2018 Fashion: We Drop “Plus Size” And Evolve Past The Retail Apocalypse
by Elizabeth Segran
Brick-and-mortar stores make a comeback, clothing gets recycled, and direct-to-consumer labels take on the big brands in our 2018 fashion crystal ball.
Forecasting in the fashion industry can be tricky. There are momentous changes taking place, so the tides can turn quickly, rendering my predictions obsolete. Last year, for instance, I predicted that brick-and-mortar stores would take a beating. I was both right and wrong.
A record-breaking 6,700 stores shuttered across the country, with chains like Macy’s, Sears, J.C. Penney, and Kmart closing hundreds of locations. Payless Shoe Source, Gymboree, RadioShack, Rue 21, Wet Seal, and American Apparel were also victims of the so-called “retail apocalypse,” each either filing for bankruptcy or massively restructuring due to poor sales.
However, what slowly became clear as 2017 unfolded was that the end may have been somewhat exaggerated. Retail instead appears to be going through excruciating growing pains, much like an awkward teenager trying to figure out his identity in a complex world.
“Brick and mortar isn’t dead,” says Marshal Cohen, retail analyst at NPD Group. “That’s a big misconception. It’s just going through a major evolution.”
As I think through my predictions for 2018, this idea of “evolution” keeps coming to mind. There are many great ideas that emerged over the last few years that are on the cusp of coming to fruition. Over the next year, I see major progress happening in the plus-size market, the world of direct-to-consumer startups, and sustainability. Here’s what I see in the cards.
We Kill “Plus Size”
Alexandra Waldman, founder of Universal Standard, which serves women size 10 to 28, often gets asked about the future of the plus-size market. “If we are still talking about a plus-size market 10 years from now, we will have failed,” Waldman says. “Our goal is to make sure that term doesn’t exist anymore.”
In 2017, there was a growing awareness about how poorly the fashion industry has responded to the needs of plus-size women, who constitute a full 68% of the market. Plus-size fashion models like Ashley Graham spoke up about inclusivity, designers like Christian Siriano and Michael Kors added plus-size clothes to their collections, and brands like Universal Standard, Project Gravitas, and Eloquii made a splash in the market with high-end, well-made clothes in a wide range of sizes.
The industry still tends to treat plus-size women as a separate category from “straight-size” women, who are under a size 14. When women go shopping at a department store, for instance, plus-size women are often forced to shop in a separate section of the floor from their straight-size friends. Brands are increasingly drawing awareness to the absurdity of this. Good American, a size-inclusive denim brand cofounded by Khloe Kardashian and Emma Grede, has put pressure on retailers that carry their products to ensure that all sizes are in the same place. “This is part of a broader cultural change,” Grede explains. “Our very notion of what makes a beautiful, sexy body is changing. We want to be part of this change.”
Brick And Mortar Makes A Comeback
Contrary to widely held belief, consumers are eager to get off their couches, close their laptops, and interact with real people in the real world. Even though digital brands have been gaining market share, customers still only make 16% of their fashion purchases online, according to analyst Marshal Cohen.
Over the last year, we’ve seen that brands that use stores to foster connection and build community can win customers over. Many companies that began online, like Allbirds, Bonobos, Warby Parker, Cuyana, and, just this month, Everlane, have built stores that offer rich, immersive experiences. They’re a far cry from traditional mall brands with bad lighting and endless racks of clothing. Women’s workwear brand MM.Lafleur, for instance, has opened showrooms called “Out of Office” where customers can make appointments with a personal stylist. “It’s a bit counterintuitive, but many customers find shopping in our showrooms the most efficient and productive way to shop–even more so than shopping online,” says Tory Hoen, creative director of brand. “Because we don’t hold inventory on the floor, they don’t waste time browsing–and we don’t waste time on retail space we don’t need. It’s more personalized for the customer, and it’s more efficient for us.”
Startups are throwing out the old rule books about what a store should be and are having fun experimenting with innovative approaches. Take M.Gemi, which sells Italian-made shoes. The brand launched as a digital play, but has now opened fun showrooms, many with fully stocked bars. Over the summer, the brand took a truck loaded with ice cream and shoes to beach locations on the eastern seaboard to introduce the brand to new people. What we’re discovering now is that these physical locations tend to boost online sales and create more loyal customers. M.Gemi clients who make a purchase in-store tend to buy another pair of shoes a week and a half faster than digital-only customers. They also return products 30% less, since they’ve been properly fitted. Customers that have shopped online end up spending 33% more when they visit a store, and spend 14% more online after an in-person visit.
Direct-To-Consumer Sector Scales
A few years ago, fashion brands measured their success by how much VC funding they received. As I pointed out in a recent story about the fate of Bonobos and Nasty Gal, this money did not translate into massive growth. But over the last few years, we’ve seen many startups take on far less capital, but grow sustainably and achieve scale. Kevin Lavelle, founder and CEO of menswear brand Mizzen+Main, believes the fate of some of these earlier brands has prompted brands like his to be more conservative and selective about who they take on as investment partners. “We have seen what happens when companies expand too quickly, and ultimately become cautionary tales of what happens when you bite off more than you can chew,” he says. “What made DNVB (digitally native vertical brands) successful five years ago no longer works. Indeed, even for some of them, it was not effective at scale.”
Direct to consumer watch brand MVMT was founded only four years ago and has scaled without taking any investment at all. They have sold over 1 million watches in more than 160 countries, and are set to make $80 million in revenue this year, the brand says. According to Jake Kassen, cofounder and CEO, this involves carefully weighing the pros and cons of each new opportunity to grow, like investing in a pop-up shop rather than a store, or collaborating with other like-minded brands to tap into their customer bases.
Newer digitally native brands can learn from what the first generation of brands–like Warby Parker and Everlane–did. “While these opportunities cost money, I think brands now have the tools to make smarter decisions about the spend on these opportunities and weigh direct ROI,” he says.
This upcoming year, I predict that this flock of direct-to-consumer brands will begin to directly compete with fashion industry incumbents, like Gap Inc., L Brands (which owns Victoria’s Secret), Ralph Lauren, Fast Retailing (which owns Theory and Uniqlo), and Coach.
Younger brands that first emerged on the internet have some advantages over these large conglomerates that have been around for decades. “The digital world allows us to be nimble,” says Sarah LaFleur, founder and CEO of MM.Lafleur. “If a marketing message or image doesn’t resonate, we can turn on a dime. We’re constantly improving based on our learnings, we move fast, and we’re flexible. That’s not true of all fashion brands.”
We Make Fashion Circular
Thanks to the rise of fast fashion, many consumers see clothing as disposable. You pick up a cheap, super trendy outfit from H&M or Zara, wear it for a couple of weeks, then either throw it away or donate it, where it will probably end up in a landfill. The fact that we cannot properly recycle clothing is one of the reasons that the fashion industry has developed a reputation for being among the worst polluters in the world–second only to the oil industry, according to some accounts.
Scientists around the world are trying to find a way to change this by developing ways to recycle fabric. We’re already seeing some examples of this in the market. It is now possible to take 100% cashmere sweaters and blankets, shred them, and re-spin them into yarn to make quality, brand-new products that are just as cozy. Patagonia, Eileen Fisher, and Stella McCartney are already using regenerated cashmere in their collections.
However, when you look at the wider industry, things become a bit more complicated. Most modern fabrics are blends of synthetic and organic fibers, like cotton with a spandex layer, or wool with polyester. Startups like the Renewal Workshop and Eileen Fisher’s Tiny Factory are trying to find creative solutions to this problem, but there haven’t been any major breakthroughs yet, and certainly none that can be scaled across the industry. I’m hoping that 2018 is the year that we figure this one out.