3 Ways Growing Fashion Brands Outsmart Larger Competitors in the Digital Age


Luxury’s tendency towards consolidation is evident. Right before the pandemic, for example, LVMH made one of its greatest acquisitions to date, acquiring Tiffany & Co. in 2019 for $16.2 billion. Through the epidemic, we continued to see luxury companies merge.

Fashion analysts perceive luxury fashion’s continuous consolidation as measures to expedite digitization initiatives in the premium domain. In November 2020, one of the most important consolidations for digitalization initiatives featured Farfetch, Alibaba, and Richemont, which forged a global cooperation in their quest to “integrate the digital and physical realms.” Indeed, according to the McKinsey 2021 State of Fashion research, “Fashion executives see digital as the biggest opportunity by far for 2021, with 70 percent of executives expecting growth of more than 20 percent in their e-commerce channels.” Thus, with the industry’s efforts to consolidate for digital’s sake, it has become evident that luxury regards digitization as the key to prosperity in the next phase of industrial expansion.

And it may seem that conglomerates like LVMH accelerate their digital advantages through consolidation because it reportedly allows each brand within the conglomerate more power in all marketplaces. Since a conglomerate’s portfolio affords its brands infinite access to talent acquisition, marketing expenditure, retail presence, and supply chain, conglomerates may appear to survive swift industry changes. However, the sheer largeness of conglomerates may prove insurmountable. According to Elsa Berry, founder of luxury M&A consultancy firm Vendôme Global Partners, “The world has become incredibly complicated… [and conglomerates] are going to get too big,” she added. Therefore, given the luxury sphere’s complex transformations, especially during this moment when firms are rushing to digitise, how can smaller brands consistently fight against fashion conglomerates?

Push the Pre-Orders

Pre-orders allow customers to place orders for items that are out of stock or haven’t released yet. Customers who put pre-orders for items they want to buy online might be charged for their purchases either when the order is placed or when the item is shipped.

Established brands can benefit from pre-orders by experimenting, confirming their assumptions, and amassing important demand for their upcoming releases. Pre-orders are a great way for up-and-coming designers to reduce the financial risk associated with creating their items. Pre-orders contribute to the funding of manufacturing costs prior to the release date, which is helpful for growing fashion firms who operate on smaller budgets. Pre-orders provide a savvy alternative funding option to manufacturing costs that can be used instead of making a presentation to fashion investors.

Pre-orders have the additional benefit of bringing supply and demand into equilibrium. This allows designers to avoid having an excessive amount of inventory on hand while simultaneously allowing them to collect relevant data that can be used to establish sales projections for future collections. When deciding whether or not to permit pre-orders, one thing that must be taken into consideration is the chance that buyers may change their minds about their purchases or send them back. In order to avoid these problems, you should supply your consumers with essential information concerning their pre-orders. This should include thorough product descriptions, high-quality images, and frequent updates regarding the status of their manufacture and shipment.

When it comes to the manufacturing aspect of pre-orders, collaborate with manufacturers who are willing to accept lower minimum order numbers (MOQ). You will have the freedom you need to tailor your supply to the demands of your customers and manufacture collections in small batches when necessary if the minimum order quantity (MOQ) is lowered. Some of the best manufacturers don’t even have a minimum order requirement because they focus on making high-quality fashion items rather than large quantities of low-quality wholesale goods. This allows them to provide their wares without any restrictions.

Make Your Fashion Items Unique Through Personalization

Why are large fashion firms unable to compete with their smaller rivals when it comes to personalisation, despite their best efforts? Because customers, particularly those in the premium market, have seen major transformations in the years following the pandemic. The new luxury customer has high expectations and comprehensive product knowledge, both of which, according to fashion industry experts, will only continue to expand as we go into the subsequent phase of industry expansion.

39 percent of customers believe that luxury companies lag behind smaller high-street fashion labels in the digital and e-commerce realm, according to a survey that was carried out by Klarna, the top worldwide payments and purchasing service. And a portion of this lag can be linked to a barrier that only huge fashion conglomerates face, which is the question of how a large fashion company can creatively give a personalised experience to consumers on a massive scale. This type of customization, which Nike refers to as the “one to one” experience, used to be available to only the most affluent clients of a certain business. However, as of right now, “fashion brands must make every customer’s experience feel more unique through a mix of artificial intelligence, human recommendations, and direct contact with salespeople using client communication apps and customer relationship management tools,” according to McKinsey. “This can only be accomplished by combining artificial intelligence with direct contact with salespeople using client relationship management tools.” In order to implement mass personalisation on a large scale, major fashion brands need to deliberately integrate various forms of technology as well as creative executions that appear genuine to customers. On the other hand, when it comes to providing a higher level of customization to their clients, smaller firms outperform larger brands for two reasons:

1.Smaller brands have the flexibility to quickly respond to the needs of their customers. – When it comes to designing products that are relevant to cultural movements, smaller firms are able to respond more quickly to shifting client sentiments. According to McKinsey, as a result of the fact that smaller brands generate these answers on a smaller scale, they give the impression of being more genuine and organic to savvy customers who are “more attuned to misleading marketing.”

2.In the realm of digital communication, smaller firms tend to foster more “human” connection. – According to a survey by McKinsey, the e-commerce sector achieved growth equivalent to that of six years in just eight months during the epidemic, and this momentum is only projected to pick up speed going forward. McKinsey places an emphasis on creating the kind of “natural, chummy” atmosphere that customers want in order to be successful in the digital arena. They want to have the feeling that they are connected in some way to the brand’s overall vision and social goal. For instance, the modest but formidable brand Nomasei is committed to reducing the amount of carbon imprint it leaves behind. The company works only with local Tuscan manufacturers at every stage of the production process, which helps them achieve their goal of promoting sustainability through the localization of their manufacturing process. This environmentally friendly production process, as well as the successful ways in which Nomasei incorporates its consumers in its vision for a sustainable future, highlights how smaller firms may successfully customise the digital purchasing experience for consumers.

Culture of the Foster Family System

According to research conducted by McKinsey, consumers and workers are putting pressure on fashion firms to develop a culture that is “more family- and culture-driven and less corporate.” It is not enough for brands to provide customers with a personalised shopping experience that is connected to a social mission. In addition, it is necessary for firms to represent their social values internally, as customers are increasingly demanding accountability from brands. They are more engaged and more informed than ever before, and they can easily find the information they need to support brands that align with their values and abandon those who don’t. “They are choosing to vote with their wallets,” says Alison Bringé, CMO at Launchmetrics. “They are able to easily find the information they need to support brands that align with their values and can easily find it.” For instance, the Instagram movement #PullUpOrShutUp was started in June of 2020, and it compelled over two hundred businesses, such as Estée Lauder Companies, Glossier, and Levi’s, to publicly report the number of black employees they had at the time, as well as to make commitments toward increased diversity and inclusivity in the workplace.

In order for fashion brands to successfully cultivate family culture, they need to do it across all touchpoints. One of the most important touchpoints for companies is the partnerships they have with manufacturers. If a company chooses to build a family culture, it should cultivate strategic partnerships with smaller, family-owned firms rather than huge industrial sites that are more likely to mistreat workers. This will satisfy the demands of both consumers and employees. Smaller brands can demonstrate to their customers that they care about their employees and establish greater loyalty and trust with them by publicly working with family-owned factories. This helps the companies show how much they value their employees.

Projections Made After the Pandemic

In the next phase of expansion for the fashion industry, smaller firms will need to compete against larger conglomerates by capitalising on their competitive advantages, such as pre-orders, customisation, and the promotion of family. Because successful smaller firms place a greater emphasis on listening to their customers and responding in intelligent ways, this shift has encouraged brands of all sizes to be more inventive. Especially in the aftermath of the epidemic, it will be extremely important for companies to observe the innovative ways in which brands respond to the demands of their customers in this digital age.


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