NEW WAYS YOUNG DESIGNERS ARE REACHING CONSUMERS

- - Fashion Business

A YouTube video on Neighborhood Goods.

It didn’t take a global pandemic to know that the retail sector of the fashion industry was in trouble. Over the past few years we have all watched traditional retail stores fail, as more and more consumers started to spend more of  their time and money shopping online. No one seemed exempt from bankruptcy, both specialty and department stores alike. Barneys New York, Jeffrey’s, Neiman Marcus, J.C. Penney and Lord & Taylor have all declared bankruptcy. These closures not only affected retailers and their staff, but also hurt the pockets of many designers, especially smaller, independent designers, who were able to get their start from these stores. Even mega-retail chains have been struggling with declining in-store shoppers, astronomical rents, and debt. Unfortunately this trickle down effect results in cancelled orders and invoices that are left unpaid, a burden the brand must take on.

Even before COVID-19 hit and the economy was thriving, the wholesale system was hurting many designers and running their business to the ground. Department stores constantly pressured designers to create something new and exclusive for them, but in the end, it was never really worth it for the designer and they only obliged to keep the department stores happy and hopefully keep their orders coming.

Many designers started to realize that the traditional wholesale model wasn’t working for them and began to ask the question…what’s next? 

Today, young designers are looking for creative outlets to present their pieces to potential consumers. For many, the direct-to-consumer model has been a successful one. But for others, they view the benefits of a wholesale partnership as a vital step towards creating brand awareness and building a customer base, whether their goods are in a brick-and-mortar store or on a retailer’s site.

NEW OPTIONS

There are a few new and exciting options surfacing for brands that value the exposure that multi-branded retailers offer, but where designers can still take control of their inventory. Many retailers are operating on a ‘retail-as-service’ business model, which means that rather than purchasing inventory from brands, they may lease out space and/or provide logistical and marketing support for a fee, in addition to potentially taking a commission on sales.

Here are a few platforms and marketplaces that young designers are excited about:

NEIGHBORHOOD GOODS

Inside Neighborhood Goods. (Photo Credit: D Magazine)

Neighborhood Goods is an innovative alternative to the traditional department store model. The store provides brands with a low risk and less expensive way to test the waters of the physical retail model. Neighborhood Goods charges brands a small fee to display their designs in one or several of its physical locations (Austin and Plano, Texas and New York City), as well as on their e-commerce site where the retailer also takes a percentage of sales.

Neighborhood Goods features an experiential, appealingly-designed format with excellent customer service and even frequent food pop-ups. In April, in response to COVID-19, Neighborhood Goods launched The Commons, a section dedicated to featuring small brands who were negatively impacted by the pandemic, at no cost to their struggling businesses.

Neighborhood Goods’ smart business model, and $11 million in venture capital, put it in a stronger position than most to weather the current retail storm. According to co-founder Matt Alexander in an interview with Fashionista.com, “In an industry struggling to adapt to the future, this whole crisis is going to accelerate the prevailing winds in the retail industry, and we end up being in a relatively good spot on the other side.

THE YES

An image from The Yes shopping app. (Photo Credit: Vogue)

The Yes is the brainchild of fashion and tech veterans Taylor Tomasi-Hill (Street-style star and Fashion Market Editor at Teen Vogue and W Magazine to name a few), Julie Bornstein (StitchFix, Nordstrom, Sephora) and Amit Aggarwal (Google, Bing, Groupon). The mobile shopping platform carries well established brands, as well as young designers ranging from Prada to Khaite.

Every brand has its own storefront in the app and The Yes uses dropship, meaning it doesn’t hold its own inventory. The site collects a share of revenue from each sale made through the app. The Yes also uses Artificial Intelligence (AI) to personalize every user’s feed in real time. For example, when you click “yes” on a style, you will see a variety of similar looks.

SHOP

Shopify launches Shop, a new mobile app. (Photo Credit: TechCrunch)

Shop is another mobile shopping site and describes itself as your personal “shopping assistant.” The site was launched during the COVID-19 pandemic by Shopify, it’s a go-to tool for independent brands and retailers setting up e-commerce.

This savvy site allows shoppers to shop numerous retailers all in one place. One unique feature is that the app allows shoppers to locate and shop businesses that are local to them, but only if they use Shopify. The site also offers speedy checkout and helps the consumer track and receive updates on all orders.

SHOWFIELDS

Showfields NYC. (Photo Credit: Time Out)

With a brick-and-mortar store in New York City, and a soon to open Miami location, Showfields’ goal is to curate innovative, unconventional, and relevant digitally native brands in one giant, highly Instagramable space. The store frequently hosts new and exciting events and initiatives to engage consumers and create a buzz. And so far they have done it successfully even through quarantine.

The top floor of Showfields is used as a community space with food and events that have ranged from theatrical performances and art installations to fundraisers and digital discussions. American Express has also sponsored a special curation of Black-owned brands; the credit card company is only charging brands membership fees, but the brands keep 100% of their sales.

RE:STORE

A look inside Re:store. (Photo Credit: Re:store)

Selena Cruz, a Silicon Valley venture capitalist, recently opened the doors to Re:store in San Francisco, CA. The store positioned itself somewhat of a WeWork space for unique, saught-after, online-only or difficult-to-find brands. Re:store carries many millennial-targeting labels that are popular on Instagram, all together on one space. Of course the store is very cool and Instagrammable, which of course draws in the millennials.

Brands pay only $350 a month as well as a 20% commission to hold a space on the experimental retail floor. RE:store also offers a community workspace offering young brands to work with and interact with their customers, all in the heart of Downtown San Francisco for a fraction of the price. The opportunity for these brands to connect with their customers is priceless, particularly those for whom this is their brick-and-mortar debut.

DEPOP

Hand-painted boots by Zigzaggoods on Depop. (Photo Credit: Craft Industry Alliance)

Depop is a new digital marketplace for handmade items that Gen Z designers are excited about. The fun and eccentric online mall has a young demographic; of its 21-million users 90% are age 26 or younger—members of Gen Z, the first all-digital generation. The site looks a lot like Instagram, so it’s very familiar and easy to use. It’s a sellers’ lifestyle shown in images. In a recent New York Magazine poll teenagers voted Depop the top marketplace for buying resale goods (over Etsy and eBay). If you’re interested in reaching a young demographic, it’s definitely worth a look.

Depop’s CEO, Maria Raga believes in supporting the growth of young entrepreneurs. “I view my role as more than just running a company. It’s about helping young sellers fulfill their passions, stretch their business skills, and become independent business owners who create fashion trends,” she said in an interview with Fashionista.com. Another plus, Depop only takes a flat 10% fee on each transaction, including shipping.

In the coming months and years, post Covid, retailers will be looking to up-and coming designers for ideas on how to give consumers what they want. Stay tuned…

So tell us, what are you doing to get your brand out there?

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Antonia Sardone

Antonia Sardone

Antonia Sardone is a new contributor to the University of Fashion. She is also a freelance fashion consultant, stylist and writer. Antonia Sardone graduated from the Fashion Institute of Technology with a degree in Advertising Communications, Marketing and Fashion Journalism. She is an industry veteran having worked for WWD for over fifteen years and has strong relationships with designers worldwide. Today, Antonia Sardone continues to write reviews for WWD as well as work with many contemporary designers on a variety of projects from helping to re-launch their websites to writing their brand books. She enjoys raising her children to be creative individuals, as well as styling, writing and traveling.