Gen Z, M&A and gender-free: The future of fashion

Vogue Business Members can watch the full panel recordings from the future of fashion sessions below. Not a Member? See what you missed at the summit here, and then register to join. Fashion’s future is digitally influenced, made up of new business models and emerging brands that consider themselves to be inclusive. Gender is less of a factor when designing for clothes, and Gen Z leads the way. These themes and more were discussed as shaping the future of fashion at the Vogue Business and Google Summit. Across panels covering the state of beauty and inclusivity, resale and rental, gender-free fashion, luxury marketing, Gen Z retail trends and the future of M&A, industry leaders came together to share best practices and make predictions for what comes next. Beauty and inclusivity: Are we doing enough? In a conversation with retail and marketing editor Kati Chitakorn, fashion photographer Alexi Lubomirski spoke about the frustrations with casting for shoots where brands and publications would avoid working with models who they felt had “too frizzy hair, was too large, looked too ethnic, or was not dark enough to make a statement”. The Black Lives Matter movement was instrumental in driving brands to want to change and also brought about new visibility to black creators, said Chanel Tyler, partnerships lead for beauty and communities at Youtube. “It’s the inception of when brands took a social or political stance.” While many beauty brands are showcasing and working with black and other underrepresented groups, other categories such as skincare and haircare have been slow to evolve, said Tyler. “We need to make sure that all creators have the access and transparency to be compensated. There’s still a lack of information on pay.” Seeing more minority groups, including disabled people, in advertising campaigns would be a first step forward, said broadcaster Lucy Edwards. “The world around me disables me. I’m not what needs to be fixed; it’s the world that needs to be fixed.” Inclusivity does not mean taking a one size fits all approach. Black women, for example, have a different wash cycle to their straighter hair counterparts, yet many products claim to be for “all hair types” while not factoring in the requirements and processes of different groups of people, Harvey explains. “A conditioner that recommends daily use is not for me. You’re not considering me in the education.” Where resale, rental and repairs are heading next The adoption of resale is predominantly customer-led, according to Alison Loehnis, president of luxury at the Yoox Net-a-porter Group, who is partnering with Reflaunt to launch a resale pilot. “Two-thirds of our customer base is already actively engaging in resale or are interested in resale. Selling their own goods is a key component of that.” YNAP’s brand partners were welcoming as many were either active in the resale space already, or had been contemplating it. “Luxury brands have always been a bit more reserved because of an inherent mistrust of the grey market and the impact it might have on brand authenticity and counterfeits. But resale is no longer a controversial topic.” Many brands are still teaming up with third-party firms to fulfil the logistics of resale and rental, which brand leaders discussed in conversation with Kati Chitrakorn. Net-a-Porter is working with Reflaunt because of the startup’s seamless technology and back office operations, and its growth potential, said Loehnis. Tommy Hilfiger works with a third party service to “make use of learnings from other brands and it helps us learn faster. Financially it also makes more sense,” said Esther Verburg, EVP of sustainable business and innovation. The goal for Tommy Hilfiger is to offer a more circular system by 2030, she said. Not only is there environmental value in doing so, but consumers that make the most out of the brand’s current take-back programme are also their most loyal. “There’s a real opportunity for brands to strengthen the relationship with their loyal customers because you can be in touch again, rather than be in touch once.” Others, such as Nuuly, are building the capabilities for rental and resale themselves. “They’re two different sides of the same coin. We took on investment to build out the infrastructure,” said David Hayne, chief technology officer at URBN and president at Nuuly. The challenge with this approach is managing both the flow of funds and the flow of goods, he said. The company spent “a lot of time and effort” on the physical infrastructure that is needed to support a business where thousands of items are returned a day and prepared to be sent out as new rentals, he said. “It’s not a question of consumer demand, it’s a question of infrastructure and technology,” agrees Vanessa Jacobs, founder and CEO of The Restory. “What we’ve done is build a consumer proposition and then start to build a lot of technology and blueprints and infrastructure to be able to scale it, so that the system can be available to others. It’s about emotional durability, style and customers at the end of the day. Traditionally the industry has put aftercare in a corner. It is hard to deal with.” The Restory plans to expand into jewellery and watches sometime between 2022 and 2023. The Gen Z retailer Luxury fashion brands want Gen Z customers, and they’re adapting to the younger generation’s behaviours, interests and habits to meet them where they are. In this session, executive Americas editor Hilary Milnes spoke to Nordstrom’s executive VP and merchandise manager of men’s and women’s apparel, Shea Jensen; Mytheresa’s chief customer experience officer and managing director, Isabel May; and Heat managing director Joe Wilkinson about how multi-brand retailers can appeal to a younger customer. To May, it’s about staying true to your roots as a retailer, and curating collections that appeal to a wide variety of demographics. “We put customers at the centre of experience. That means I’m not differentiating by age, I’m thinking about what makes the customer satisfied. Curation is a huge thing for Gen Z, and we offer variety.” Nordstrom is constantly evolving its inventory as well to include new brands that appeal to a younger audience. Brand partnerships with companies like Asos are designed to catch the eye of Gen Z customers, and Jensen said that the goal is to get closer to customers that she called “individualists who want to shop where and how they choose”. Stores are there to support online discovery. Heat, a subscription service that sends customers a mystery box of luxury apparel and accessories, is rethinking the multi-brand business model entirely. Gen Z is big on unboxing, and the mystery element gives them something to post about on social media. Brands find it appealing because it puts them in front of new customers in a different setting. It’s very shareable, and word-of-mouth marketing is effective, according to Wilkinson. “Gen Z are open-minded. Don’t be afraid of trying new ways to engage with that customer.” Marketing to the luxury consumer Brands are rethinking the cadence of their social media output and the role that platforms like Instagram play, according to the executives speaking with Kati Chitrakorn in this Advanced Member session. “You can see diminishing return theory in practice on social media spending, especially on Instagram. It’s inevitable due to the platform’s scale. We don't consider Instagram anymore as a channel to sell products, we use it as a communication tool,” said Peter Baldaszti, co-founder and CEO of Nanushka. “Selling is not what customers want on Instagram. They want to understand who you are, not just buy products.” The key to successful marketing is finding a balance between art and science. Golden Goose invests 2.5 per cent in marketing and a “huge” amount in video, according to CEO Silvio Campara. The brand uses social media to provide a glimpse into the brand but without revealing too much as a way to build desire, he said. Google’s head of industry for fashion and luxury Corey Moran recommended that brands think about advertising channels that can help them build direct-to-consumer relationships and ultimately deeper engagement with their customers. Nanushka is doing this through flagship stores that offer an environment for people to spend time in beyond shopping. It was also important for consumers to experience a digital brand in a physical world, Baldaszti added. Tighter budgets at Marni means that CMO Chungaiz Khan Mumtaz is prioritizing channels with clear conversion, whether its engagement, followers, search, traffic to the site or a sale. “We shifted investment toward digital significantly. We shifted away from print and out-of-home (OOH) advertising. We’re not in the era of untraceable marketing. We need social traffic and sales.” Where are we on gender-free fashion? While brands from Gucci to Telfar are forging ahead on gender-free design, merchandising and sizing in stores and e-tailers can still create barriers for those wishing to shop outside of gender binaries, particularly trans and non-binary people. Signage and gender-free fitting rooms is a great first step, which has been rolled out across 100+ Saks Off 5th stores, said chief merchant Molly Taylor. Retail spaces also need to have a gender-free culture, agreed Browns buying director Ida Petersson and Phluid Project founder Rob Smith. “It’s [also] about the community you create within. Who do you hire to welcome someone into that space who is hesitant? It’s important that the people we took into Browns East shared our values.” Sizing still creates a barrier to being inclusive on the shop floor, said Petersson and Taylor. “We have an opportunity to lead in the market and influence our brand partners to produce in a more inclusive way,” said Taylor of Saks Off 5th. All-gender fitting rooms and restrooms are a crucial first step across the retail landscape. Beyond this, customers and sales associates are the best sounding board in order to keep improving. “To dismantle this entire structure is no easy task,” said Smith. “We’ve talked about chipping away. I’ve had the great fortune of working with big companies including Saks, Nordstrom, Target… I know how hard it is but we have great minds and great ambition. We owe a service to this new consumer, if you want their money, you need to make a change.” The future of luxury investments During a panel on the future of luxury investments, Marco De Benedetti, Carlyle managing director and co-head of European buyout group, stressed consolidation in luxury will continue to be a trend as pandemic restrictions ease. While cash is in abundance, the real issue is which target is open to sell, said Erwan Rambourg, HSBC global head of consumer and retail equity research at HSBC. An enduring topic is the potential emergence of an Italian challenger to LVMH. For years, Italian companies (which, for now, are still largely founder-led businesses) have sidestepped expansion through acquisitions. However, recent activity has stirred up the old idea of an Italian luxury conglomerate. “I think we are closer to the tipping point than we were,” said Swetha Ramachandran, investment manager at GAM Investments. Luxury groups should think wider, outside of their core categories, and in terms of consumers rather than brands. LVMH, the world’s largest luxury conglomerate, is branching out to hospitality while Kering looks to resale with a stake in Vestiaire Collective, for example. “A consumer-centric approach is increasingly something other companies adopt as well,” said Ramachandran. Companies should also think about capabilities. “We’re entering a world where, in the next 10 years, millennials and Gen Z are going to make up over two-thirds of the consumer base. Many of these consumers are totally digital native. We already see the emergence of NFTs and virtual fashion playing a bigger role. Companies need to think less about brands per se than about acquiring capabilities that can help them win the new generation of consumer.” To watch more Vogue Business and Google Summit sessions, you can find all of our content here. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More on this topic: Celebrity favourite Di Petsa on scaling bespoke fashion With $24 million raised, Evrnu wants to scale circular fashion Inside the agency Gucci and Fenty Beauty use to boost inclusivity

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