Business Strategies Archives

The Anatomy of the Bubble in Fashion

Let’s take a classic Bubble pattern (mind you, this is schematic of a financial bubble):

Bubbles happen when the price of (fill in the blank) rises to an extreme level – way beyond its fair market value. So what causes a product’s price to rise so high? The simplified reason is strong demand and, of course, investors and businesses capitalizing on that demand.

Generally bubbles are used in relation to Housing or Financial, but I see the same ebb and flow in our Fashion and Fast Fashion industry.

As explained by John Mauldin, Bubbles generally operate on 5-part phases:

1. Displacement (All bubbles start with some basis in reality. Often, it is a new disruptive technology that gets everyone excited, although Kindleberger says it doesn’t need to involve technological progress.)

2. Boom (Once a bubble starts, a convincing narrative gains traction and the narrative becomes self-reinforcing.)

3. Euphoria (In the euphoria phase, everyone becomes aware that they can make money by buying stocks in, creating and/or selling Widget X)

4. Crisis (The momentum is disrupted. In the case with retail, it’s generally by a flooded market of competition and lowered price points. The only way to sell is to offer prices at a much lower level. The bubble bursts, and euphoric buying (producing) is replaced by panic selling. The panic selling in a bubble is like the Roadrunner cartoons. The coyote runs over a cliff, keeps running, and suddenly finds that there is nothing under his feet.)

5. Revulsion (Just as prices became wildly out of line during the early stages of a bubble, in the final stage of revulsion, prices overshoot their fundamental values. In other words, consumers discover the ugly truths of marketing, inflated pricing and the products themselves)

The first recorded bubble occurred in the Netherlands during the early 1600’s and involved tulips (yes, the flower). Tulips became so popular that their price soared, even to the point where some bulbs allegedly cost more than 10 x the annual wage of a skilled worker.

Sounds silly, right? There are similarities, however.

The average cost to manufacture a yoga legging in China = $6

Retail Cost = $90

Demand upon entering market: High

Why? New. Different. Comfy

Worker’s wage to manufacture that legging = $1.78/hr.

I can see this Bubble in our entire fast fashion industry, but for the sake of simplicity, I will narrow it down to say, jeans and activewear (yoga pants).

Denim hit quite a boom for several years and the premium denim market was soaring to great heights. Premium denim was king and everyone started producing with Italian, US and Japanese fabrics. LAs garment district for denim was crazy. Big brands emerged from nowhere and exclusive boutique brands popped up all the time before burning out. Denim’s bubble definitely burst when companies started creating premium fitting denim without the premium price. As a result, consumers found value in brands such as Uniqlo and American Eagle. A lot of companies either went under, lowered prices considerably or sold their brand to dept. stores like Kohls (Rock & Republic). The premium denim companies who are still alive after the bubble are struggling to climb and compete with: Yoga Pants.

Activewear has been around for a long time, and it was gaining popularity in 2005, followed by a slight decline before it began to rise again in 2011 (1. Displacement). But Activewear really begin to soar around 2015 (namely yoga pants), outselling Jeans. Leggings became the new jeans and the price and numbers reflected as such. (2. Boom)

Leggings followed the premium denim market, and it wasn’t unusual to see leggings retailing for $90, although in reality, the true cost of manufacturing spandex or nylon leggings in large scale production in China is only about $6-$8 per piece (far less than the average $15-$35 manufacturing of better to premium quality jeans). The machines involved with manufacturing a legging are roughly 3, whereas jeans require about 8 different sewing machines and also require more skilled labor as well as washing and finishing machines, techniques and processes.

So it stands to reason that what we are seeing in Activewear is also trend and a Bubble created not only by consumer demand for new, fresh and comfortable, but the capitalization (over-capitalization) of this demand. The hot trend of activewear has allowed brands, manufacturers and investors to do what they do best: jump on a bandwagon and run it into the ground and saturate the market.

What we saw in 2014-2015 was new yoga wear brands and existing brands expanding to activewear (3. Euphoria)

Rebrand, New Brands, New Collections, Sell, sell, sell – at whatever cost it takes. Make up fancy fabric names for what is really just nylon or spandex. Increase the prices to make it appear more interesting. Create expensive marketing campaigns to increase the demand.

But consumers get smart. When they see brands like American Eagle and Forever21 offering the same $85-$90 pants for $20, they begin to question everything. The illusion is shattered and there is no turning back.

The market is now totally flooded. Sales (and perhaps interest) will begin to decline. Investment will become limited, brands will scale back their SKUs. (4. Crisis)

I’d presume where we are right now in the Activewear bubble is right around the Delusion and New Paradigm (or on the cusp of Euphoria and Crisis) area.

Brands are scrambling to market the same product with fancy names or reinvent the yoga pant and what we see are innovative fabrics that promise to melt your fat and eliminate cellulite while you wear the leggings. Or better yet, they’ll step up their game with even more expensive leggings and target a luxury market. (5. Revulsion)

Consumers are aware of the true value and product availability now exceeds the demand.

The Bubble has burst.

The same happened with denim. There was a premium denim bubble. And it happened much in the way I’m seeing the activewear market. It rose, hit hard and then the market was flooded. The prices declined, the lower fruit bearers shut their doors and the strongest brands who were the first and best players survived.

The bubble is bursting with Junior brands also. PacSun, Aeropostale, etc. Same clothes, different stores. Homogenized.

The fashion industry is totally flooded.

The activewear market is absolutely flooded at this point, with a big range of price points. And the bubble will burst within the next year or so, leaving tons of brands in the red with tons of inventory to be sold on sites such as Overstock, 6PM and Zulily. In fact, I am already seeing this. While new companies and brands are jumping on bandwagons, they are missing the silent Stealth phase of what’s to come.

So what creates a demand or drives a trend?

Truthfully, I think the biggest portion of the activewear market right now is in women’s yoga and fitness. It’s strong not because Lululemon introduced it to us. Activewear has been worn since the 1980s. Activewear is a reflection of where women’s interests are right now. Women want to be healthier, live healthier, more soulful lives. They want to run, be active, do yoga, feel beautiful and be comfortable. Women are tired of wearing shit that isn’t flattering or comfy. Women are becoming more self aware, more empowered and either starting their own companies, or taking jobs that allow them to just be themselves.

“A report from the Institute of Women’s Policy Research (IWPR) shows that women are steadily increasing their presence in the world of small-business ownership. About 29 percent of America’s business owners are women, that’s up from 26 percent in 1997. The number of women-owned firms has grown 68 percent since 2007, compared with 47 percent for all businesses.” – Gillian White, The Atlantic

In order to see what trends are ahead, it’s important to see who your target customers are and where they’re heading. What are their interests and who do they want to be?

So what’s next?

As with any bubble, there is a burst and a return to normal.

My guess is: Minimal.

Comfort and quality over quantity.

Comfortable, classic. Leisure loungewear that plays double duty as day to active wear? Perhaps.

Less is more? Probably.

Where is our focus these days?

The basic little black dress of casual wear (black yoga leggings) will probably never leave our closet, but the athleisure trend will fade.

The next phase, or our Return to Normal is not another sport bra and yoga legging. It’s simplicity. The only way to see where we are going is to see where our focus, as a whole, lies.

Sources: Forbes, The Atlantic, Google Trends, Jean-Paul Rodrigue, Mauldin Economics.

Business

Why ‘Intuitive Entrepreneurship’ is Crucial

Lately the phrase “intuitive entrepreneurship” has been popping into my head. Perhaps these are buzzwords which are being used more often. Or perhaps, the need to employ this way of thinking is more crucial than it has been before. Letting go of old paradigms is really hard, but I guess it’s much harder when you find yourself left behind because you were afraid of change and taking a risk.

“Entrepreneurs are different. They have the ability to deal with uncertainty, to take risks and tolerate ambiguity. They usually have a personality that is mercurial, and they have highs that are really high and lows that are really low. There’s good evidence that they have strong self-confidence but also tend to be overoptimistic. They rely extensively on their own intuition.” -James V. Koch
Old Dominion University

As natural-born entrepreneurs, we are kind of wired to take risks and be rebellious. We learn really early in life what interests us and what doesn’t. This is probably why I sucked so much in school. I never understood the point. I was incredibly bored. I saw myself, my life and my future in a space that had nothing to do with anything going on in those classrooms. Life was more interesting, more intelligent and grander than the education I was getting there. I couldn’t wait to get out of school to actually create my life the way I saw it.

I think this is one trait of an entrepreneur that really stands out. If you are a natural born entrepreneur, you probably know you are a bit of a stubborn individual. You live in a bubble of your own ideas, often times feeling like you speak a different language than others. You are totally driven and would rather stay up all night planning and doing research than sleeping. And for anyone who tries to sway you from your vision, your hustle and gut instincts -well, that’s all but impossible.

I have been exercising my intuition and trend forecasting skills for a long time now. So the methods and skills I use are pretty natural to me. My career as a fashion designer has meant that using intuition, and awareness with research is vital to creating collections or pieces that are relevant. I was told in my career that, “If it didn’t scare me, I wasn’t thinking big enough”. A design manager at a company I worked for wanted us to “make him a little uncomfortable” with our designs. So taking risks has been a huge part of my life in my career and in my own entrepreneurship. And I embrace it wholeheartedly.

What exactly does it mean to be an intuitive entrepreneur? Sometimes it means taking a little time to think over and research an idea, and sometimes it means moving rapidly on an idea that sparks almost out of nowhere. With so much information being served to us on a daily basis, sometimes all we have is our intuition to go on. Taking your time on an idea just for the sake of pragmatism isn’t the wisest choice, even if it sounds wise to everyone else. If you feel deep in your gut that an idea is a hot one, I encourage you to go for it. This, in my opinion, is the purest form of intuitive business strategy, and the nature of an entrepreneur.

The ability to be creative, think on the fly and make key business decisions with little time amidst the tsunami of external information is vital. Intuition is the natural intelligence that allows us to see ahead of the curve, to generate innovative ideas, to communicate powerfully and to do so without having to study spreadsheets or gather piles of data. -Simone Wright

On more than a few occasions, I was designing 3-6 years ahead of the game. And because of that, I either hit it out of the park or swung too quickly and struck out. In 2008, a collection I worked on wasn’t market relevant, yet. Prospect Denim, a denim collection I helped create and launch in 2008, become relevant – 5 years later. In fact, every denim company launching in 2013 offered that ‘homespun, made in USA the old fashioned way’ branding message that I created for Prospect in 2008. My partner at the time had the foresight to predict the laser technologies in denim finishing long before any other mainstream denim companies were doing it. In 2007-08 I foresaw the return to the small batch, USA-made apparel roots happening before it did. Collectively, we saw the direct-to-consumer selling approach. Unfortunately for Prospect Denim in 2008, the rest of the denim world needed more time to “catch up”. We made our dent in the fashion industry with our innovative thinking and award winning website but it wasn’t enough to translate that into multi-million dollar conversions. Had we launched two years later, we would have completely crushed our competition.

Being too far ahead isn’t aways a bad thing, but timing is important.

I struck at the right time in 2009 with my first real apparel company, Berry Jane. At the time, the ‘leggings as pants’ movement was still really new. It was Berry Jane and Black Milk who were paving the way. It was hugely successful in it’s first 6 months, and by month 7, we were already on our way to multi-million dollar revenues by year 2. My only kiss of death with that brand was allowing three of the four devils of branding and the wrong partnerships to enter into the picture.

They were:

COMMITTEES (water down inspiration)
BUREAUCRACY (rules override initiative and the ability to think)
RED TAPE (not being nimble and adding layers just because we think moving slowly is somehow smarter than moving swiftly)

As a creative entrepreneur, you simply can NOT let other people into your sandbox or business before the vision (or business) is fully realized. I can’t stress that enough. Your brand and vision cannot afford to be compromised before it is fully realized. As an intuitive entrepreneur, you can seen how this will play out. Chances are, you have visualized the success of your project like no one else can. You can’t let other people change that. Most importantly, if you are going to change anything, it needs to be because you saw the areas that needed improvements or changes and you did it. Use your intuition.

Be brutally honest with yourself. This is lesson #1 in intuitive entrepreneurship.

Be OPEN to seeing, hearing and feeling when something isn’t right and quickly adjusting or tweaking areas where you feel it needs to change. If you discover that your idea simply sucks, or there is just not enough white space for your brand or business, it’s OK to adjust the sails or just fucking scrap it. Spending time beating a dead horse or living in the past keeps you in that present state: beating a dead horse that will never rise and living in the past that will not propel you forward. If you see something changing, or if the old ways of doing things aren’t working anymore, you owe it to yourself and your company to figure out why. Spend some time observing and taking it all in. Pay attention to what is going on around your space.

Ask yourself: What does this project feel like? Am I doing everything I can with it? What are the successful people doing? Where is all of this headed? As a consumer, what do I want? What does all of this feel like?

When you tune in more, you will get better at it. Take time to be alone with your thoughts and meditate. Analyze your questions and answers.

In my past experiences, I learned to strike when it felt right and to avoid big decisions if I felt hesitant. I also learned to avoid too many naysayers or partners who tried to change or complicate my flow of things. I learned how to walk away quickly from a person who felt “off”, or a project that just didn’t have the legs I thought it would have. Nor did I partner up with a person because I was desperate for funding or creative collaboration. I was not attached to the projects or brands simply because I had invested so much into them. That’s not a good enough reason to continue investing your time, your life, energy and money. If it’s a project that needs changing in order to be successful, do the necessary changes that it needs, otherwise, be OK growing it slowly or toss it. There has to be a return. If it isn’t paying you back financially or emotionally, it’s not worth it. This is another area where your intuition will not lead you astray. If it feels sucky, let it go and move on.

You have to be willing to hear and see what’s going on around you and predict what’s coming next. Where do you want to be in that game? In 2008, Tony Robbins hosted a seminar on entrepreneurship. He talked about the economy in the USA, starting a business, and how it was going to challenge all of us. He also spoke about the power of giving back and truly connecting with our clients and customers in a very personal way (through social media). If you have 30 minutes to spare, I highly recommend this video.

Anticipating is the ultimate advantage in business and in life. Be ahead of the game, don’t wait to react. Play the game. KNOW the road ahead.

Blogging

What Is Influencer Outreach, How To Do It

In a nutshell, Influencer Outreach or Blogger Outreach is the act of reaching out to bloggers or influencers to collaborate or mention your product or posts. And it’s really simple, you just need to follow a few rules.

PR and Blogger Outreach is as equally important as the product you create and vital to promoting your product and maintaining a steady flow of traffic to your website. It is very time-consuming, but highly rewarding when you do get a press write up, mention, blogger collaboration, or editorial placement. If you are financially able, hiring someone to do PR and Blogger Outreach for you is ideal. This task alone can be a full-time job, and if you don’t have the time, you will be missing a very crucial element to success.

So if you can’t hire someone yet, you will need to bite the bullet and DIY it for a while.

How to Do Blogger Outreach

At first it can be very intimidating for someone who has never done PR and Blogger Outreach but I assure you, it’s not that hard, you really just need to know a few do’s and don’ts –and be prepared to work your butt off.

Make sure you understand the amount of time it’s going to require to reach out to the right bloggers, editors, etc. It’s an ongoing effort that doesn’t end, and you will need to make a schedule so you can devote time to outreach as well as creating your content (or a product, whichever it is you do).

Create, Research, Write, Send, Follow-up and Repeat.

I think I must have sent 30 emails out before I got an interview and write up with Fast Company about my bicycle bag project. Be diligent and don’t give up! It WILL pay off.

If you plan to do your own PR, make sure you are currently creating or have created some kind of social media rapport before pitching your product to an influencer or editor, even if it’s just to Comment, Share or Re-Tweet an interesting news article they have written.

Make sure you are targeting the right blogs, magazines, etc.

Know Thy Writer. You can send email after email, but unless you research and “get to know” the writer and learn exactly what they cover, you’re wasting your time. For example, if you’re marketing a yoga wear product, don’t just reach out to general fashion bloggers, find those that focus on healthy living, yoga lifestyle, sustainable clothing, etc.

You can find and conduct research by going through sites such as Bloglovin’, and searching for relevant bloggers, reading their posts and then taking notes of their content that map to your product. Make a spreadsheet to keep track.

You can also contact bloggers in a more “automated” way, by using tools such as BuzzStream or HARO that save the time it takes to do influencer outreach. Another option is to outsource your PR / Blogger outreach by contacting one of many independent, professional Social Media Managers (freelancers) or agencies that represent bloggers who can manage the outreach campaigning on your behalf.

Once you know your target influencers, make a list of the contacts you’d like to reach out to. Emails are the best way to reach influencers, bloggers, editors. Make the emails concise and personal. Sending canned, lengthy, impersonal, copy-and-paste templates are a big ‘no-no’. We know when an email is a copy-and-paste and it’s not only offensive but it just feels like SPAM. If you need a guideline, I have provided one for you to use as a reference point.

Email Examples to Use for Influencer or Blogger Outreach

Hey/Dear/Hello _________, (use first names, never write ‘Dear Editor’)

My name is [YOUR NAME] and I’m the Social Media Community Manager at [YOUR BLOG NAME]. I came across your site and couldn’t help but appreciate a number of your posts. Feel free to add the title of a particular post here that you enjoyed.

[The pitch: With winter upon us it can be difficult to maintain clear and healthy looking skin. The frigid air takes its toll making our exposed skin dry, cracked, itchy and irritated. It’s this time of year, more than ever, when we need to take extra measures to battle back against the cruel cold.] You will want to write your own copy here, based on the subject or project you’re working on.

We’d love the chance to hear about you and your thoughts on [subject (i.e. winter skin care]. Let me know if this is something you’d be interested in and I’ll happily provide you with some more information!

Looking forward to hearing from you soon 🙂

-YOUR NAME

Basic Guidelines for Writing a Blogger Outreach Email

The first email you send should be quick and to the point. Address the person by their first name (PLEASE!)
Include relevant, supporting links.
Be enthusiastic about what you’re presenting, but don’t feel as though you need to write everything all at once.
Make it easy for them to send a quick yes response by ending the email with a “Let me know if this is something you’d be interested in and I’ll happily provide you with some more information!” or a quick, “Is this something you would be interested in?”

If they are interested, they will write back. Remember, keep it concise. If you don’t get to your point within the second or third sentence, you’ve probably lost her. Many of us use Gmail, so what grabs us or loses us is in the main subject line of the email. So make sure your subject line reads like a catchy headline to grab attention.

If and when you hear back from the editor or blogger, have your follow-up email prepared which outlines the details of your collaboration post, product, project, etc.

Again, keep it simple and to the point. Your message needs to be as concise as possible. Everyone is fighting for enough hours and minutes in the day. Don’t write your emails like I write blog posts. 🙂 Follow the KISS rules: ‘Keep it Simple, Stupid’.

A Good Example of a Follow-up Influencer Outreach Email

Hi Ava,

So nice to hear from you! Thanks for taking a minute to get back to me and letting us know that you’re interested. 😀

We’ve been talking a lot about [subject currently being pitched and discussed for blog submission]. To inform the public about [current subject], we created this helpful article but we also want to know what ideas, tips, and techniques you might have in mind.

We’d love for you to join in on the conversation and share a post on your blog that highlights [subject of blog post]. For example: [Provide subject examples, headline suggestions, etc.]

In order to further spread awareness, we’re going to be promoting a number of these posts via social media and putting together a fun Pinterest Board and Instagram posts to go along with the initiative.

If you have any questions about this please let me know. I’d be more than happy to help where I can.

Looking forward to hearing from you soon.

Regards,
(Name Omitted)

This is just one example of a follow-up email you can draw inspiration from if you’re seeking collaboration with a blogger or social media manager. If you are doing PR outreach to gain attention for your product or service, you may want to hire someone or spend a little more time crafting a pitch that grabs attention.

Give it time for a response (up to 2 days), don’t stalk. Follow up with a quick, polite email if you haven’t heard anything back. But don’t stalk. It’s creepy and annoying and won’t earn any kind of brownie points.

Generally, if a blogger is interested and you have given him/her a way to respond quickly with a quick “yes, I’m interested, tell me more!” email, she will write back soon.

Note when contacting magazine editors: If the email addresses are not available online, you can call and ask for the specific editors’ email address if it is a magazine like Conde Nast or Hearst Publications.

Here’s an example of WHAT NOT TO DO When Doing Blogger Outreach

Dear Company,
(Error #1: She didn’t even know my name. I have made my contact info really easy to find)

My name is Name Omitted and I am a fashion student at University Name Omitted. Recently I started a fashion blog (Where’s the link?) and I have been gaining a fair amount of interest in it (How much?). At the moment my followers are still quite low (How low are we talking about here?) however I hope that you can help me! (um.) I would love to collaborate with your brand! (Why?) This could be in a number of different ways.
I have listed some ideas.
1. -Exchange of clothing for posts on my social media and blog. (This would normally be a good idea for a business that produces products – if you have a large following or audience. It’s a win-win for everyone. Clothing costs a lot of money to give away. If you are a blogger or IG influencer without a following, asking for goods in exchange for promoting to a crowd of crickets is not attractive to a company. Build up your following before requesting free goods in exchange for promotional posts)
2. -A discount code that I can share with my followers. (This is a better idea)
3. -I could model a look book for your brand and post this on my social media. (This might be OK. I still need your website, blog and social media links)
4. -You could provide me with a small discount so I could buy a few of your clothes and post on social media. (Not a bad idea)
Or if you have your own suggestion feel free to share that with me! If you are interested I would love to have a chance to speak with you.
I hope to hear from you soon,

Kind regards,
Name Omitted

Her email wasn’t offensive and she was sweet and polite. But I immediately saw where she could improve. (I did write her back, btw, and we did collaborate)

Let’s look at an example of how she could have approached a product exchange collaboration with a well-researched and well-crafted email that would have given her immediate, positive results:

Subj.: Let’s Collaborate!

Dear Ava,

My name is [ NAME ] and I am a fashion blogger and a student at [UNIVERSITY/SCHOOL] studying Fashion Design. I recently discovered your brand on Instagram and I love your colorful collection as well as your brand statement. Although I am new to blogging, I would really love to collaborate with you on an Instagram project. I currently have XXX Followers on Instagram and XXX Subscribers on my blog, with XXX visits per day. You can check out my blog at Insert title and blog link here and my Instagram account: @instagramnamehere

I would love to discuss various ways in which we can collaborate. (i.e. A discount code for my Followers or a discount on your products in exchange for my blog posting and Instagram “look of the day”). If this is something you would be interested in, I look forward to hearing from you!

Best Regards,
[Blogger Name]

Example of a Good PR Product Pitch Email

Dear Whitney,

I wanted to reach out to you because I have a brand new bicycle bag collection that would be an excellent fit for your audience of fashion-savvy professionals. The brand is Carmichael Bike Bags and we are scheduled to launch on 2/12 with an estimated global reach of over 250,000 viewers per week.

We have just recently received a write-up in Fast Company and VeloJoy, and the momentum is growing! In exchange for your mention, we would be happy to add your post link and logo to our website.

If you are interested, please let me know and I can provide hi-res photos and any other info you need. Thank you!

Best Regards,
Ava Carmichael

[Provide links and contact info]

I am interested to hear what has worked for you in your outreach? Leave a comment below ?