COLLECTIVISM IS AN EFFECTIVE SURVIVAL STRATEGY FOR
INDEPENDENT FASHION BRANDS AND DESIGNERS
by Angelina Kali
The pandemic has exacerbated the shift from traditional retailing to online platforms. The trend was already well on its way prior to the pandemic. Recently hundreds go into administration every year including famous brands such as LK Bennett, JC Penney, Hardy Amies, Karen Millen, Laura Ashley, Links of London and sadly many, many more.Forrester forecasts that the global retail industry will see a $2.1 trillion loss in 2020 due to the Coronavirus pandemic, with most western economies experiencing falls of at least 9%. Forrester also predicts that it will take at least 4 years for levels to recover to pre-Coronavirus volumes. In the meantime, thousands of retailers are likely to go out of business. Just in the USA, it is estimated that over 100,000 retailers will go out of business permanently and up to 20,000 in the UK in 2020 alone.
The obvious question then is why all these retailers have not been more aggressive in moving online. The answer is simple: costs! It takes a lot of investment to structure an effective ecommerce operation. If a business is already struggling, making such investments without any guarantee of success will be daunting even for the bravest. Traditional retailers have depended on footfall whilst the holy grail for online retailers is visitor numbers. And to get the necessary visitor numbers required for profitability, most require huge advertising budgets with much of such expenditure being on Google, Facebook, YouTube and a growing percentage on social media influencers. Then the key determinant is the conversion rate – how many of these visitors are converted into actual customers. Good customer conversion rates are between 2-5%. For larger operators, these figures are often more than enough to achieve profitability as they can survive on smaller margins due to their higher volumes. But for small independent operators, it is often not enough.
What is more depressing for independent brands and designers is that there is a growing trend for large online “department” stores, that offer a wide range of products and brands, to dominate online retail. The issue here is that they tend to stock already established brands and thereby limiting choice. So what hope is there for independent designers and brands? Well, first of all is that the Internet offers tremendous potential with the entire world as the market place instead of depending on the footfall generated by the physical location. Secondly, there are e-commerce platforms such as AK Premier.com that specialise in independent fashion brands.
These online market places can be deemed as forming a collective for the smaller actors within the fashion industry. Rather than investing in their own e-commerce platforms and risking scarce cash flow on marketing without any guarantees of success, sites such as AK Premier.com provide effective platforms to promote the entire collective of independent brands by pooling the resources for collective marketing as well as each brand promoting the e-commerce site. Some may wonder why driving their visitors or clients to a site that also promotes other brands is a good strategy. But it works similarly to the concept of certain streets being famous for housing lots of book stores, music instruments or hi-tech gadgets. It attracts more visitors to the area who are interested in what they offer than if the stores were scattered all over the city. And often shoppers buy from several stores during a visit to such a street. The old adage, “Better to be a small fish in a large pond than a large fish in a small pond.” really holds true. By supporting AK Premier, you are supporting yourself. Together we are more likely to succeed.
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