Last week, the Copenhagen International Fashion Fair (CIFF) — one of Europe’s longest-established tradeshows — welcomed more than 500 brands to its exhibition space in the Danish capital, connecting them to a global community of buyers. Spanning the 3-day event was a roster of panels, presentations and workshop sessions hosted by experts and designed to inform and empower brands with solutions-oriented insights.
In one such presentation, Technology and Innovation for A New Era in Wholesale, BoF’s Robin Mellery-Pratt and Alice Gividen explored the disruptive new technologies poised to provide the greatest opportunities for the global CIFF community as the industry experiences an inventory glut. Indeed, analytics firm Edited reported the return of deep discounting. Across men’s, women’s and children’s apparel in the UK, it found more than 71 percent of products were marked down as of July 17, compared to 22 percent last year and 47 percent in 2019.
Combined with the geopolitical context of a “polycrisis” — various systemic crises occurring simultaneously and interacting with one another — there is pressing need for the industry to innovate to combat these challenges, implementing strategies across new manufacturing models, Augmented Reality (AR) tools and Web3-based connectivity.
Building on the theme of innovation in the wholesale sector, the panel, Finding Wholesale Growth in an Uncertain Market, examined the new strategic approaches to wholesale already being employed by market leaders, with a focus on operational innovation, community-building, and radical shifts in how brands produce and send their clothes to stores.
BoF was joined by three talents exploring these spaces via their businesses. Ellen Dixdotter, CEO of contemporary womenswear brand By Malene Birger, who took on the role in the summer of 2020, at the height of the pandemic, and worked quickly to refine its wholesale network. She was joined by British design talent Bianca Saunders, founder and creative director of her eponymous luxury label. Having won the 32nd ANDAM Grand Prix Fashion Award in 2021, her global stockists include MatchesFashion, MachineA and Gr8, in Japan.
Finally, Gonçalo Cruz, co-founder and CEO of PlatformE, a made-to-order manufacturing platform completed the panel. Platform E’s services and technology insert digital fashion across the value chain, enabling fashion brands to create their items, sell them and only produce them after the point of purchase with constant and integrated access to their entire production chains.
Below, BoF shares the key takeaways.
Begin With Internal Collaboration
GC: “Fashion’s business model is fundamentally broken. In the US, more than 60 percent of products are marked down, and up to a third of them are marked down to a level where there’s actually no margin. One of the reasons for that is [that] big brands operate in silos. The number one goal of procurement and buying teams is to [minimise the] cost of production. To lower the average unit cost, suppliers will typically require [that] you [order] more [product]. [But by producing] more volume, you’re migrating the problem to your sales, merchandising and marketing [teams], saying, ‘It’s your challenge, you go and sell it.’
Fashion will have to adopt [to] not looking to lower the cost of production, but to optimise margins, meaning selling at a higher [or] full price. You [only] need to discount when you have excess inventory, so the ultimate goal is reaching the fine balance of what’s the right figure [of] finished product versus what I call ‘Demand Responsive Capacity’. If your products perform [well, and you have] a very close relationship with your suppliers, you can accelerate a just-in-time response. This is what we’re trying to do at PlatformE, receiving real-time market data.
ED: “When Covid hit the world [in 2020] and everything was disrupted, […] we didn’t start with a wholesale strategy but rather we started within ourselves. We narrowed down the collections by 50 percent, brought back production to Europe from Asia, and increased the prices quite radically to be able to offer quality [and] sustainable alternatives in terms of fabric with a focus on full price.
[Then, we had] to revisit who we are partnering with. We have a lot of wholesalers around the world, but we scaled that down as well to make sure they can bear and deliver our message so [to] make sure that the end consumer meets us in the same way all over the world. We want to have the same values as [our] wholesalers.”
BS: “My main focus is to make sure that the main brand product grows more than it being [a facilitator of] collaborations, that can sometimes dilute how I expand. There is a lot of pressure on younger brands to implement lessons from and learn the mistakes of the past — and fix broken elements of how the [brand-retailer relationship] works while maintaining traditional processes.
[My wholesale partners] respect that and it’s really worked for their models too. I do listen to them and ask [which are my best] sellers — that’s how I grow the collection every season.”
Implement a “Pull” Model, Where Actual Demand Dictates Product Development
BS: “During my first season, I had small orders, so I was making product myself and sending it out to retailers. As the brand has developed — I’m now on my ninth season and I’ve learnt that certain products don’t translate well from the runway to the store; sometimes, they’re not profitable or worth the work or my team’s time. Now, I’m hugely focused on making sure that each store has the right amount of product — and the right product for their customer. For example, if MatchesFashion wants a particularly intricate and [expensive] item, then that decision is based on customer need. The [retailer] will carry the customer to the product — it will reach the right person, and makes sure that the profit margin is actually at a good point to justify its [creation].
GC: We started working with luxury brands [across] LVMH and Kering, and even those brands [rarely] own 100 percent of their workshops or factories. They rely on different suppliers, [and] on multi-brand boutiques to sell their products. Gucci, for example, [sees] more than 50 percent of sales come from external domains, so they need to connect markets and factories in order to be informed by consumer demand.
At Platforme, we connect the points of sale — the website, the store, the multi-brands marketplace — [and] inform the factory in real-time, saying, “this week you sold 100 dresses, so you need to produce [more] because you’re selling out of those specific dresses.” We want to democratise access to this technology — it shouldn’t be exclusive to luxury.”
Adopt a Customer-Centric Brand Mindset
BS: My relationship with retailers as my brand [grows] is changing slightly because I’m considering and prioritising exactly the different types of men that want to wear my brand and the size range they need too. There are also women that want to wear the brand without me expanding into a traditional womenswear space. It’s about organically expanding those sections of the brand that has been my massive growth focus point and it’s really worked. We’ve expanded into women’s without diluting the menswear brand model. I’m giving customers the option to buy into it the brand format and fit, regardless of [gender] or preference. It’s giving way to a slow and steady growth pace.
ED: For us, it always starts with the universe and the way you’re building a brand beyond just creating new garments. I think that’s also what our founder, Malene, had in her vision when she founded the brand. I’m drawn and attracted to interiors and antiques and believe that our customers are also very inspired by getting more than just product.
In our own brand homes — we have curated perfumes, art, ceramics and jewellery to give customers a holistic brand view. The results we have seen and the feedback, it’s amazing. Our fanbase is united in this idea of the lifestyle that we are creating for them. It’s a power.”
Futureproof by Starting Somewhere, Anywhere
GC: “A made-to-order manufacturing model is not an “all or nothing” exercise. We can start with one product or segment — the easiest silhouette — and try it out. The first step is reducing product development lead time. Working on a raw material basis rather than finished goods, and reinventing your design strategy to adapt to what the supplier can offer you.
The second step is trusting your suppliers. Fashion is one of the industries [with] the lowest confidence in the supply chain. The third step is the connection of data and production. If you own your data and inform your suppliers in real-time — “this product is selling much better than the other one,” [you can use that insight] in-season. This is the ultimate goal.”
BS: “The more individualised you make your brand, the more you [maintain] what the customer means to you. I’ve known from the beginning that once you have your small audience, it’ll grow into a bigger audience if you just keep those people content and not try to step on anyone else’s toes. That’s how I’ve kept it growing. I constantly ask my sales [partner, Tomorrow Group] where stockists and retailers are positioning my brand. That’s really important because it guides what sort of customer I want to attract. My brand is growing mostly because of how I present it — via fashion shows, the models, the price point and the comfort of the clothes.”
ED: “To not be stuck with overstock and overproduction, you need to [create] something that doesn’t feel old 6 months later. It’s the way the garments look, the quality, and of course, that the fabrics are sustainable.
The other part is certification. Our wholesale partners are, thankfully, also putting a lot of demand on us to have the right certifications and deliver something customers can be sure is a sustainable alternative. It goes both ways, we need to have an offer that they can sell at a good price, and they need to be able, along with us, to demand certifications, [verify] where [a product] is produced, [be dedicated to] transparency — it’s really a collaboration.”
This is a sponsored feature paid for by CIFF as part of a BoF partnership.