics, diffusion lines) and rake in the big bucks OR
- Turn your brand into a luxury status symbol, build out a small leather goods business and get acquired by LVMH or Kerring
In this model, the fashion show was a critical part of winning gatekeeper approval and attention from wholesale buyers. Your brand could not legitimately call itself part of the fashion industry without showing at New York Fashion Week. It was a trade marketing event — B2B.
This system imploded around the time of the “great recession” in 2008. The great recession killed IRL shopping as entertainment, which killed the passive traffic model that had sustained mall-based physical retail. That left many department stores locked into too many unprofitable leases, mostly unable to drive sustained growth in their main line/full price businesses.
Technology drove a further nail into the coffin. Mall operators focused on the value of their real estate, but technology folks (Google, Facebook) focused on securitizing human attention through network effects, dopamine triggers and advertising. The average American realized that it is cheaper and more cost-effective to numb yourself on your couch, scrolling through a phone, than it is to numb yourself by driving to a mall and thumbing through stacks of $39.95 chinos.
Lost In Transition
Many American fashion brands realize that developing a direct channel is critical to sustaining profitable growth. But these “direct” businesses are still managed and marketed through a frame of reference where a department store buyer is still the end customer.
If a brand that “grew up” in wholesale is attempting to go direct, but engaging in more than one or two of the following, that brand is still essentially speaking to wholesale buyers:
- The brand’s eCommerce “marketing calendar” is a list of product release dates and sale/promo launches.
- The homepage of the brand’s website is always used to promote new product launches, assuming any given visitor has a high level of familiarity with the brand.
- The brand’s largest digital marketing expense is bidding on its own branded terms on Google.
- When the brand talks about the market, or its target customers, it is speaking about second hand knowledge from wholesale buyers. The brand has never done a customer survey.
- When the brand talks about itself, it uses the same language that is used to pitch the brand to wholesale buyers: its positioning in relation to other brands, its price point, its product features.
- A runway show is the brand’s largest single annual marketing expense.
- The head of marketing, or highest-level marketing employee, has a background in traditional PR or wholesale marketing, and no experience in performance marketing.
- The head of eCommerce, or highest-level eCommerce employee, reports into the head of wholesale.
- The eCommerce buy is either (1) determined by wholesale orders or (2) is everything the brand put in their line that season. There is no study of the eCommerce customer’s specific preferences.
- eCommerce is used as a clearance channel.
The reason that the transition to DTC has been so painful for so many fashion brands is the same reason that we’re not all walking around with six-pack abs and perfect credit: the “how” may be clear, but in most cases we simply cannot help getting in our own way.
The founders of many of these brands absolutely love putting on runway shows. They see the show as the ideal way to represent the intention of their collection. Even if it is an expense that will never match the ROI of direct advertising, and even if it requires the brand to pad its margins to an insane degree to fund the expense.