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Business models that don’t evolve are always threatened by disruption. The US specialty apparel sector is a fascinating case study in businesses, and brands, entrenched for long periods of time (decades), seemingly safe, but now facing imminent destruction. The concept of the shopping mall is dated; millennials have different habits than teens in the 80s & 90s. It’s no longer a valid plan to simply have a store in the mall, pay high rent, and expect shoppers to arrive, happy to pay high prices. Consumers (especially young ones) are more “global culture aware” and use technology/apps to find the very best price points. The retail graveyard is full of stores that failed to invest in technology, kept prices too high, and never modernized distribution to incorporate faster turnover of inventory and fashion. In this instance, fashion-forward Europe does it better. Yesterday’s stores included Gap, Old Navy, Express, Abercrombie & Fitch, American Eagle, and Aeropostale. Poor inventory management, mark downs, margin compression, and store closures, all combined to devastate stock prices. The first round of disruption commenced 10 years ago with the arrival of H&M (Swedish), Zara (Spanish), and Forever 21 (Korean family-owned). International apparel retailers challenged the traditional approach of […]
Clik here to view.
Business models that don’t evolve are always threatened by disruption. The US specialty apparel sector is a fascinating case study in businesses, and brands, entrenched for long periods of time (decades), seemingly safe, but now facing imminent destruction. The concept of the shopping mall is dated; millennials have different habits than teens in the 80s & 90s. It’s no longer a valid plan to simply have a store in the mall, pay high rent, and expect shoppers to arrive, happy to pay high prices. Consumers (especially young ones) are more “global culture aware” and use technology/apps to find the very best price points. The retail graveyard is full of stores that failed to invest in technology, kept prices too high, and never modernized distribution to incorporate faster turnover of inventory and fashion. In this instance, fashion-forward Europe does it better. Yesterday’s stores included Gap, Old Navy, Express, Abercrombie & Fitch, American Eagle, and Aeropostale. Poor inventory management, mark downs, margin compression, and store closures, all combined to devastate stock prices. The first round of disruption commenced 10 years ago with the arrival of H&M (Swedish), Zara (Spanish), and Forever 21 (Korean family-owned). International apparel retailers challenged the traditional approach of […]
