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ICYMI: LVMH confirms Rihanna label, a business climate emergency, streetwear drives hardware innovation

A round-up of everything you might have missed in relevant fashion, retail and tech industry news over the past week.

TOP STORIES
  • Rihanna and LVMH confirm fashion label [BoF]
  • Businesses should declare their own climate emergency. Here’s how [Wired]
  • How streetwear is driving innovation in hardware [Hypebeast]         
  • Inside the world of liquidated Amazon merchandise [Forbes]    
TECHNOLOGY
SUSTAINABILITY & PURPOSE
  • Start-ups hoping to fight climate change struggle as other tech firms cash in [NYT]
  • Why the new Harrods charity shop is an ode to sustainable fashion [Euronews]
  • Going zero waste is a lot of work. Most of it is falling to women. [Vox]
RETAIl & E-COMMERCE
  • Nordstrom’s NYC flagship merges open space with hidden tech [Vogue Business]
  • Farfetch signals growing ambitions in resale [BoF]
  • Crocs opens interactive concept store in London [Fashion United]
MARKETING & SOCIAL MEDIA
  • Net-a-porter Rethinks Content and Video, Shrinks Porter Magazine [WWD]
  • Instagram launches its own e-commerce account [Fashion United]
PRODUCT
  • Sneakers, small accessories and Off-White rule as latest Lyst Index is released [Fashion Network]
  • Kylie Jenner announces skin-care brand on Instagram [WWD]
  • H&M links with Netflix for Stranger Things collection [Fashion Network]
BUSINESS
  • Kering’s shopping list should include these brands [BoF]
  • Handbag industry nervously awaits Trump’s tariff decision [WWD]
  • New York’s Fashion Week scaled back to five days [Fashion United]
  • London designer Sophie Hulme to close business, citing health reasons [WWD]
  • The clothing rental market’s broadening appeal [BoF]
CULTURE
  • Nike told me to dream crazy, until I wanted a baby [NYT]

How are you thinking about innovation? We’re all about finding you the perfect partners to do so. Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more. 

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e-commerce Editor's pick Retail sustainability

3 ways brands are experimenting with the resale market

From partnering with resale websites to facilitating consignment selling, brands are increasingly exploring ways to be more involved with their products as they continue through their lifecycles.

Part exercise in brand control and part push for more sustainable consumer habits, the move is of course also an enormous opportunity for extended revenue streams.

The secondhand market is projected to double in value over the next five years, skyrocketing from $24bn to $51bn, according to a report from resale site, thredUP.

We’re also seeing heavy investment in the resale space as a result. Foot Locker just put in $100m into GOAT, while Farfetch recently acquired Stadium Goods for $250 million. There’s also a round of funding coming up for sneaker marketplace StockX, which will turn the company into the first sneaker reseller valued at $1bn, according to Recode.

Here are three ways brands are otherwise experimenting with and promoting the resale market:

1. PARTNERING WITH RESALE WEBSITES

Starting this April, & Other Stories started selling pre-owned garments. The project was created in partnership with second-hand platform Sellpy, which manages and operates its sales. When clicking on the new “pre-loved” section on the & Other Stories’ website, clients are redirected to sellpy.se. For now, the service is only available in Sweden.

“We’re exploring different ideas on how our long-lasting designs can find their way to new owners. With that in mind, we decided to do a small second-hand test project with Sellpy,” explained Sanna Lindberg, managing director of & Other Stories.

Stella McCartney made history last year as the first luxury brand to promote the consignment of its products on The RealReal. Anyone selling Stella McCartney products on the platform receives a $100 voucher valid at any of the brand’s stores or via its website.

2. DRIVING RESALE SELLING AND BUYING THROUGH STORES

Neiman Marcus recently invested in Fashionphile, a high-end consignment boutique. It has plans to have Fashionphile drop-off locations inside select stores, allowing shoppers to get paid right away for their pre-owned items. For now, Fashionphile is offering an increased buyout price for those who opt to receive payment as a credit at Neiman Marcus.

Meanwhile, just last month, Galeries Lafayette introduced a second-hand fashion platform called Le Good Dressing, which combines online shopping with an in-store experience. Vendors on the site sell products and then drop them off in the store, where buyers can come in to get their purchases – with no commission charged.  Sellers also receive a voucher that can be redeemed at any Galeries Lafayette store or its online shop. Attracting both buyers and sellers into the store, this initiative translates into a host of new sales opportunities.

Added to the list is the new Levi’s flagship in New York City’s Times Square, which has a section dedicated to selling pre-owned garments. Here, it’s possible to find not only newer styles, but also refurbished items from past decades, going as far back as the 1930s and 1940s.

3. FACILITATING THE CONSIGNMENT ITSELF

West coast brand, Reformation, is the first brand to partner with resale website thredUp on a project called UPcycle. When customers shop on the Reformation website throughout May 2019, they all automatically receive an UPcycle kit in their orders. These kits enable customers to shop the clothes they want to consign to thredUP, taking away the hassle of sorting out the inventory to do so.

But that’s not all, when a customer decides to consign any product from any brand via thredUp, they also have the option to get paid with a gift card for Reformation. This is a way to create more circularity, while also promoting Reformation’s brand. ThredUp expects to establish similar partnerships with 10 more companies this year.

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. The Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more. 

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product Retail

Upscaling of sneaker brands threatens luxury fashion

adidas Yeezy sneakers

Chinese office worker Fan remembers when she carried both high heels and sneakers to work, how much her feet hurt after a long day of work on the heels and how her beloved sneakers saved the day.

Fan works as an HR Consultant in a tech firm in Beijing, she said she now wears sneakers in the office. “I can’t remember when it first started, but (wearing sneakers at work) definitely become more popular in recent years.”

Fan said fashion bloggers influence her choice of fashionable sneakers the most, and she shares the styles on her WeChat account. As she became more comfortable wearing sneakers inside and outside of work, Fan became more willing to spend upwards of $200 on each pair of shoes.

A report by Chinese consulting firm Zhi Yan, Industry Analysis and investment prediction of Chinese footwear market from 2018-2024, pinpoints the start of the great sneaker boom to be as early as 2014, predicting that by 2020, the sports-inspired footwear and apparel market will grow to 246.7 billion yuan ($38.6 billion). The sales of sneakers are predicted to outgrow sports apparel by almost 3% by 2020.

The stylish sneaker trend is starting to have an impact on the sales of footwear from traditional luxury brands. Analysts from investment bank RBC Europe wrote in a recent report that, “The casualization trend is benefiting categories like sneakers and down jackets at the expense of formal wear/formal shoes.” Last year Euromonitor pointed out that the high-end athleisure market is forecast to overtake China’s luxury market by 2020.

On luxury e-commerce platform OFashion, there is very little difference between the price of sneakers by luxury brands, and sneakers by traditional sportswear labels. For example, a pair of Adidas Yeezy Desert Rat 500 is marked at 3149 yuan ($492.8), Gucci’s Ace embroidered sneaker sells for 3880 yuan ($607.28), Air Vapormax Off White is 5090 yuan ($796.66), and Balenciaga’s Speed Signature Mesh Sock Sneaker can be purchased for 4980 yuan ($779.39).

Although this competition may not be good news for luxury brands, the impact it has brought on the sportswear industry is positive, allowing sneakers to be sold at a higher price and with a higher product margin than ever before. According to Erwan Rambourg from HSBC, this is, “the luxurization of sneakers”.

Gildo Zegna, CEO of Italian luxury fashion house Ermenegildo Zegna, attributed the rising price of sportswear sneakers to their rise in emotional value, “If there is one product today that is impulse driven and creates emotions among consumers, it is the sneaker (…) you are talking about people spending $100 to $700 on a single pair.”

Higher pricing has enabled sports brands to share the driving seat with luxury brands. Yet more alarming for luxury brands is a new culture of sneaker exchange – partially driven by emotions and impulse. Young consumers are viewing purchasing of limited edition sneakers in a similar way to that of a Birkin bag – many hold immediate investment value and can be auctioned for much higher prices.

Stock X, a trading platform designed to make sneaker exchange easier, allows buyers to put their sneakers up for auction, and others to buy in real time just like exchanging stocks. Users get their own sneaker portfolio, and track the value of their collection over time, comparing it to others. Two years since the platform was founded, Stock X regularly exceeds as high as $2 million sales a day – approximately 12,000 transactions. On Stock X, the option of shipping to China is now available, and as Fashion Network reported early this year, the company is moving towards further expansion in China.

It’s hard to say how much crossover there is between sneakerheads and luxury buyers, but the healthy growth of both industries are being heavily fueled by young millennials. As the growth of streetwear consumption in China surpasses other fashion industries, the increasing exposure to urban clothing will make consumers open to the option of investing in a pair of higher-priced sneakers.

Meanwhile, the changing structure has led brands to think twice about their production strategies. Paul Andrew, the creative director of Italian brand Salvatore Ferragamo, said in an interview with W magazine: “People wear sneakers so much now that the architecture of the foot has really changed. Italian shoemakers often use casts that are 30 years old, but feet today have become more spread out.” Now he adds a pad made out of memory foam to all of his shoes.

By Ruonan Zheng 

This article was originally published on Jing Daily, a content partner of TheCurrentDaily: Upscaling of Sneaker Brands Threatens Luxury Fashion