Quick notes:

  • Fast fashion is going out of style, in favor of high-quality products that are worth the price.
  • Discounting is no longer the big trend it once was; brands are moving toward “compelling” prices instead.
  • Big brands will not attempt to compete with hyper-localized sellers such as Stitch Fix.

 

The apparel industry is changing. That was clear earlier this month as the fast fashion brand Forever 21 filed for bankruptcy ahead of shuttering the majority of its stores around the world.

Forever 21’s failure can be pinned on a multitude of factors. The company failed to embrace an online presence while expanding its costly brick-and-mortar footprint. Consumers, furthermore, have largely abandoned the fast fashion ethos of cheap and single-serving outfits. While consumers once flocked to Forever 21, H&M, ZARA, and other brands offering high fashion at a fraction of the price, today’s shopper is willing to pay a premium for products that are eco-friendly, made by workers making a living wage, and that, most importantly, will last more than a few months.

Even legacy brands are adjusting their strategies to better fit within the rapidly evolving landscape of apparel in America. Perhaps no company is pivoting harder than Gap Inc. The 50-year-old icon has struggled over the last decade due to a mix of stagnant sales and creative decisions that tried to chase the fast fashion market.

“Fast fashion is on the decline. For a while, Forever 21 and H&M were our main competitors in the value sector. They still are, but they seem to be losing their foothold,” says Eddie Ng, a buyer at Gap responsible for managing the assortment of inventory in stores and online. “It’s a shift in the industry. Consumers are investing their money differently now. Moving forward, it becomes about staying true to our rich history, embracing it.”

Gap’s strategies show how many big-name brands are moving forward in the current market. What won’t change, according to Ng, is the company’s commitment to offer quality for a good value.

Discounting can weaken value

One of Ng’s tasks as a buyer is to figure out the discounted price for each item. The goal is to determine how low each item could be priced but still be profitable.

Discounting, however, sends mixed messages to consumers. For instance, the deep discounts available on Black Friday are creating an unsustainable sales race to see how low each brand can go.

Ng says, “If it’s 80% off this year, where do you go from there? People rightfully expect to see better offers from one year to the next, but eventually, we’re all going to give it away for free.”

One current trend is abandoning low prices for compelling ones. J.Crew, another floundering fast fashion seller, is being outpaced by its sister company Madewell. Like Trader Joe’s does for groceries, stores like Madewell and Everlane offer quality items at a sensible price. Sales aren’t offered because they aren’t necessary to motivate consumer interest.

The new goal is to show customers why a shirt, pants, handbag, or whatever, is worth the sticker price. The price is what it is, and these brands now endeavor to show why that represents a good value. Discounts often damage that value proposition. It’s about highlighting the effort that went into making something, which relates back to the brand’s identity and story.

Ng says, “When H&M and other stores price something at $60 and then take it down to $50, and then you have a sale that takes it further down to $30, the value claim dwindles. Companies are realizing that shoppers today are paying more for higher quality. It has to be noticeable quality, though. It can’t just be an inflated ticket with no substance backing it up.”

New styles are available earlier online

After buyers like Ng place their orders and set each item’s price, Gap’s vertically integrated production team creates the clothing and sends it to distribution centers (DCs). The products could wait in the DCs for months before shipment to stores. As soon as they’re scanned in by the DC, however, online shoppers can see and order the products before anyone else.

This period offers consumers a chance to get next season’s styles early. As companies like Gap move away from the discounting model, it can be especially difficult to communicate value to online shoppers.

Ng recalls a particularly nice sweater that was released a few seasons ago. The $50 price tag was higher than normal for a comparable, rather plain sweater. The fabric was so soft and sumptuous that the team believed it would sell out quickly.

However, online sales were all but nonexistent. “Online for that was terrible. When it arrived in stores, though, sales were on fire,” says Ng.

Stores clamored for more. The team realized that the online product description didn’t convey the quality of the material. Online customers had no idea just how luxuriant the sweater felt. Once the description was updated, and some customer reviews landed on the page, online sales started matching the in-store reports.

As brands like Gap start highlighting value instead of the low prices of the fast fashion era, shoppers should be mindful about taking more risks. Clothing and accessories from Gap and its competitors should start feeling more luxurious as price tags rise.

Big brands staying out of hyper-local styles

One thing that consumers won’t see, though, is any effort for big brands to compete with Stitch Fix or other hyper-localized sellers.

“No company like Gap can fit all the needs that people have,” says Ng. “Since we’re vertically integrated, we own all our product. It’s too expensive to create a pattern specifically for the northwest or a coat especially for New York. Companies like Stitch Fix and Amazon don’t make the product and don’t necessarily own the inventory. They’re selling you options. Gap is selling clothing with a vision behind it each season.”

While companies like Gap don’t cater to each region, they do ensure that stores in certain climates are appropriately stocked. Cold stores, such as the ones in Canada, receive outerwear early. Hot stores likewise may receive a short-sleeve version of a shirt and forego the long-sleeve style available elsewhere.

“It’s easier to shift the timing of what ships to different stores based on seasonal need than it is to curate new and different patterns based on local tastes,” says Ng.

The big styles for the holidays and spring

Ng orders for Gap’s baby division. While each sector is, he admits, “a little siloed,” he is privy to the trends for upcoming seasons.

Buffalo plaid is going to be big across the whole family. (Buffalo plaid is a black-and-white checkerboard print evocative of classic Americana and the Old West.) The vision is to offer unisex, matching patterns that the whole family can wear in tailored styles. For this, think about the whole family gathering to open presents on Christmas morning.

“We’re trying to be more conscientious of what everyone is doing so that it looks like one story. It’s also about what looks good in store. Imagine if the kids section was neon and adults were cool blues. It would look ridiculous,” says Ng.

Spring will be an elevated dressy moment that is very much about eyelets, floral patterns, and outfits that allow matching for older-younger siblings and parents-kids. Chambray will also be highlighted, which is a wink toward Gap’s larger plans to utilize denim. Gap jeans were at the core of the brand’s identity during its apogee of popularity in the ’90s. Today’s goal is to recapture that prestige by staying true to those roots.

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