Silhouettes have shifted. Technology has allowed for new opportunities. Most importantly, however, has been the advent and evangelization of social media and the Internet. The ability to offer seamless customer service, source inspiration and communicate internationally 24/7 online has made doubtful a concept that was once seemingly unshakeable – to sell clothes, a brand must make them available physically, in-store, somewhere.
E-commerce isn’t going anywhere – but that took a while for both brands and consumers to fully embrace. A lot of this has to do with the speed of information and the ability of logistics companies to properly crunch data so that it transforms from numbers on a page into insights. A study by advisory firm Technopak showed that online retail will add $5 billion annually to the income of logistics companies by 2021 – all for the sake of figuring out how to best turn clicks online into packages shipped expediently.
This isn’t just a Western trend either. China’s online sales are predicted to grow by 64% in 2014. BRIC nations (Brazil, Russia, India, China), in fact, outrank both the U.S. and the UK on online shopping activity, with total global business-to-consumer sales predicted to hit $1.5 trillion this year worldwide. So, the truly international nature of the web has leveled the playing field and shifted the influence from the boulevards of Paris and high-rises of New York to any creative mind with a computer. Yet, despite the tremendous success that e-commerce has reaped for retailers like Net-A-Porter, Piperlime and Amazon, to name a few, there has yet to be a major shift in innovative upscale U.S.-based brands moving entirely online.
Owning “Online Only”
Enter ISAORA. A self-proclaimed “advanced sportswear brand” launched five years ago in New York City, ISAORA has quickly established a niche as a high-tech, forward-thinking label inclined towards zen-like simplicity and style through function. As everything it produces is made in the USA with fabrics sourced from Japanese and Italian mills, the price point is high, but not prohibitive. Recently, the brand has made headlines (digitally, at least) by proclaiming that it is pulling its garments from all retail stores and selling exclusively, direct-to-consumer through its website.
There are a few major benefits to this tactic. First of all, it’s simply cheaper to eliminate overhead and consolidate shipping. Hopefully, this translates into more affordable prices for the consumer and/or more innovative, experimental clothing from the brand. Secondly, third-party retailers are no longer able to dilute ISAORA’s messaging and aesthetic by merchandising it poorly or inflating on-the-rack prices. Finally, ISAORA now controls all communication to and information gathered from its customers, which in turn should help the folks running the brand to better understand exactly who they are designing for.
If ISAORA were injected with steroids, it would evolve into something like Acronym. This tech-first apparel brand does have a prohibitive price point, but it also has amassed a cult following that obsessively tracks each season’s collection despite the brand’s complete lack of any form of marketing. Equally innovative has been its approach to wholesaling. Although Acronym has not chosen a direct-to-consumer model, the brand has eschewed schilling its goods to stores and instead created an online-only platform called Subnet-Mask, which retail outlets must in turn be invited to join and can then view and order pieces from upcoming collections as they please. This requires that buyers are savvy enough to know exactly which $1,000+ technical jacket or hard shell pant their consumers will want. In the new era of buying online, there’s no salesmanship – only sales.
A brand famous not for secret processes like Acronym, but rather its openness, is Everlane. Taking a page from the Gilt Groupe playbook, this online-only retailer seeks to shed some light on the mysterious arts of merchandising and production by being completely transparent (or at least claiming to be) about how every garment is made and at what cost and markup. A $55 slim fit oxford shirt, for example, is broken down to around $11 for fabric, an additional $11 for cutting, sewing and finishing and approximately $5 for transport – a total of $27. The mark up to purchase the shirt prices it at $55, but Everlane claims that this price would double to $110 at any traditional retail outlet (this estimate is a realistic one). Thus, Everlane provides a significant value to consumers without compromising the quality of its clothing through an online-only, direct-to-consumer distribution scheme that completely cuts out “the middleman” of third party vendors as well as the overhead of operating a brick-and-mortar shop.
The downfalls of web-exclusive retail are myriad. If a brand sells only online then tactile consumers might shirk at the concept of ever even giving it a chance, despite claims of quality or rave reviews. Furthermore, it’s nearly impossible to properly communicate fit online, which could lead to a slew of products being sent back from unhappy buyers and an increase in the cost of doing business. Finally, it’s arguable that editorial coverage is tougher to get when solely selling online. Editors and celebrities can’t walk into a flagship store or stumble upon a little studio while shopping around. Because of this, word of mouth and social media evangelization has to be excessive in order to gain mindshare outside of a loyal fan base.
The lingering question for professionals in the fashion world is if any surge in e-commerce is truly disruptive enough to shift the tides of the industry. Despite the success of the forward-thinking brands featured here, some of the most well-known online-only labels have deliberately undermined their own distribution platforms by moving into stores. Perhaps the most infamous case of this digital-to-analog switch concerns Bonobos, a brand designed around the concept that “everyday men” don’t particularly enjoy shopping and often find it difficult to track down pants that fit. The online-only brand was a breakaway hit when it launched, yet after five years founder Andy Dunn completely reversed his stringent views on the revolutionary nature of selling clothes online. Quoted in The New York Times in 2012, Dunn argued that “the cost of marketing a website and the cost of free shipping both ways was approximating a store expense,” which in turn led him to inking a deal with Nordstorm and opening a handful of physical retail locations across the U.S.
At the end of the day, at least for some brands, a click of the mouse can only go so far.