The So-called Benefits of the Great Recession

Maybe it was the simple fact that my parents were, on average, a good ten years older than most of my peers' parents and I was born when my mother was nearly 40. But, for me, The Great Depression informed nearly every minute of my childhood and teenage years—from the “turn off that light. What do you thing we are? Made of money?” to the constant depression-glass lens through which every experience was viewed.

Growing up, I often felt that my parents had more in common with my friends’ grandparents than their parents. They were, after all, in their early 20’s during the Thirties. My father had ridden the rails, working at jobs anywhere he could find them from construction work in San Francisco to building carnival rides and barnstorming with the Eyerly Brothers in his home town of Salem, Oregon. My mother had travelled to the alluring West from the northern, frozen North Dakota plains in search of love and work in that order. At home, we canned, baked bread, sewed our own clothes, and repaired everything. But, then, we were “lower middle or working class,” a term that seems to have disappeared in the economic halcyon days that followed.

Laying my rather peculiar past aside, most of us boomers did have parents who grew up and survived the depression, remembering the scarcity and the deprivation, which was then followed by the war years. But what lessons did we take away—from them, then and now? Very few. It might even be said that we tried very hard to avoid those lessons. Although the Green Movement may have grown out of the social activism of the ‘60’s, most boomers were not socially committed at the time and very few continued along the social activism pathway, except perhaps where it involved social, sexual and personal freedom. Lots to be argued with here.

Mostly, we boomers and our children have experienced over-abundance and have relished in it. I cannot count the number of times people have said to me lately that they could never have conceived the economy turning downward the way it has. Having to cope with less for many of us has seemed like an early death sentence. I am supposed to be enjoying these years. Isn’t that the American Dream?

Now, so many commentators have pointed out that we as a Nation may finally be learning our lessons—about having enough, about frugality, about sustainability, about valuing experiences and people over labels and stuff—that I have lost track. I actually believe, on the other hand, that the current Great Recession is actually only building up pent-up demand among many people. The minute conditions ease, we will probably see ourselves returning to our old ways.

Only this time, we can’t afford such self-indulgence, if we ever could. The abundance we thought we enjoyed was actually a delusion. Remember those books we all bought in the late ‘60’s and early ‘70’s—Frances Moore Lappe’s Diet for a Small Planet and Steward Brand’s The Whole Earth Catalog. Their messages have even greater relevance, urgency, and poignancy today. Ignoring them now is not auguring a symbolic early death sentence, but tolling a death knell for the planet.

Slow Fashion in Celebration of Earth Day

The “slow fashion” concept traces its roots back to the slow food movement, which began in Italy in the ‘80’s as a reaction to fast-food retailers, like McDonald’s. Since then, the movement has spread to architecture and now to clothing design, manufacturing, and consumption.

The characteristics all three share are sustainability, transparency, fair trade/living wages, and localization. That means for sustainability: the development of more sustainable products through recycling or re-purposing existing products, using organic or natural materials whenever possible, and developing lasting products that may be reused or recycled after their use.

Transparency, here, usually refers to a manufacturer being open about and communicating complete information about products—for example, how a product was made, where it was made, what materials the product is made of, who made the product and whether or not those workers were paid a living wage. Localization places value on local or regional production and the use of local products.

Nearly everyone associated the “slow” movement recognizes that no one retailer or manufacturer will successfully realize a business that is completely sustainable, transparent, or local. All efforts will involve some kind of compromise. But openness and encouraging consumers to reevaluate their attitudes toward fashion and clothing will, they believe, contribute toward greater sustainability in the fashion industry.

Although “slow fashion” might at first appear contradictory, it is possible to honor fashion while producing and consuming purposefully. In the words of Dr. Hazel Clark from the Parsons New School of Design at a conference held late last year: “Change [toward adopting slow fashion] requires more thoughtful and flexible design, which can retain the cultural significance and magic of fashion while producing clothes that are conscientious, sustainable, and attractive.”

Perhaps the best known company that embraces “slow fashion” is the British “eco-chic” department store Adili. According to CEO Adam Smith, “Slow fashion is not just about responding to trends. It is a mentality that involves thinking about provenance and buying something that won’t look unfashionable after one season.”

As an increasing number of consumers are drawn to the values-led retailers who support slow fashion, the more it would appear that the slow movement will now be on the fast track.

Act Vertical or Be Vertical: Gaining the Competitive Edge in Retailing

According to a recent study by Kurt Salmon Associates, those retailers who “act vertical” are in a greater position to weather the recession because of their ability to offer unique product, demand higher prices, react more quickly to consumer trends, and replenish hot sellers more quickly.

"The recession is forcing retailers to radically rethink their businesses, and many are in survival mode," said Cari Bunch, a retail strategist at Kurt Salmon Associates. "However, in our view, the economic downturn has created much greater clarity about what retailers must do to be successful over the next decade."

“Act Vertical retailers have learned to collaborate internally (by breaking down the barriers between functions), externally with manufacturers and suppliers (without owning production) and externally with consumers by redefining customer research as a continuous conversation rather than a one-off event.”

Although this study recommends that retailers act vertically not actually become vertically integrated, the success of American Apparel, which boasts that its products are “Made in Downtown LA,” has used vertical integration not just for competitive advantage but also as a basis for cause marketing, mostly by calling for immigration reform among several other causes it supports.

As the above quote shows, as well as comments on the American Apparel website indicate, collaboration with manufacturers and customers is central to catching the curl on the new wave of retailing. SA VA, a semi-vertical women’s apparel company that will launch in Philadelphia and online in September, has recognized that true collaboration with customer necessitates her involvement with design as well as the company’s ability to react quickly her needs. To do that, SA VA will develop regional, domestic Garment Centers that will localize production and, in the process, work toward reducing the large carbon footprint affixed to most clothes, most especially the least expensive, as well as creating local jobs.

Okay, Kutcher had help

Lamar Advertising decided to help Ashton Kutcher along in his bid to become Twitter's first "millionaire" and aired a message to follow him on the 1,133 digital billboards it operates nationwide, according to Media Week. That turns out to be 34 million impressions in all when when the campaign ends this week.

Still the point made yesterday holds. Kutcher did not pay for this campaign. It was taken up in the spirit of "let's beat the big guy," not just by the individual, but also by small business. Isn't there a message here? Smaller. Slower. Better. Enough. All words that appear frequently in the subtext of the New Economy, hence the New Wave of Retailing.

The Power of One: One to Many, Many to One

If there were any doubts left about the power of the individual via the internet to make a greater impact on the world than larger media organizations, the last week should have removed them. Ashton Kutcher beating out CNN as the first to reach 1MM followers on Twitter and Susan Boyle becoming an instant international success through YouTube are two stunning examples of how an individual can achieve far-reaching impact now through technology. True, Mr. Kutcher is a celebrity with a flair for geekiness, but it is conceivable that any savvy internet user with determination could have accomplished the same feat.

Power now resides in companies that are developing open platforms that allow individuals to build on, find fame, create new products, connect with friends, and reach new contacts and ideas. But this power is open, not controlling (See Jeff Jarvis, What would Google Do?). It finds value by holding people with a velvet glove. It embraces them and sends them on. It appears suddenly as a nudge, not necessarily as a banner hammer. Google, in fact, does no advertising, but controls most of it on the internet. Your success is their success. It’s shared. As is, Twitter’s, and Flickr’s, and Glam’s.

Sharing and openness are not ideas that we normally associate with capitalism, but the new economy and the new wave of retailing will utilize sharing and openness as cornerstones of business. The sooner retailers understand that the blueprint for building successful retail organizations has fundamentally altered, the sooner we will see all retail outlets—bricks and mortar, catalogs, and ecommerce—accommodating the individual rather than winning them over for a one-time purchase often at a discounted price or with free shipping.

No Longer Business As Usual

A recent piece in Women’s Wear Daily (13 April 2009) speculated on what the new fashion paradigm might look like. Admitting that the industry is “struggling to keep up,” the WWD staff runs through a laundry list of what retailers are facing: cut backs, slow vs. fast fashion concepts, the demise of marketing, overabundance, the nosedive of luxury markets, more distinctive and better targeted merchandise, doing more with less, and so on.

In between, a few designers and retailers make some interesting observations that point toward an exciting future, most notably, Inacio Ribeiro and Andrew Rosen.

Co-designer of Clements Ribeiro: “The consumer is so well-informed today, they don’t want to be told how to buy and they feel conned and manipulated by big flagship stores, and by the disproportionate margins the brands are making. . . . However the consumer will welcome suggestions, and that is the way forward.”

Further on in the article, Andrew Rosen, president and co-founder of Theory, states: “We have to get back to creating innovative product, concepts and merchandising ideas to stimulate and energize the customer. . . . You just can’t get away with making clothes and expecting them to sell. You have to be good at what you do. Clothing is not just a status symbol anymore. There has to be a sense of relevancy to it.”

Oddly, the impact of the internet and the evolving consciousness of the new consumer are otherwise glossed over. In conclusion, the article states: “None of this means companies will outright abandon the strategies and methods that helped them get started in the first place. The future of fashion, however different, seems likely to be based mostly on its present.”

And why are they so sure?

Collaboration, Open Business Practices: Counter-Intuitive to Most Traditional Retailers

In traditional department and specialty stores, boutiques and catalogs, the business mantra has always been to capture “share of wallet” or customers and their loyalty by offering some type of competitive advantage—unique product, great location, fabulous surroundings, convenience, unbeatable customer service, better pricing, exclusives on designers and products, close-outs or discounts, and the like. Negotiating with vendors for carrying certain fabrics or colors, designers or collections, even for picking up out-of-season merchandise could be fierce. The Macy’s/Gimbel’s rivalry has become the stuff of legend and has defined the retail business even before the rise of the great department stores.

Collaborative organizations, open business practices, and other new methods of building businesses are, in fact, anathema to most retailers. These methods as outlined by Wikinomics, What Would Google Do?, and a host of other books appearing in book outlets are for most retailers counter-intuitive. Why risk sharing anything that might give you a competitive advantage with anyone, let alone a direct competitor?

Finding a competitive edge for retailers has always been a challenge. In a world of instant verbal and visual communications via internet and digital photography, the prospect has become daunting. Even couturiers can hardly keep a collection together during a season. Just hours after a collection debuts on the runway, manufacturers have already copied the best, which might even appear in a store in just over a week. The result: the consumer gets the “look” at a fraction of the price, and the retailers offering it cashes in before a more traditional retailer can even receive the product in store. The “look” is almost immediately passé. Adding more pain to the process, the imitators have become so good at knocking off originals that many consumers don’t even seem to care if they have the genuine article or not.

With an increasing number of outlets for product—also due to the internet, which has a comparatively low barrier to entry—companies can quickly react to new products and, in the case of low-cost copiers or rip-off artists, can undercut and under price new, hoped-for best sellers. Of course, copying best sellers is nothing new, but the speed with which it’s occurring is startling. Add in a lingering recession of a magnitude unseen since the Great Depression and price becomes even more of a determining factor in choosing product, as we have seen more and more retailers scurrying to lower pricing even on the better floors.

In-store retailers have always been slow in adapting to new technology. Take most retailers’ failure to embrace CRM and database marketing as a means of communicating with and offering better targeted products to their customers as an example. But attempting to push an outworn 19th century business model into the 21st century will for most retailers simply be a prescription for bankruptcy.

Collaboration: The New Wave of Retailing

Internal, collaborative teams and external collaboration with customers will become one of the hallmarks of the New Wave of Retailing. Collaborative organizations, which are different from team-based organizations because they implement the collaborative process systemically, allow for greater adaptability in implementing and reacting to change, greater flexibility in product development, and greater empowerment among all members of the organization in the decision-making process.

At SA VA, collaboration is being embraced from the outset and is affecting everything from Design to corporate culture and organization. The SA VA Design Teams, for example, work with customer input and consist of members from technical and creative, sewing and tailoring, sourcing, marketing, and customer service. As a customer-centric organization, where information from customer input, the customer database, market research, and analytics, the Customer Experience Group receives data from, responds to, and feeds all aspects of the organization. It occupies a central, through not necessarily an authoritative position within the company.

As horizontal, collaborative systems replace vertical, rigid, command-and-control organizations as the preferred method of business organization, it will become increasingly necessary to find individuals who are comfortable working and learning in non-hierarchical groups. The acid test will be if past experience on the part of retail management can flourish in this new wave of retailing.

(Women's Wear Daily just published an article on retailers struggling to meet new consumer needs. Here is the link: WWD. Unfortunately, WWD subscribes to a paid subscription format, which seems out of place in the world of open communication.)

More on design and merchandising

In mid ‘80’s, when I was editor of Catalog Age magazine (now Multichannel Merchant), I published an account of talk given by Susan Love Edmondson on “me-too merchandising” at the Chicago Association of Direct Marketing annual meeting.
At the time Susie Love was General Manager, Avon Direct Marketing, although she had gained fame for co-founding and merchandising the highly successful, yet ultimately ill-fated Kaleidoscope catalog.

Kaleidoscope, along with Roger Horchow’s The Horchow Collection, broke new grounds in cataloging by developing specialty home catalogs geared to upscale women. These catalogs were fresh, beautifully designed and photographed, and offered expensive, hard-to-find luxurious products—quite a change from the L.L. Bean, the old Spiegel, Montgomery Ward and Sears catalogs that had, at the time, dominated the marketplace. Hard to imagine that time since specialty catalogs now rule the mailboxes.

The Horchow Collection is still around. Kaleidoscope, in one of the first big-media hypes in direct marketing, went into Chapter 11 and eventually out of business. Kaleidoscope scored a remarkable string of firsts—including selling hot air balloons on the cover (all sales had to be nullified because of government regulations) and introducing the Galileo clock which still finds itself on the pages of many catalogs.

In her remarks, Susie—now Dr. Love, a specialist in adoption issues in the Bay Area—observed:

Merchandising is the whole package, not just the selection of items. It’s identifying a target consumer group and providing the most highly edited, best value products to serve the needs and desires of that population. And it’s packaging your sales offer in such a way that it’s easily identifiable as you.

Choice, she went on to explain, “must always be made in terms of identity.” By choice, she meant product choice and catalog presentation, but she could well have applied it to design, product development, visual display, and store design.
From the late ‘80’s until the present, we have seen nothing but “me-too” retailing, in spite of the volumes of books, articles, and presentations made about branding. It’s been difficult for quite some time to tell which catalog you saw that item in because so many catalogs offer nearly the same items. Stores with white walls, blonde wood and metal/glass fixtures are so commonplace that you can’t tell a J.Crew from a Banana Republic (remember the original from Pat and Mel Ziegler?) or a Gap from a Benetton.

All of this brings me to Cathy Horyn’s recent remarks in the New York Times about the opening of Topshop—London’s recent import to the US:

The Topshop folks get almost everything right. The atmosphere is fun and exciting (it makes minimalist Uniqlo up the street look anemic). Although the range of merchandise is quite broad, from adorable blouses and cool fleece pants to Kate Moss’s very cute line, you feel there’s a reason for everything—that the Topshop designers and merchandisers said no more than they said yes. And the prices are great, from high to low. I saw at least a dozen things I wanted to buy, most of them for under $150. What’s more, I liked being in the store—and when has anyone said that lately?

Merchandising & Design: New vs. Old

It might be said that truly great merchandisers—maybe even designers—buy or create for themselves. Whether or not that is true, all great merchandisers and designers I have met have a very concrete idea of their customers. Mostly, in the past, they have derived this concept of their ideal customer from their very rich imaginations, acute observation of society, intuitive understanding about art and culture, and a general feel for the Zeitgeist. When all of this comes together, they express their creativity by discovering the next got-to-have-it handbag or knowing that lime green is this season’s accent color or putting their design sensibility to work creating the newest, perfect little black cocktail dress.

Regardless of how much data is now being poured into the design and buying process, how much neuroscience is playing a part in probing the brains of consumers, the simple fact remains that merchandising and design remain more art than science. But how this creativity is applied makes all the difference: Do you as a designer seek to impart your vision to your customers? Or do you seek to meet your customers’ needs and wants in an attempt to fuse your design sensibility with your customers’? The former attitude involves a creative projection onto the world; the latter point of view suggests collaboration or, perhaps more cynically, meeting the market demands of your customer demography.

Having spent a large part of my career writing about and consulting in multichannel marketing, I have observed some of the country’s most savvy and successful merchandisers. To a person, every merchandiser has a highly developed sense of the customer they buy or design for. She has a name, a look, a family. They know what car she drives, what she does for a living. Where she lives, the colors she loves, the schools she went to. They know her hobbies, her frailties. How much money she’s likely to spend on clothing, on her home, on her children. She has become a video clip embedded into the merchandiser’s brain. In the catalog world, some of the best known merchandisers out of this school are Roger Horchow, Lillian Vernon, and Chuck Williams, to name a very few.

Merchandisers in the catalog world, unlike in-store retail, had the opportunity to develop well-defined points of view, find the products that expressed them, and, then, seek out the customers who wanted to share that vision through trial-and-error mailings. In-store retailers, although they might have had an equally well-articulated aesthetic, needed to advertise to find enough local customers who found their merchandise assortment appealing to drive them into the store. As a result, their vision needed to be broader to hit the numbers that would result in enough traffic to make sales.

The internet has changed the game. At its best, the internet brings one to many, many to one—your voice, vision or products can be heard, viewed or bought by the world, whether you reside in Kansas City or Katmandu. The internet allows merchandisers to find highly specific niche markets or to provide more mass appeal products—the former resulting in the SEM game; the latter a battle for customers through discounting.

For designers, in the new world of instant verbal and visual communications via internet and digital photography, the prospect of creating new products and getting them to market before a competitor has become daunting. Even couturiers can hardly keep a collection together during a season. Just hours after a collection debuts on the runway, manufacturers have already copied the best, which, in some cases, might even appear in a store in just over a week. The result: the consumer gets the “look” at a fraction of the price, but the “look” is already passé. It’s far worse than the decline in price of a new car when it’s driven off the lot.

With an increasing number of outlets for product—also due to the internet, which has a comparatively low barrier to entry—companies can quickly react to new products and, in the case of low-cost copiers or rip-off artists, can undercut and under price new, hoped-for best sellers. Of course, copying best sellers is nothing new, but the speed with which it’s occurring is startling.

Designers now are producing far more than Fall/Winter and Spring/Summer Collections. Pre-Resort, Resort, Spring, Autumn—whatever—Collections abound, and most designers can hardly afford to design and turn around a full new line in these short time frames—let alone create an inspired, compelling line that women want to have.

Rather than simply imparting your vision or catering to a particular demographic, there is a new approach to design and merchandising, let’s call it the wiki approach—one that works collaboratively not just with the Design Team but with the customer herself.

A new dress doesn’t get you anywhere

“I mean, a new dress doesn’t get you anywhere. It’s the life you’re living in the dress, and the sort of life you had lived before, and what you will do in it later.” D.V, pp. 147-8.

That observation—provided by the indisputable maven of fashion—Diana Vreeland (1903-1989)—in her chatty, wonderfully rambling book D.V., first published in 1984, has provided a kind of touchstone for SA VA. Sarah Van Aken, founder, head designer and chief community organizer, believes that fashion design for her provides a platform for communicating and promoting ideas about the world community, particularly as they relate to early childhood.

We at SA VA have used this dictum to validate our sensibility about fashion—that fashion is more about the women wearing it than about the designer or the dress. That means, we “want to fuse our design sensibility with [our customers’] sense of style,” as well as provide a platform for developing shared ideas. In other words, we are more interested in engaging in an on-going dialog with our customers about what matters to them most, as well as about their fashion sense, than we are seeking to impose our sense of style.

To be sure, SA VA has a decided pointed view and a wonderfully quirky and irresistible design sensibility. But our customers also know what they are looking for and how they want to express their individuality.

How we’ve used this point of view to create SA VA will be the subject of forthcoming blogs.

Introducing my client SA VA

After a considerable hiatus, I am returning to blogging on a more or less regular basis. I will still comment on retailing, but will also discuss some of the exciting things we are doing at SA VA, a women’s designer apparel brand, store and website that will open in August. Although I have been involved with S.V.A. Holdings for well over a year, we began formal branding in November 2008. Our efforts continue. We are now finishing up our belief statements about our customers, our products, and our business principles (more of that later).

As a way of introducing you to SA VA, I am including the email remarks of Sarah Van Aken, SA VA CEO and Community Organizer, made to Jeff Jarvis, author of What would Google Do? (see his blog at www.buzzmachine.com), who kindly reprinted them in his blog:

I just finished reading your book and I wanted to thank you for writing it! It validated a new direction I am taking with my company. I own a semi-vertical private label apparel company based in Philadelphia. I have three clothing brands, which I have been manufacturing for in a proprietary garment factory in Bangladesh. As I began planning the expansion of my 3rd brand SA VA, I struggled with its purpose and direction and knew that it wasn’t just about making clothes for me. As we started rebranding, the economic crisis hit and without a doubt I knew things in the apparel business would never be the same again.

Since that time I have made some great steps including moving my manufacturing here to Philadelphia with help from the City to create living wage jobs, partnering with the People’s Emergency Center (PEC-cares.org) in various ways (volunteerism, mentoring, food drives), and making my clothing line about the people who wear it, not about a designer.

In doing so, I have decided to simultaneously launch an interactive shopping site where along with purchasing our clothes, customers can send us drawings, tear sheets and ideas of what they are looking for and can’t find (because of my manufacturing control I can turn around goods in 6-10 weeks from concept), show us how they wore garments they purchased from us, access volunteer opportunities (without a huge ongoing commitment) at PEC, and more. We hope to create not just a place where people can buy clothes that are local-made, fair-trade, made in the US, often organic or recycled (and every garment in the store has a paper tag with a check list of all of these things that apply), but they can interact and connect with their community and give back. Our design studio is right inside the store. We are doing video blog profiles of our employees (everyone from janitor to designer to production staff) that will be shown on the website and in the store. As we grow, this Philadelphia garment facility will supply regional stores but as we move across the country there will be garment center for each region creating the same kind of community experience and job creation in the area where we sell our clothes.

So, my point being that from your book it reinforced and grew the ideas that I had about what I wanted to make my business look like and the direction I was taking. We launch the store and web store in late August. In the meantime – I started blogging too!!!! Shop.savafashion.com/wordpress.