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.