This article was originally featured on QueerCut.

PART ONE

A Competitive Marketplace

“The only truly defendable brand position is an authentic one. Any brand that tries too hard, feels forced, or seems to be a stretch can stand out—in a bad way. Potential customers can spot a brand that’s over-promising from a mile away.” —People Design

The more competitive and saturated the fashion marketplace becomes, the more important it is for brands to be authentic in how they engage with customers. Brand authenticity must be considered from a 360 degree perspective, including the physical (products, store experience) and the digital (web store, social media), always ensuring customer needs are being met. These needs are both functional (access to product, product’s utility) and emotional (sense of community, customer service), and goes beyond group identification through logos and icons. In short, it requires brands to consider the whole brand experience from the customer’s perspective.

The Traditional Model

For heritage brands, especially those at selling at luxury price points, being authentic can be somewhat tricky in today’s market, as each brand must find a balance between engaging their loyal, aging customers, while also reaching out to new, younger customers. Even at the luxury level, these brands can no longer simply rely on the strength of their brand visuals (logos, icons) or their storied histories to attract new customers in such a diverse market.

Recent shifts by brands such as Gucci, are an effort to reach more tech-savvy, millennial customers, who have more brand choices than previous generations. With the help of Dapper Dan of Harlem, Gucci has successfully repositioned themselves, in the short term, for millennial customers who are seeking streetwear-driven styles, and are willing to pay a high price for them. And yet, the long-term ramifications of this short term success are yet to be seen. The brand has already alienated many of their core customers who prefer the traditional Gucci aesthetic. Other luxury brands, such as Balenciaga, Christian Diorand Louis Vuitton, are following Gucci’s lead, and are also dealing with the same long-term issues. The question then becomes, is there is a way to meld the past with the present, to interweave long-standing customer needs with new customer expectations, in a way that’s authentic, and positions the brand for the future?

Emerging Brands

At the luxury level, the cost of change is high, and the risks are great. However, for brands just getting started, there is no need to change a customer base that doesn’t yet exist! New brands can survey the current market and enter it with fairly low risk, unencumbered by the past. This gives emerging brands a potential competitive edge. Not all new brands get it right, but those that do have seen seismic growth. Examples include Everlane and Bonobos. Both brands were careful in determining their core customer, so as to develop products, services and overall experiences that directly aligned, or authentic, to the customers needs. This strategy has helped these brands weather the growing pains they later experienced.

PART TWO

Customer Biography

Defining a brand’s core customer typically begins with creating a single customer biography, that identifies an ideal customer by name and describes a customer’s life in detail. This exercise gives the customer a face. Each customer biography should include key demographics and psychographics, full of texture and details, which can then be used to ensure proper alignment between customer and brand.

A Day In the Life

Building a biography by considering a typical day in the life of the ideal customer, can be a useful approach to this exercise. It will provide nuance beyond the typical demographic details of age, sex, income and location. The biography includes details such as the fact the customer lives in an doorman apartment on the corner of Bleeker and Sixth in the Village and grabs an almond latte at the local coffee shop on the corner, while listening to their favorite podcast, “RadioLab,” on their walk to work at a boutique marketing agency, in SoHo. They are carrying an extra bag with their locally-made yoga clothes to the studio near work. Between the demographic data points, rich psychographic details begin to emerge that provide insight into the values of a core customer. Brands can understand better where to provide their service/product, how much a customer is willing to pay for a service/product beyond the actual cost, and how they will engage with the product in their daily lives. For example, a brand like Lululemon who sells their yoga leggings for well over $100, are clearly selling more than just a product, they are providing an experience and community.

Most importantly, by doing this exercise, brands learn how to authentically engage and communicate with their customers in a variety of settings. Continuing the example above, if the customer is listening to a podcast on their walk to work, advertising on the subway is probably not going to be effective; while having a host talk about a branded product may be very effective. Or perhaps the customer is listening to their favorite playlist on their headphones, which then gets disrupted by loud in-store music, or the “hip DJ” who was hired to attract customers like them, but ends up only causing annoyance. Looking at the customer holistically, full of texture, can help to alleviate these common mistakes.

Too Focused?

A common concern among brands is if they focus too much on one customer, they may alienate others. They are also concerned that they may eliminate a potential customer base, by being too focused on one. However, the opposite is usually true. The more clear the brand mission and values are, the more likely a brand will attract their core customer, as well as overlapping customers. Said differently, a core customer might find everything they need at your store, while an overlap customer will make a point to come in for that one product they can’t get anywhere else. A focused brand, is an authentic brand, and engenders loyalty, beyond the tangible. And true, it might also engender hate by those who don’t like it. The two extremes of love and hate are much preferred over a milquetoast, take-it-leave-it attitude about a brand.

Additionally, once a strong, authentic point of view is established, brands are better able to recognize opportunities for expansion into other products and services. Brands are also better able to segment their customers, to ensure a more one-on-one approach. For example, a brand which opens a store in NoMad, the neighborhood du jour in Manhattan, would be wise to consider that many of their potential customers are tourists and staying at one of the local trendy hotels, rather than a typical, working New Yorker. These customers may be part of the intended target market of the brand, but in this context are shopping differently—looking for something that is a souvenir from New York City, something unique to the neighborhood. This type of nuanced segmentation strategy is on display in Opening Ceremony’s shop in the Ace Hotel New York. The store features quite a different assortment from their downtown locations, and yet it is still very on brand.

PART THREE

Mission-driven Brands

For many brands who start out with a strong mission, building their core customer profile is quite straightforward and often very personal. These brands often start when a need is identified by a real-life customer. This is particularly true of fashion brands that are emerging to meet the needs of disabled people, the LGBTQIA+ people, and other communities that are not typically catered to by national, mass-market brands.

A typical genesis story for a mission-based brand might start with parents who are supporting a young teenage daughter in the throes of a gender transition and in need of chest binder. After a lot of research, they realize there is nothing in the market specifically designed for a teenager’s growing body in mind. And so, out of desperation, they create something on their own. Word soon gets out in their local LGBT community about the binder they’ve developed, and soon they are getting requests and orders. Before they know it, they are developing a brand, setting up a website and selling their product. In this scenario, the customer is clear, the product is clear, everything is in alignment from the get-go, and yet the business is limited by its own focused mission.

Shifting to Niche Marketing

A company that starts with such a signal minded mission misses the opportunity to fully consider the needs of their customer. They have yet to fully build the core customer biography discussed in Part Two. They are so focused on one product, that they miss the larger needs of their customer.

Building on the above example, the teen who needed the binder also wants to live a “normal” teenage life, wearing trendy styles that fit over the binder, or finding jeans that fit their broader hips. And the parents-turned-retailers are realizing that they now have a business to run and bills to pay, which is impossible with just one product. They wonder if it’s possible to keep their much-needed business afloat with such a single-minded vision, and they begin to consider how they scale their business while staying true, and authentic, to their core customer.

For mission-driven businesses, a shift to a niche-marketing mindset can make all the difference—considering the larger possibilities of their customer. This starts quite simply with filling in the details of the customer biography discussed in Part Two. And what makes niche-marketing different than mission-driven marketing, is that it allows for overlap to happen. A teeshirt that fits over a binder, might be the perfect fit for another customer who doesn’t wear a binder. The design details of the jean, might attract a female customer base that likes a more masculine fit and deeper pockets. And in all of this, the brand stays true to its roots, and provides room to scale for profitability. After all, a brand that goes out of business, is no longer able to serve anyone.

“Concentrating all marketing efforts on a small but specific and well defined segment of the population. Niches do not ‘exist’ but are ‘created’ by identifying needs, wants, and requirements that are being addressed poorly or not at all by other firms, and developing and delivering goods or services to satisfy them.” —Business Dictionary

PART FOUR

New Technologies, Easy Access

With the advent of online retailing, and the significant advancement of user-based tools now available, setting up an online store has never been so easy. Companies like Squarespace and Shopify have made it possible for a new brand to be up and running in one to two weeks, with sleek websites. Ten years ago, companies paid millions of dollars to develop the same platforms! What’s more, social media has made it possible to reach and communicate with customers globally, that was formerly impossible without the help of marketing and PR agencies. For a new brand, this access to market is exciting, and allows for new voices to be heard and recognized in a short amount of time.

So many options and constant change

And yet, this very access, and speed, has led to a glut of options in the marketplace. There are now more brands and products for customers to choose from than ever before. The effects have been spectacular, with storied department stores being unable to compete with new, more agile upstarts like Warby Parker and Nasty Gal, and therefore forced to close their doors, often in bankruptcy. Other technological advances have facilitated speed to market of goods, enabling brands like H&M and Zara to replenish their stores daily, in direct contrast to the traditional model of monthly or seasonal deliveries. It’s possible to visit Uniqlo at the beginning of the month and the end of the month and see completely different products! All of these advances have created a cutthroat atmosphere, as brands compete for attention.

The costs of building a brand

Most of the bad news has focused on big companies closing their doors, however this retail disruption has also affected smaller companies. New fashion brands often close their doors in one to three years, because they lack the capital necessary to grow their business and differentiate from their competition. With a major shift away from wholesale, wherein new brands would rely on the financial support and brand affinity from well-known department stores like Nordstrom or Macy’s, to a direct-to-consumer model, brands must now pay their own way to play. And the cost of creating a new brand and then getting customer awareness in a saturated market is high.

New Tools

Tools such as social media have become increasingly more difficult as vehicles for gaining brand traction from a sales perspective. Too many brands have learned that “a million likes” doesn’t translate into even half of that in sales. And by engaging would-be customers on social media, brands are effectively keeping them from engaging fully on the online store site, where actual shopping happens (very different from the scroll-tap, scroll-tap motion of being on Instagram). Furthermore, developing an audience through Search Engine Optimization (SEO) and Search Engine Marketing (SEM) has become extraordinarily expensive, forcing companies to pay for their own brand names, and those of their competitors to gain market share and drive customers to their sites. In a sea of trillions of websites in the US alone, this is a daunting task.

Additionally, while setting up a online shop is fairly cheap today, selling online is very expensive. With so many options, brands are lucky to have customers who are “sticky” enough to actually shop on one website for a minute or longer, rather than going back to Google to hone their search.

Online Stores

A online store also requires a lot of created content to be successful. For example, it’s standard to have four to five images for every product sold online. Typical costs for images range from $25-$175 per image, and that doesn’t always include the costs of the models or studio rentals. Editorial images, and branded content is also necessary to communicate brand values on a company’s home and category pages. It’s required to have copy that describes each product in details, in line with SEO strategy. Online customer chat services are becoming the norm, and are expected to be open 24/7. What’s more, returns of goods sold online is very high, adding to overall operational costs, including restocking, reselling and tracking issues. All of these costs add up, and force new brands to work with small profit margins.

Finally, selling direct-to-consumer (business to consumer, B2C), requires different strategies around inventory, because all the risk is held by the brand. In a B2C operation, there is no other intermediary (ie, buyer at a department store) purchasing inventory in volume, and helping to mitigate operational risk, that is typical in a wholesale (B2B) operation. These brands also miss out on the expertise experienced buyers can provide that help eliminate bad purchasing decisions, including overbuys and underbuys. And when a company sells direct to consumer, they are reliant on day-to-day sales of their products to operate their business, rather than quarterly payments. B2C brands also do not have the same access to bank loans or factors, such as Hildun or Rosenthal & Rosenthal, who essentially provide loans on inventory that hasn’t yet sold in store, effectively giving brands the cash they need to manufacture upcoming seasons.

In many ways, this trend towards direct-to-consumer retailing has forced brands into rethinking how they develop and sell products altogether. Which begs the question, is creating a brand even worth it?!

PART FIVE

Disruption leads to opportunity

With all of the doom and gloom about today’s fashion retail industry, opportunity does exist. Any time a market goes through a disruption of this magnitude, it’s typically because it is long overdue for change. With the onslaught of new technologies in the past ten years, including the launch of Facebook (2016) and Apple’s iPhone (2017), and the current advancement in Augmented and Virtual Realities (AR and VR), the relatively stodgy fashion industry hasn’t necessarily kept pace, particularly on the back-end. Sure, fashion brands look sleek on the outside, but they are often struggling to connect a variety of hardware and software technologies.

Starting from a different place

The reality is that companies that are opening today, are starting with these new technologies as their foundation. These new brands understand better the complexities of online marketing and social media engagement. After all, many of these company’s founders are tech natives, having grown up with the technology that earlier generations had to learn and adapt.

What’s more, with the use of data analytics, brands are are able to better determine the needs of their customers, and their subtle shifts, in a way that was never thought possible only a few short years ago. In short, they are able to grow much more strategically with their customers. If managed correctly, major shifts in cultural trends and directions, are less likely, because brands will have seen them coming. Therefore, shifts in trends are now more subtle and brands who pay attention to their customer base and adapt in synch with them, are less likely to miss out on opportunities and be stuck with bad decisions. Ultimately, using analytics strategically can help brands remain more authentic to their customers needs.

Coming Full Circle

It’s easy to get caught up in the latest technologies, and begin to think that if a company just uses the latest and greatest social media platform, their ticket to success is secured. But that logic is faulty and can lead to costly mistakes. The reality is that adoption of new technologies takes time and has a ripple effect on other platforms being used. Often, exciting new technologies are replaced quickly with more thoughtful, functional iterations. Brands must stay focused on their customers and the products, services and experiences they desire. Technology should be support of that, almost invisibly. The future is finding ways to develop one-on-one relationships with customers, using technology, no matter the channel.

Marketplaces

One of the emerging opportunities in retail, is the growth of online marketplaces such as QueerCut. These marketplaces allow brands to engage in niche markets beyond their core customer base. These marketplaces can be broad in terms of product offerings, such as Etsy, or more focused like ASOS or FarFetch. Unlike traditional wholesale models, marketplaces like QueerCut do not hold inventory, rather they provide a nexus for brands to do business using plug-in tools (API) that allow businesses to connect their existing web back-end with the greater marketplace. Additionally, marketplaces offer an affordable way for brands to test the market, with a built-in customer base, before spending money on building their own website. Gaining customer insight up front can be incredibly useful when choosing the type of online retail store a brand wants to create, when the time is ready.

Online retailing?

Online retailing is costly, there is no doubt about that. But, brands who approach their online businesses with this in mind, and plan ahead financially and strategically, can see this negative turn into a positive. While it’s nice to get paid a lump sum for a collection from Saks Fifth Avenue each season, there is a lot of risk in making something that won’t be sold months down the road—until the following season. In contrast, direct-to-consumer retailing can be very agile and adaptive, taking advantage of micro-trends and fads, that engage customers. What’s more, being forced to engage directly with the consumer does have it’s advantages, providing brands ongoing insight and feedback on their products and services. Loyal customers love to help (almost to a fault), and they can become a valuable resource to a growing brand, becoming brand ambassadors. Over time, customer and brand become intertwine, and a sense of reciprocity develops that is truly powerful.

—Joshua Williams