Random fashion thoughts - Part II (A New Hope)



gdl203 said:

Good old catch 22. The more you (and others) do that, the more the whole supply chain will need to increase regular retail to account for the fact that more merchandise now sells at markdowns. And the more they'll do that, the more you'll be inclined to wait for markdowns.

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What do you think it would to take to change that culture? I do feel like market is changing a little bit with companies like Everlane coming into play who are more upfront about value proposition (as in the whole we cut out the middleman so our retail is fairly cheap therefore no sales)

bry2000 said:

You raise interesting points here. I also try to keep my return rate very low. I prefer to shop in person and spend time trying things on and making deliberate choices, thereby minimizing my need to return.

I just wonder how it works for the purely on-line retailers, which offer free shipping and free returns. How do they feel about customers that order two sizes of one item, knowing that they will eat free shipping both ways. How do they view customers that are willing to order ten things, yet return nine or all of them because of sizing issues or they just did not like them. The customer is at no risk, but the retailer bears the transaction costs. Are the customers stigmatized even though they are encouraged by the retailer to order risk-free?

I would be interested in hearing the perspectives of anyone who is an on-line retailer.

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I have worked with over 100 retailers in the past decade or so, and I will tell you that the answer is an unequivocal "yes", no matter what. It's like someone saying "Make youself at home". There are still limits to civility. If you use the restroom or get a drink from the fridge, sure, that's cool. If you install yourself in my bedroom, yeah, I'd be a little pissed, even if I did tell you to "make yourself at home.

If you get the 10th email from the same customer who has bought... nothing, or if a guy who has a return rate of 90%, yes, you are going to feel differently from the 3rd email from the customer who always buys, and is just asking for something to be added to their order, or a big order from a guy who has a non-existent return rate.

indesertum said:

What do you think it would to take to change that culture? I do feel like market is changing a little bit with companies like Everlane coming into play who are more upfront about value proposition (as in the whole we cut out the middleman so our retail is fairly cheap therefore no sales)

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The no middle man thing is a pretty common value proposition. The "and that is why we have no sales" is just marketing.

I actually get the impression that people are raising prices because that's what the market bears, not because people are shopping on sale more. The sale market is so bad nowadays -- lots of things don't make it to sale season, at least not in the numbers they used to. Six or seven years ago, there was almost no incentive to buy at full retail because you could get almost anything you wanted during markdowns (size, style, model, whatever). There was a ton of good stuff at flash sites and outlets too.

A lot of that seems to have dried up now. I buy most of my stuff at full retail cause I don't want to risk losing out on it during sale season.

Obviously, if you're comparing prices to 15 years ago or whatever, then yea -- probably a lot of the markups have to do with increased sale culture. But there's been rapid inflation in the last five years, and I think that's actually better accounted for by the growing luxury market. People are earning more nowadays, and $1,000+ jackets are just less shocking to the everyday fashion consumer than they once were, which makes them easier to sell.

I buy the odd thing full retail - with EG for example, you know that some pieces are almost certain to sell out in my size before the sales, whilst others are going to end up discounted. If I'm pretty sure that I'll be able to pick something up at half retail by waiting two months I'm not going to waste cash buying it early.

I'm struggling to understand the huge mark-ups UK ans US stores are charging on some Japanese goods. I was looking at a Kapital shirt that's been a season staple for several years and I can buy it on Kapital's web site for the equivalent of $145 USD or buy it from Unionmade at $270. Now I'd expect Unionmade to be a bit dearer but pretty much twice the price?

@brad-t can explain it better but as i recall it's something along the lines of japanese goods being exported at japanese retail price



LA Guy said:

If you get the 10th email from the same customer who has bought... nothing

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Didn't know we were talking about the B&S forums here.



dieworkwear said:

I actually get the impression that people are raising prices because that's what the market bears, not because people are shopping on sale more. The sale market is so bad nowadays -- lots of things don't make it to sale season, at least not in the numbers they used to. Six or seven years ago, there was almost no incentive to buy at full retail because you could get almost anything you wanted during markdowns (size, style, model, whatever). There was a ton of good stuff at flash sites and outlets too.

A lot of that seems to have dried up now. I buy most of my stuff at full retail cause I don't want to risk losing out on it during sale season.

Obviously, if you're comparing prices to 15 years ago or whatever, then yea -- probably a lot of the markups have to do with increased sale culture. But there's been rapid inflation in the last five years, and I think that's actually better accounted for by the growing luxury market. People are earning more nowadays, and $1,000+ jackets are just less shocking to the everyday fashion consumer than they once were, which makes them easier to sell.

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I don't know man, nothing else in the luxury sector has doubled or tripled in price like clothing. How come formosa suits are so reasonable? Why does a phantom cost not much more than it did 10 years ago? This is in response to your belief about inflation but I think you're right in your referencing what the market will bear. There is no other explanation, the sales argument is probably just a small component. People aren't making more but they're spending more on things they didn't think they needed before. Everyone is fashion conscious with fashion having become so democratized with social media and celebs and some such. People are willing to spend a higher proportion of their income on clothing and just look at all the brand awareness people exhibit. None of those kids knew what balenciaga or margiela was before now we have hypebeasts copping slps and ricks like they're dunks. I think this is what's been pushing the ceiling higher and higher, you have a bigger pool of buyers all trying to buy lanvins on sale (7).



jet said:

I don't know man, nothing else in the luxury sector has doubled or tripled in price like clothing. How come formosa suits are so reasonable? Why does a phantom cost not much more than it did 10 years ago? This is in response to your belief about inflation but I think you're right in your referencing what the market will bear. There is no other explanation, the sales argument is probably just a small component. People aren't making more but they're spending more on things they didn't think they needed before. Everyone is fashion conscious with fashion having become so democratized with social media and celebs and some such. People are willing to spend a higher proportion of their income on clothing and just look at all the brand awareness people exhibit. None of those kids knew what balenciaga or margiela was before now we have hypebeasts copping slps and ricks like they're dunks. I think this is what's been pushing the ceiling higher and higher, you have a bigger pool of buyers all trying to buy lanvins on sale (7).

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I think most of it is probably people just spending more of their income on clothing, but a good chunk of it is also just rising incomes. Income for households earning over $200,000 actually grew considerably in the last five years. Even more so for households earning over $350,000/ year. I assume those people make up most of the luxury fashion market.

As for why luxury items didn't grow across the board, I don't know if you should expect them to. People can purchase fancy shoes and jackets a lot easier than they can Ferarris and yachts. Plus, the prices of luxury autos may be near their ceiling. Fashion, on the other hand, has created entirely new markets. Luxury sneakers, denim, and athletic wear now exist in a way they didn't fifteen years ago (or even five years, to some degree). Back in 2005, the prices for APC and Common Projects were enough to shock people, but $150 jeans and $250 sneakers is pretty normal now, at least for the regular fashion consumer.

Prices haven't tripled, but real estate prices have also skyrocketed, esp in those cities where you'd expect to find people wearing said items.



dieworkwear said:

Back in 2005, the prices for APC and Common Projects were enough to shock people, but $150 jeans and $250 sneakers is pretty normal now, at least for the regular fashion consumer.

Prices haven't tripled, but real estate prices have also skyrocketed, esp in those cities where you'd expect to find people wearing said items.

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APC's still cost the same as the did in 2005 or they have gone up $20, either way jeans doesn't really seem to change price as much as everything around.

Real estate has skyrocketed due to foreign buyers, who buy as investments and leave them empty for 360 days a year, which has resulted in said buyers, can't afford to live in those area anymore.

gdl203 said:

Good old catch 22. The more you (and others) do that, the more the whole supply chain will need to increase regular retail to account for the fact that more merchandise now sells at markdowns. And the more they'll do that, the more you'll be inclined to wait for markdowns.

Click to expand...

For me at least it's caused by the retailers need to have a sale every other week, so the retailers themselves have played a large part in creating the problem. Flash sale, mid season sale, end of season sale, birthday sale, my dog just had puppies sale etc.



Find Finn said:

For me at least it's caused by the retailers need to have a sale every other week, so the retailers themselves have played a large part in creating the problem. Flash sale, mid season sale, end of season sale, birthday sale, my dog just had puppies sale etc.

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To some extent retailers need a reason for people to come back to their sites, lest they run off to another site with a current sale or fresh drop, or start exploring different brands/trends.

On Jet's points about pricing, are we sure that the prices actually reflect what the market will bear, or are they attempts to figure out what prices will be tolerated in these nascent/expanding markets (hypebeasts/menswear/etc.)? If the latter, think some of those prices will prove unsustainable. Even if you're in a >$350k income bracket, you're going to feel burned if your $200 henley from Mr. Porter isn't noticeably superior to the $20 alternative from some fast fashion store.



johanm said:

Even if you're in a >$350k income bracket, you're going to feel burned if your $200 henley from Mr. Porter isn't noticeably superior to the $20 alternative from some fast fashion store.

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You're selling a look and a marketing message, not just construction quality. People buy designer clothing in order to indulge in fantasies. It's the story of how every Italian brand sells suits, and how Ralph Lauren sells everything he sells. Even if a $200 henley from Mr. Porter isn't noticeably superior from a $20 henley you might get at H&M, it'll be designed differently and come with a different meaning, which will make all the difference.

That Paul Bloom article earlier didn't seem to get much love, but IMO, his TED Talk is easier to digest. His point is basically: we see things for what we believe they represent, not for what they are. It's why you can get people to actually enjoy wine more if you tell them it's expensive (even if it's actually cheap wine). Part of the enjoyment is the idea that you're consuming something super expensive/ refined/ exclusive/ whatever. It's not too different from what happens in fashion.

The TED Talk, for anyone interested:

https://www.ted.com/talks/paul_bloom_the_origins_of_pleasure?language=en

Find Finn said:

APC's still cost the same as the did in 2005 or they have gone up $20, either way jeans doesn't really seem to change price as much as everything around..

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APCs cost the same, but it's not unusual to see $300-400 jeans being sold nowadays.



bry2000 said:

You raise interesting points here. I also try to keep my return rate very low. I prefer to shop in person and spend time trying things on and making deliberate choices, thereby minimizing my need to return.

I just wonder how it works for the purely on-line retailers, which offer free shipping and free returns. How do they feel about customers that order two sizes of one item, knowing that they will eat free shipping both ways. How do they view customers that are willing to order ten things, yet return nine or all of them because of sizing issues or they just did not like them. The customer is at no risk, but the retailer bears the transaction costs. Are the customers stigmatized even though they are encouraged by the retailer to order risk-free?

I would be interested in hearing the perspectives of anyone who is an on-line retailer.

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You have to also realise that that poor behaviour is also part of the pricing strategy, free shipping is just a marketing thing.

dieworkwear said:

I actually get the impression that people are raising prices because that's what the market bears, not because people are shopping on sale more. The sale market is so bad nowadays -- lots of things don't make it to sale season, at least not in the numbers they used to. Six or seven years ago, there was almost no incentive to buy at full retail because you could get almost anything you wanted during markdowns (size, style, model, whatever). There was a ton of good stuff at flash sites and outlets too.

A lot of that seems to have dried up now. I buy most of my stuff at full retail cause I don't want to risk losing out on it during sale season.

Obviously, if you're comparing prices to 15 years ago or whatever, then yea -- probably a lot of the markups have to do with increased sale culture. But there's been rapid inflation in the last five years, and I think that's actually better accounted for by the growing luxury market. People are earning more nowadays, and $1,000+ jackets are just less shocking to the everyday fashion consumer than they once were, which makes them easier to sell.

Click to expand...

With BI and CRM in online retail, brands are able to offer their most valuable customers access to the sale before anyone else, something they couldn't do 15 years ago. A few levels of customer will have sale access before its made public. All that helps to remove premium items from the sale before regular customers can access it.

Interesting number for you, research firm IHL estimates that globally businesses lose $8.4 billion every year in return costs due to wrong sizing. http://engage.dynamicaction.com/WS-2015-06-IHL-Ghost-Economy-Haunting-of-Returns-AR_LP.html

As for price inflation, this still applies http://www.businessoffashion.com/ar...e-the-prices-of-designer-goods-rising-so-fast

It's not really lost revenue if return costs are priced into the item though.

Once personalisation and data modelling becomes more widely adopted, I wouldn't be surprised if pricing was done on an automated 1-1 basis.