At Twikit we have noticed over the past few months that there is building upswell of mass customization projects going on in the fashion world. The fashion and apparel industries have long tried to implement mass customization projects. These industries have understood that each of their customers have individual tastes and unique sizes and have wished to accommodate them. Everyone is unique and people appreciate and derive higher satisfaction from things that fit them well.
If we see where fashion has come from we can look back to a time when everything was couture. Initially all clothing was individually made for a specific person. Due to the industrial revolution inexpensive mass produced items with limited choice in sizes began to take over the world. Subsequently brands emerged with some commanding thousands of percent in premiums over others.
These high margins have actually let new entrants enter the market to deliver innovation and value to consumers. The couture market has continued to exist, catering to ultra high net worth individuals. Many companies now seem on a path to bring back the exclusivity and perfect fit of couture through the use of digital manufacturing and mass customization for fashion.
Meanwhile a few trends have been shaping the mainstream fashion market.
The Spread of Premium.
Premium high end brands have grown globally. As well as expanding in number of stores and in penetrating global markets luxury brands have expanded in their customer bases as well. Their customers have become more diverse and more difficult to cater to holistically. This poses operational challenges for luxury companies. In manufacturing for example high end sunglasses have to be made for different facial shapes for the Chinese market than elsewhere. Larger watch faces on luxury timepieces are a trend also shaped by Chinese preferences as are larger smartphones and high end luxury SUVs. Can brands like Louis Vuitton continue to be all things to all people? Or will new brands fill gaps?
Affordable Items Backlash.
In addition to finding new customers similar in socioeconomic makeup to their old ones they have also found people who are able to afford relatively few items from their lineups. Relatively small ticket Gucci, Prada and Burberry items are worn as signature items by people unable to afford most anything else made by the brand. This is an opportunity in terms of revenue but also a threat to the overall longevity in the brand. Burberry had a major branding issue a few years ago when its hats started to become associated with British “chav” subculture. Boxing gear brand Lonsdale withdrew from the Netherlands because it became to be associated with racist customers. By making affordable items available there is the opportunity of discovering younger audiences aspirations but also the threat of finding audiences that you may not want to have associated with your brand. Simultaneously the proliferation of discount stores selling high end items has made some brands seem more pedestrian
Brand All the Things.
Some brands started with relatively few items eg suits or watches but have expanded. A typical luxury brand may now have a skincare line, a full line up of clothing from business to casual to socks to t-shirts, belts, pens, a perfume line, casual tennis shoes, baby clothing, homewares, mugs and much besides. These revenue opportunities are easy for companies to do but also pose risks. Brands such as Christian Dior men’s casual clothing and Yves Saint Laurent have suffered immensely in previous decades by being licensed to partners who produced relatively low quality clothing with those brands. How does a brand specializing in clothing ensure the quality of their mugs or candles? By putting a brand’s logo on literally everything doesn’t the brand risk becoming amorphous and weak?
Companies such as H&M and Inditex have outperformed other retailers in delivering goods to market. Zara parent Inditex can go from an idea to a product in stores inside eight days. By tracking data, having many more SKU’s and being more responsive these companies can outperform others. Zara can be quicker to react and notice fashion trends while having much less dead inventory. Zara is more nimble and has less fashion risk than others. Some companies have to predict and order their collections two years in advance, Zara only has to do this in real time. Zara, H&M and Uniqlo continue to do well. Meanwhile below them in price companies such as Primark are growing with trendy low cost clothing. These companies are putting pressure on traditional retail companies such as department stores and higher end brands.
Nationalistic trends are making “Buy British” or “Buy American” reverberate more strongly nowadays. Companies concerns over unfair labor practices and unsafe materials used in their products (BPA baby bottles and toys) has lead them to consider reshoring. Rising labor costs in China have also lead to reshoring production to Europe or North America is more viable. Increased development of factory automation and digital manufacturing also means that “lights out manufacturing” where there are no humans in the factory makes it more logical to put factories close to headquarters or close to the consumer. Adidas Speed Factories bring robotized production of apparel and shoes back to Germany. According to Addidas’ Gerd Manz, “The set-up of the first SPEEDFACTORY has kicked off in Ansbach, Germany, to propel a global network of automated production which brings cutting-edge technology to cities around the world. These first 500 pairs will help us set the scene for large-scale commercial production so each consumer can locally get what they want, when they want it, faster than ever.”
Internet retail has continued to grow. H&M and Zara’s large strides forward as well as online sample sales of high end brands prove that no market segment will be immune to online. Consumer behavior has changed as well with people ordering far more than they intend to keep and returning a large portion of their online purchases. Will Amazon’s predominance in online retail mean that that company will hold sway over fashion as well eventually? Many users are buying and shopping via Mobile, but who will win the fashion mobile experience? Will a new war be fought over who controls retailing on the mobile phone?
Brand partnerships and cooperations.
Rap stars have become fashion designers and lifestyle brands and athletes shift millions of shoes. Rather than just be a face on a billboard a new generation of global superstars wants to have their own capsule collections and become art directors for brands. Brands in different domains are partnering with each other as well to cross pollinate their respective popularities.
New Narrow Aficionado Brands.
Allbirds, Common Projects, Article No., Hender Scheme, Filling Pieces, ETQ Amsterdam and Andrea Zori are all high end sneaker brands. You probably have not heard of them. They may not want you to have. Rather than take on Puma at being Puma or out-Nike Nike these companies are trying for limited market niches. They don’t want to conquer the world but to dominate a certain niche. For certain people brands like Hydrogen are super important in their lives and worlds but outside their ‘filter bubbles’ they may be virtually unknown. In some cases brands such as Supreme become much better known outside their niches but these new class of brands seem to want to become the super premium of a particular kind of sneaker or clothing aficionado. Allbirds is very much targeted at the Silicon Valley and San Francisco set, whilst Hender Scheme makes $1000 sneakers in Japan and is unknown of outside certain circles. You may be surprised to learn that Seiko makes a $60,000 watch. Watches made by Seiko’s Micro Artist Studio are prized and the Grand Seiko Eight-day Power Reserve is prized amongst collectors. For watch nerds the fact that only a fellow collector would recognize and appreciate the watch is part of its appeal. Rather than scream wealth as one would do with a Hublot Big Bang or signal wealth with a Rolex, having a rare Grand Seiko identifies you as an afficionado. Seiko is a very down to earth mass appeal brand and certain people may look down on Seiko watches as being to cheap or not as exclusive as other brands. Many true watch collectors do appreciate Seiko’s Spring Drive and other innovations and the fact that only those “in the know” would also appreciate them is part of their appeal. In addition to small brands targeted at small groups some large brands may also be able to have segments or lines that could appeal to collectors or “those in the know.” Some companies have been following a limited appeal strategy for over a hundred years. French bag maker Goyard is coveted by those in the know and makes some of the most expensive and difficult to obtain bags in the world. But, whereas competitors Hermes and Louis Vuitton are recognized, known and marketed globally Goyard shrouds itself in secrecy in order to maintain its appeal. Unknown is the new known?
The Ethical Consumer.
Biological cotton and use of more natural materials is on the rise with some exclusive brands. Across many product categories awareness is on the rise. Unfair labor practices and child labor are also a worry for many consumers. Previously any outcry about unfair labor practices by a brand was usually met with a PR wall. Now we’re seeing a shift whereby brands identify child labor as a threat to their license to operate and are actually taking meaningful practices against the practice. In some cases this is leading companies to go to reshoring as mentioned earlier. A connected world means that a global boycott of your brand could emerge as you are sleeping. The internet and “clicktivism” has made it more expensive for brands to cut corners on the environment and labor practices. Outcry and fall out from personalities in the fashion industry (John Galliano at Dior) making missteps has woken brands up to the prospect of an overnight PR disaster that could consume them. New brands are also emerging with biological materials, ethical labor or pro ethics practices. These start ups mainly differentiate themselves through how they make their things and the impact those things have in the world. Companies such as Patagonia are proving that sustainability is not a narrow appeal thing anymore and can be coupled with sustainable business success.
Puma’s Mongolian Shoe Bar B Q and Nike iD have been around for eons in sneaker time. These companies were some of the first to use mass customization to make relatively affordable fashion items available to the public. Levi’s Personalized Pair customized jeans were available in the 90’s. Companies such as SuitSupply and Indochino have been letting people customize their suits. Spreadshirt lets you customize your own t-shirts or customize someone else’s designs. Shoes of Prey lets women design their own shoes. Skelmet, Materialise, Hoet and others are offering mass customized glasses. Aetrex offers mass customized shoes while ISlide does the same for slippers. Lately companies such as Google have been entering the game with data driven fashion. “Algorithmic” mass customization whereby data can be harvested from social media, IoT devices or mobile phones to power mass customization is likely to be a big trend going forward. What we’re not really seeing much of is mass customized fashion products that increase the functionality of the item. In personalized medicine, hearing aids and surgical guides we see tens of thousands of mass customized items be produced for one individual wearer in one shape perfect for them. Current mass customization implementations center on adding logos or letters to items or selecting different colors. There are many vendors who wish to let you put your initials on a shoe or choose purple as a color for it but it is still mostly up to couture to get you individualized shoes that actually fit your foot perfectly.
If we look at the above major fashion industry trends than this list is by no means exhaustive. These are major movements however that are reshaping much of the fashion landscape. There is something unique about the last trend however. Mass customization will let companies take advantage of and dominate the other trends.
By using mass customization, coupled with intelligent software and digital manufacturing (what we at Twikit call The Power of 3D Customization) companies can thrive and utilize the mayor trends above. With 3D Customization goods are produced quickly, locally, in limited editions through customer interaction, community and fast product design. By producing on demand through digital manufacturing tools complexity and unique are free meaning that true mass customization is available by making unique goods that fit a person perfectly through intelligent software tied to digital manufacturing.
Mass customization can, if implemented correctly, let companies take advantage of The Spread of Premium. Individual tastes, national tastes or body shapes can be catered to by letting companies produce the right shapes for the right people. Brand All the Things can be done cost effectively by leveraging digital manufacturing to many new products. If there is Affordable Items Backlash on a particular product than this product can be discontinued at the flick of a switch because there is no inventory.
How do you beat Inditex and Zara at their own game? Make even Faster Fast Fashion through mass customization coupled with digital manufacturing. Make items on demand in stores on near consumers so you have no inventory and can daily come up with new items and styles.
By producing locally Reshoring can be done cost effectively by building up a digital supply chain and 3D printing and other automated production technologies close by. The Internets is forcing companies to become more agile. One of the major advantages of Fast retailers, internet retailers and flash sales companies is that they have no inventory and therefore lower costs than other retailers. By tying digital manufacturing to ecommerce companies can quickly on demand produce without inventory and with less fashion risk. Online returns are less of an issue with adequately sized items and the company can be more efficient with its capital than when it has to order overseas well in advance.
Brand partnerships and cooperations and New Narrow Aficionado Brands can be created more quickly and cost effectively. Brands can enter new niches in the space of a few days and develop new partnerships quickly. By producing locally with high labor and safety standards The Ethical Consumer is catered to in making lower environmental impact items with less waste.
Through the Power of 3D Customization companies can outcompete rivals by being faster to market and more efficient while giving consumers what they want. If this seems like something you would like to explore, contact the Twikit team.