Mercedes-Benz Fashion Week Australia recently staged a workshop aimed at educating emerging designers on the business of fashion. Ragtrader presents the expert panel discussion.
Jarrad: One of the great things to be able to do, is to tap into expert's knowledge when you're going through the development phase of putting together collections and find out how you should be marketing your collections, so what we've been able to do, is to bring together some key industry experts to start getting a conversation going about this and what makes a brand really sing. Eva, we'll start with you. you've obviously seen a lot of collections in your line of work, so what are the key components you're looking for, when you first walk into the room and your designer starts showing his/her collections?
Eva: Well, the most obvious would be point of difference. If you are recognising things that you have already seen in other collections, that's going to be a problem, so you need some highlight pieces in there that are going to be points of difference for buyers to think “wow” and generate a unique response. So, you need to have some point of difference, be it through colour, shape or print. But most importantly for me, very quickly after getting over that initial factor, immediately after, if I'm touching it, and even if at first it looks mundane, if the quality of production seems incredible – every panel beautifully bound, every hemline perfectly stitched and straight – often this quality of production is something that can really entice me and make me really excited over something. To have a combination of both? Suddenly I've fallen in love. That's another level.
Jarrad: How important is price point for you when making a decision?
Eva: Not really important for me, those two other factors are the things that way supersede anything else. I look at price point further down the track because I'm used to working with very expensive product and I know my clients trust what we do at Parlour X, so if we are going to be picking up something new, that is going to be sitting next to Azzedine Alaïa or Balenciaga, then it's going to have to be of a certain level, so price point wise is a little bit irrelevant. However, if it's set at an unrealistic price, then that's going to be a problem too.
Jarrad: So clearly it's very important for brands to do their research and make sure that they are actually relevant to the stores that they are aiming for. Do you get a lot of designers coming to you that would just never be able to fit into your store because of their product?
Eva: Yes, constantly. And it's really difficult, because my email gets flooded and I'm a former agent and I was commercial for 12 years, so I really want to be very polite and recognise everybody's hard-earned creativity but sometimes I do get annoyed and I just think, “hang on a second, have you ever even visited the store”? And then it makes me stop and think – if you honestly believe that you are approaching this boutique and you think that your product IS relevant, do you even know what you're doing? Are you even relevant to the marketplace? And then I feel a little bad for them, because they've put in a lot of hard-earned effort and they've put a lot money behind them, and this might be their one shot, but no-one has told them the reality of the situation, about where their relevance lies and their own realistic notions of what they are creating.
Jarrad: You just reinforced how important it is to know your own brand DNA, so that when you are going out to market, you're actually going to the right places. David, you've been quite a trail blazer for David Jones and their support for Australian designers. Where do you find your young designers, what do you look for and how long do you watch that designer?
David: Well it really depends. There's no formula, and I think like Eva, there's a multitude of things on the checklist. But ultimately it comes down to the customer. I don’t really care about anybody else other than the customer and making sure that we are giving her what she wants, so the same applies to designers. It’s about identifying your customer and what is is that she’s going to wear and how much she’s willing to pay for it. And no, it’s not about price but it is about value. And the customer is really smart, and she understands what she’s getting. You know, she’s gone to night school and she knows more about garment production and fabric qualities than we do.
So price is irrelevant. We can sell a $20,000 dress if it’s perceived as being good value. But we struggle to sell a $10 t-shirt if she doesn’t see it as value. So it’s about knowing who your customer is, knowing what the brand DNA is and knowing which brands and which retailers suit that customer. And so for us, it’s really about not necessarily about how long we look, but certainly as a department store, we’re not cheap to deal with. So for us, there’s also a secondary consideration and that is – can you afford to deal with a department store, because there are all sorts of costs involved in delivering into a department store. We are a public company, we have shareholders and customers to answer to, so that balance for us is a really fine balance and our expectation is quite high on your ability to deliver to the back door and deliver the right quality for the right price.
So, is it price right, is it quality right, is it seasonally right, is it fashion right. And the customer is much more interested in quality than the price, so to reiterate Eva’s point it’s about quality. If you are serving her rubbish at the right price, she’s not interested. So it’s about – can you afford to do business with us, do you understand what it costs to do business with us. Those are the conversations we have with designers first up. The first conversation is, I really like the collection, I think it would be good for our customer, I think she’s going to love that, and then it becomes a conversation about logistics and finance and can we accommodate you in order to get the brand into the store or not.
But ultimately they are the two things in fashion – quality and all that kind of stuff and then the logistics of doing business. And I think they are things that you should never underestimate. And talking about export, I’m the wrong person to have on this panel, because I think you have to actually ask yourself WHY are you exporting? Do you actually have a sustainable local business that can sustain you through a dollar being at a dollar or 55 cents? Because that will happen through the lifetime of your brand. How have you costed that product and how have you mitigated the risk if your product goes back to 55 cents or, in the case of export, to $1.20?
Jarrad: You’ve touched on an important point there David, building the foundations of your business and making sure your own backyard is sustainable. So when you’re looking at international brands what are the key elements you look at in terms of delivery schedules, and how they have to deliver to you, particularly in the pricing, the packaging – what do you look for?
David: Look, it’s no different, ultimately either you‘re going to look for brands that either the customer has asked for or that in your humble opinion, your customer will desire and then it’s the same deal. For us it’s about back of house, you know, have they got a sustainable business? You know, the last thing we want to do is write an order for half a million dollars and put a sales expectation against that half a million dollars and then have the stock not turn up, because “it’s too hard” or “we’re too small, or too far”, or they didn’t think about the fact that they had to ship it and all that kind of stuff. So for us it’s no different whether they are an international brand or a domestic brand. It’s about – is the brand right for our customer and does it have the logistics and administration and financial skills to actually get the stuff to our front door so we can sell it.
Jarrad: Now, for this next question we’ll probably get two different answers from two different retailers, but - how big is a small order?
David: Well, I wouldn’t tell you that.
Eva: You know, I’m going to wear my commercial/wholesaling hat for a minute and say that, I think retail has completely changed and a lot of retailers are going through hard times, and a lot of retailers are finding it difficult to pay and there is a lot of difficulty with dealing with many retailers.
My best advice that I would give to any designer is to focus on your clients that you know are doing really well, and try to get the maximum dollar out of them, instead of spreading yourself thin and getting a $5,000 order here, a $5,000 order there from 20 different accounts.
Because firstly, the stockist is going to appreciate that they have relative exclusivity over an area, and they are going to feel that you are being brand loyal to them, therefore, it is going to affect their decision when they allocate their budget to you as well. And in that way, if your product sells and your product works really well, then they will grow their budget with you each season. If you try to please too many people, then you’re going to run into all sorts of problems, it’s just not going to work.
I also think you should have minimums because I think that’s also showing the client that you have faith in yourself and faith in your abilities. If you’re accepting $1,000 orders here and there, you’re blocking off suburbs and you’re blocking off areas from real retailers that will put their money where their mouth is.
I would also suggest to any designer that you take a deposit. No matter how desperately, badly, you want to be positioned in a store, even if that’s your dream store and the benchmark of “getting there”, it doesn’t matter what their credibility standing or anything is – you take a deposit. Because that’s another sign that you believe in yourself and also you safeguard yourself in case they go bust. And they do. At different stages, companies go bust. And if a client doesn't want to pay a deposit, it’s a sign that something’s wrong. I’ve been doing this many many years and I have suppliers that I’ve been dealing with for many years, and I don’t have a problem with it. I like paying deposits and because at the end when my deliveries come in, it’s less to pay anyway. I always think it’s a but fishy when people say “no, no I can’t pay that..”
Jarrad: It’s about building your business at the rate you can afford, accepting orders that you know you can fulfil and knowing that you can deliver them at the right time.
David: And it’s also about knowing what’s important to the retailer, so Eva’s is a really good point. Like you, it’s a business. We put sales against those garments from the date that we have an expectation that they are going to arrive. You can only sell it once and the customer will buy something else. So if it’s not on the shop floor, you’ve missed the sale. We haven’t missed the sale because we’ll sell her something else, you’ve missed the sale. And Eva’s right, I think the less people you deal with, the more profitable it is. And the smaller the order, the greater the brand damage, I mean, you want a retailer to represent a do-able part of your brand. If a retailer’s only prepared to buy three garments, the customer doesn’t see anything, and it certainly doesn’t say to the customer that the retailer believes in it, and it’s really not a great thing for your brand. So without being unrealistic, you have to think, what is the minimum representation of your brand that you want the customer to see? Is it 20 garments, 30 garments? Because what we order is actually what you’re consumer will see, so you have to be happy with that representation.
Jarrad: So Glynis, what about the media, what are you looking for when you’re looking at a collection?
Glynis: Well, the same things honestly. We want a point of difference, we want something original and we also want to see quality. If we see something with hanging threads coming down the catwalk, we’re going to make note of that or you won’t make it into the pages, or we’ll mention it and say “Ooh, a bit sloppy”, and that’s the last thing you want to see in print. Also, just because you don’t get a shot for Fashion Week, doesn’t mean that in two months time I’m not going to ring you and say “hey, I remember that dress that you showed, I’ve got a story that that’s going to work for”. So just because isn’t in the Fashion Week wrap-up, doesn’t mean it’s not going to get run. Also you have to be prepared for the fact that you may receive bad press some of the time.
David: Exactly, this is business, so park your ego at the door. You have to take that on board, because it’s real feedback. Also, research is important before pitching to a retailer, and of course, we have our best sellers. We’re not going to tell you what they are, but when we’re looking at adding something new, we want something different and something that is going to add incremental business.
[Asked how relevant Australian made product is to your purchasing decision as a retailer]
David: Not at all. I couldn’t care less. Sorry. I think that the world is such a small place. For me and for our customer, yes, she’s interested, but, sadly, I think nine times out of 10 she’ll pay more for it and then you start thinking about that value equation and you start to talking to people about pocket, so why am paying $20 more for that white shirt that’s made in Australia, that’s of the same quality, same cotton count the same everything because it’s not made in China? It's all about quality these days, and the quality in offshore manufacturing now, especially in China, is in many cases just as good as in Australia – and that's what the shopper and the retailers care about.
Eva: Exactly. China’s quality now is so good. Once upon a time, many years ago, I might have looked at a label and thought, “Ooh, it’s made in Italy or made in France, but now if it’s made in China it doesn’t bother me, because I know that the quality is so good now, it could be as good as anywhere else. Look, once upon a time, cashmere could only come from Scotland, but now, Hong Kong, facilitated through China, is producing some of the most fantastic cashmere. So it’s kind of become obsolete and I think it’s a bit old-fashioned to care where the garment comes from, as long as the quality is supreme.
Glynis: I think people possibly engage more when it’s about where it’s sustainably produced, that kind of thing, so they don’t want things coming from sweatshops, sure, they want to know that if the product is coming from China, it’s coming from good places in China, so I think they might care about the social aspects more than the Australian-made tag.
David: I mean, the customer cares about Australian business, she’s certainly passionate about Australian design, but I think the reality is that no matter what global brand you pick up now, it’s made in Tunisia, it’s made in Turkey, there are ports in the world that are experts in different things. You know, a few years go, Japanese denim was all the range, but now Turkish denim is fantastic. I mean, it [Australian-made] really is irrelevant now. Sadly, without getting on the soap box, we’ve squashed an industry so much over 30 years that it just doesn’t exist, and we can’t compete, because the consumer wants the right level of value for money for her.