By Roman Kirsch, Lesara
Fast fashion has been dealt a blow by the rise of trendy online retailers. These upstarts leverage micro-influencers to push their styles and connect with young people who are less and less interested in brand names. But not all e-Commerce retailers are created equally, and not all of them are responsible for the decline of fast fashion. The ones who are capturing market share are typified by one quality: they are agile.
Goldman Sachs reported in March of this year that the leading competitive advantage of fashion retail is the ability to respond to trends rapidly. This characteristic drives sales growth 15% to 25% higher than less agile competitors. What do agile e-Commerce retailers look like and how do they operate? This article will highlight the characteristics and abilities of the companies that are redefining the industry.
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To begin with, e-Commerce retailers are growing rapidly and hold a competitive advantage against brick-and-mortar stores. This advantage is likely to increase as younger consumers, who are digital natives, account for more of the market. But simply selling online is not the silver bullet. Instead, a brand of retailers that have been termed Agile Retailers are the ones winning the majority of market share from fast fashion companies.
There is a reason that lightning-fast response times and agile operations networks are a competitive advantage today. In fact, the reason is the same one that is causing all of the disruption at Fashion Weeks from New York to London and Paris — namely that consumers see a style and want it immediately, not six months from now when it is in season. That is also why fewer consumers are watching Fashion Weeks for their style inspiration, instead turning to social media influencers who pair their fashion choices with glitzy lifestyles shared through an accessible, near-addicting medium.
A Kurt Salmon report concluded that of 18-24 year olds living in the U.K., 52% have used social media as their source for fashion inspiration.
Fashion Weeks have not mustered a response to the social media influencers, and even fast fashion retailers are not capable of pivoting their production from one style to another at the speed consumers want. Out of this environment has emerged an opportunity and a demand for retailers that operate differently.
Agile retailers do not attend Fashion Weeks to find inspiration for their next line of apparel. In fact, they do not plan their production around seasons or try to create fashion trends. Instead, they respond to trends, and they do it fast — within 10 days fast. By leveraging smart data to identify trends when they are fresh, these retailers are able to kick their production networks into high gear to produce, sell, and ship merchandise from factory to doorstep in 10 days. Because agile retailers are responding to trends that pop up every day, they tend to produce way more styles than traditional retail. Lesara for instance launches over 100.000 styles a year.
All of this paints a dramatically different version of the retail fashion industry than we have ever seen before. Micro-influencers create fashion trends (not elitist designers in Milan), e-Commerce retailers respond to those trends, produce new styles in less than two weeks, and ship them directly to consumers all over the world. If all of this seems radical, it’s not. It is happening today. And the part that makes it even more surreal is Agile Retailers are beating fast fashion companies on price as well.
The retail space has been experiencing radical shifts over the last 10 years and that trend is likely to continue — though it is anyone’s guess just how different the end result will be.
Roman Kirsch is the founder and CEO of Lesara, an online shop for affordable and trend focused products and a pioneer in Agile Retail. Kirsch founded the company in November 2013, together with CTO Robin Müller and COO Matthias Wilrich, with a vision to revolutionize the retail industry. He studied business administration and finance in Germany, Great Britain, and the U.S. and founded Casacanda, the largest design shopping club in Europe, soon after. He eventually sold Casacanda to Fab.com, and went on to invest in companies such as Amorelie and Wunderdata. Kirsch is also a member of the World Economic Forum in Davos and was featured in Forbes Magazine’s prestigious “30 under 30” list in 2016.
