The real revolution is in the mind — not the store or the online shopping cart.
And the mind game is raging.
The movers and shakers in fashion’s new landscape — from American Giant and Supreme to Stitch Fix and Warby Parker — aren’t just using a new distribution model; channel or anchoring their businesses with a Made in the USA mantra, philanthropic hook or a kick from AI.
Founders today are thinking differently, or perhaps listening with new urgency, and that is leading them to new places. Product and experience are the new (or reinvigorated) mantras, and everything that doesn’t go toward making the goods better and easier to buy is being kicked to the curb. And when the executive brain trust isn’t enough, leaders are reaching out to their broader workforce and to consumers for fresh ideas on how to remake tomorrow.
While the same-same approach to retail has led numerous companies to a downward spiral at the mall, many approaches are being rewarded or recognized in one way or another.
• James Jebbia’s singular mix of celebrity, scarcity, luxury and skate authenticity led Carlyle to invest in Supreme, giving it a $1 billion valuation.
To keep up, new businesses are going to have to keep moving. Consumers remain exceedingly capricious, shopping for new things, in new ways with new tools, moving fluidly with the ebb and flow of technological change.
Cutting-edge merchants are reinventing and reinventing again, trying to remove all that’s unnecessary in their businesses while doubling down on efforts to improve on, well, everything to grab market share.
It’s not an easy process.
And with little history to fall back on, it’s the strength of this thinking that will ultimately determine if small but growing businesses own the future or get washed away by it.
Many of the newer names seem to have studied at the school of Steve Jobs and Jeff Bezos. They take from Jobs the maniacal focus on product that helped bring the Apple Mac into being, followed by the iPod and the iPhone X, and from Bezos, Amazon’s zeal for making the customer experience easier.
Neil Blumenthal, cofounder and co-ceo of Warby Parker, said: “We don’t wake up and tell ourselves we’re going to think better, but we do tell ourselves that we’re going to do better. And that desire to do better, to make every aspect of Warby Parker today better than it was yesterday, leads to us revisiting assumptions, leads to us understanding our customer pain points, leads us to understand as a team: Can we function better, more productively? We’re living at a time that change is happening at a faster pace than ever before.”
Much has been made of Warby Parker’s disruption of the eyewear market, cutting out the middleman and going directly from production to consumer. But less appreciated has been the company’s willingness to change (or its ability to keep rolling with the punches).
Just eight years old, Warby Parker shifted between desktop e-commerce, mobile, social selling and physical retail. And it seeks to keep moving, paying attention to the budding potential of voice commerce and other advancements.
“I look at some of these great American fashion brands and great American retailers and I look at what changes have they made over the last decade and it’s remarkable how little change has happened, to their product, to the way in which they sell it,” Blumenthal said.
Big companies seem to identify key changes in the market and then seek to make a big corresponding move to change with it, said Blumenthal, noting that Warby Parker is constantly testing and tweaking and learning so it doesn’t need to make “monumental pivots.”
Regardless, change is needed — and badly, whether it comes by tiny steps or big leaps.
Nancy Koehn, a historian at Harvard Business School who has closely studied retail and consumer brands, said merchants are living through an upheaval that’s not unlike the early 20th century when better roads and postal service fueled catalogue companies such as Sears, Roebuck & Co. and Montgomery Ward or the Fifties, when the interstate highway system led to the rise of shopping centers.
With each turn of that wheel there was a structural change in distribution that lit new fires in consumers, sending merchants rushing to meet the need.
Today, that need often is being met with a mashup of previous solutions, recycling the best retail genres from years gone by. “People will say, ‘Hey, we could do Amazon meets Sephora meets J. Crew…their ideas are partially conditioned around how you tweak and integrate existing retail concepts,” Koehn said.
This remixing is an effort to take ideas that have worked in the past and to use them in new ways, hopefully getting closer and closer to what shoppers want and need.
“The consumer is actually really changing and I don’t mean changing in psychographic ways,” Koehn said, noting the process that took shoppers from need to purchase has been reordered. “The logic of acquisition, the logic of conversion and fulfillment is changing every single season for consumers. The sense of possibility and empowerment keeps growing.”
That means everything can change every six months.
But how can a company keep up with that rush of newness when management teams have only so much brainpower and also have to keep the lights on, fulfill the next order and come up with the next design?
While Jobs and Bezos are guiding lights, the new approach is to reach out and tap broader mental resources. In this sense, the new thinking might not be thinking at all, but a mind-set that allows executives to listen to consumers and immediately turn around and react, adjusting their businesses to match with what they’ve heard or what they think they’ve heard.
J.B. Osborne, cofounder and ceo of Red Antler, which helps launch and grow businesses, said founders today are starting off listening, asking, “What do customers want? And hearing where there’s opportunity and then building something that evolves from that.”
Osborne maintains that a strict focus on what customers need and want is “novel” in apparel.
“I don’t think fashion was always driven by, ‘what does someone need?’” he said. “It was more about, ‘What is my vision for this season’s collection?’ It was more about designers and brands taking a leap and trying to predict the future and ultimately designing product, producing it, delivering it and waiting a year to figure out if it’s right.”
The system that used to shuttle brands from obscurity to spotlight — from a favorable editorial mention to a key order from a luxe department store — doesn’t work like it used to.
“Today, the reality is you have to make your break, you have to create your own opportunity,” Osborne said.
Opportunities are coming from a better understanding of the who, what, where, when and why of shopping, with an obsession on process coming to the fore at many of the companies remaking the industry.
“They’ve spent a disproportionate amount of time understanding why a customer shops the way they are and how they wish to shop and have crafted a business around that,” said Amy Jain, cofounder and ceo of jewelry disrupter BaubleBar. “I know that sounds really simplistic, but a lot of people don’t approach businesses that way.”
Jain said BaubleBar, which she founded with Daniella Yacobovsky in 2010 to rework what a jewelry company looks like, was started “with no guardrails” on where it could go.
And without guide rails, one can end up anywhere.
“We literally had no idea what we were doing now that we look back,” Jain said. “We didn’t know what merchandising was, we didn’t know what pricing strategy was — you put two hardworking people out in the wild and say, ‘Come up with a way to sell jewelry better.’ You see these retailers today that know they want to change and know how they want to change, but they can’t because of the institution or the cultural mindset. We had nothing holding us back, we had no anchors.”
Jain seeks to make the same hold up and down the ranks at BaubleBar.
“I want the most junior person on our customer experience team to feel comfortable sharing new ideas, but also give her a forum to do so, to know that that is part of her scope, encouraging everyone to think about what’s next,” Jain said.
Ceo’s are listening to everyone — their cofounders, their junior assistants, their customers.
And in many cases, the opportunity is connecting the top of the corporate organization chart with the smallest of details, creating one unified vision of what is good about a brand.
“When Steve Jobs was doing the retail store, he was selecting the marble, the handles and the wood and the design and the glass and it was intensely personal,” said Michael Dart, partner at consultancy A.T. Kearney and author of “Retail’s Seismic Shift: How to Shift Faster, Respond Better and Win Customer Loyalty.”
“How many ceo’s are doing that in these major established retailers?” Dart said. “Very few of them are really infused in, ‘This is a better way to shop and I’m going to make sure it happens and I’m working that day in and day out,’ versus, ‘I’m managing the asset, I’m a captain on the bridge and I hope everything’s going well in the kitchen.’
“There’s nothing more important for ceo’s to think about than, ‘How do we innovate on that product and how do we innovate on that experience for the customer?’” Dart said. “Too often that is how many layers down an organization?”
Drawing together these threads — a from-the-top attention to detail, an obsession with product and an itch to make the buying process easier — is American Giant.
Founder and ceo Bayard Winthrop sweats every detail as he seeks to revive the glory days of better Made in the USA basics with sturdy zippers, elbow patches and easy returns.
Winthrop said he thinks all the time about Amazon and its “relentless pursuit of trying to deliver” on its core promise. Translating that to American Giant, he said he seeks to “invest in anything that adds value to the customer, strip away everything else.” That has the company focused on manufacturing and keeping its capital structure close so outside investors can’t start pushing for growth before its time.
“You’ve really got to build these durable brands,” Winthrop said. “When you get going, you can invest in a couple places. You can invest in marketing or customer acquisition or you can say, ‘No, we’re going to invest in really putting a new type of product into the market.’
“Great brands go through big technological, big industry changes and they thrive,” he said. “These big moments do open up opportunity to reframe and rethink challenges and unlock opportunities.”
The opportunity is there. The question is: Who can make the future work for them? And the day is drawing nearer when the next generation will have to put up or shut up.
“It’s kind of like the new ‘gluten free.’ Everyone’s doing it — and there’s a lot of capital available to fund these start-ups,” said Millard “Mickey” Drexler, chairman of J. Crew Group Inc. Drexler has a foot in the old and new worlds, having led Gap Inc. and J. Crew as ceo, created the modern Madewell and advised Warby Parker and activewear newcomer Outdoor Voices.
“However, the real ‘Judgment Day’ will come — and this is important because everyone is enamored with start-ups. While there are a lot of great ideas out there, how many will be able to show profitability in a meaningful way?” Drexler said.
That is key, since many of the next gen of fashion and retail firms have yet to show consistent profitability. Even Amazon, as disruptive as it continues to be, still sees more profits from its cloud computing services than it does from its e-commerce operation.
So the question is not only when will the next generation become profitable, but how will they do it?
The answer, at least for now, seems to be to change retail itself and keep moving forward until it works — for consumers and merchants.