“Fashions fade, style is eternal.”
The words come from Yves Saint-Laurent, the designer who ruled the catwalks of Paris and the aisles of fashion retailers for decades. Saint-Laurent died in late 2008, leaving his fiefdom to a younger avant garde. As these designers and the fashion retailers they supply come and go with the speed of a shutter flash, the wisdom of his statement today is inescapable. Retailers, like fashion itself, can fade. But the customer, like style, is eternal. Problem is, too many fashion retailers treat their customers like “the new black.” They see them as a temporary entity that rage this year, and fade the next. This is not true however. Customers are like the little black dress, turtleneck sweater, or blue blazer of the fashion world. They are the only consistent, and persistent, asset. But they come in different shades, sizes, and patterns. If fashion retailers knew as much about these customer differences as they did about fashion design they might find themselves in better position than the current chaos. The list of 2008 fashion retail casualties makes it hard to deny that a new marketing approach is in order. Among those that have filed for bankruptcy or closed a substantial number of stores: Talbot’s, Jones Apparel Group, Liz Claiborne, Charming Shoppes, PacSun, Steve and Barry’s, and Mervyn’s, just to name a few. 2009 looms as a decisive year. “It could be a slow death for some companies,” said Karen Ghaffari, debt analyst at Fitch Ratings. “On the other side of holiday, we’ll start to see who the stronger players are and who are the weaker players. At that point, we’ll probably hear more about store closings. Once we get on the other side of this economic downturn, I think we’ll probably see more consolidation in this industry.” Thesis: This whitepaper will show how fashion retailers can thrive and be among the stronger players as they recover in 2009. There is a way forward for fashion retailers. Although price, product, service, and location are still its core strategies, the basic element will always be the customer. It is the customer that will determine pricing. The customer will demand service. The customer will be attracted to a location or decline the visit. The customer is the asset. Customer-centric marketing must gain momentum as best-of-class retailers embrace the cross-channel world. We will show how to develop strategies that go beyond the discounts that shrink margins, rebates, and internal cost-cutting. Fashion retailers can develop a dialog with customers. They can move from thinking that they know their customers to actually knowing what needs must be addressed to maintain customer-centric, 1to1 relationships with valuable customers in the aftermath of the 2008 holiday season. As “disaster 08” heads into the uncharted waters of 2009, we think the companies that maintain their competitive edge will be the ones with the “best customer” understanding and the strongest customer relationships.