Fashion as a Service (1)

Fashion as a Service (1/2) – Fashion Subscribtion Model

Last month, I brought my DVD collection to a recycling drop off point. I owned more than one hundred DVDs including Matrix, Star Wars, Indiana Jones, Metropolis, Ben Hur, The Lord of The Rings… Sadly, my collection has become e-waste, like cassette tapes and VHS, in an era where ownership, product-oriented model is challenged by an access, new service-oriented model. A smartphone gives access to millions of movies, series, songs and more entertainment than ever before. Rental economy, long tail or freeconomics have changed consumer behavior.

Nownership or how new generations value experience and access over ownership, is no  longer a trend but a reality. Why is there a lack of excitement when Millennials visit Department Stores? described how retail is not only about selling products. The reinvention or adaptation of retail is redefined by the relationship between product and customer.

Fashion as a service fashion business model rent nownership subscription customization

Commented in the Long Tail of Fashion, at the end of the 20th century, the whole system progressively evolved and new players appeared on the map, like eBay, Google, iTunes, Spotify, Netflix, Amazon…Nowadays, a few new business models (e.g. subscription-based model, rent economy) are focus on delivering great experiences or services.

Retail is evolving from selling products to experience. Nordstrom new retail store format understands this new role with services that improve customer experience beyond selling clothes like onsite alterations, personal stylists & Trunk Club, gift wrapping or Black Tux tuxedo rentals.

SUBSCRIPTION BOXES BENEFITS

Customers benefits of a Subscription Box Model:

  • Customization and guidance: A personal styling service that understands not only fashion and trends but also customer requirements.
  • Convenience: Customer receive a one-to-one virtual service and home-delivery.
  •  Discovery: customers will discover new brands and styles.

Benefits of a Subcription Box Model from a supply perspective:

  • Customer data: valuable insights from customer segments that will help to better forecast and optimize the assortment.
  • Predictable, automated Revenues.
  • Loyalty: Customers are loyal to the service not to a product or price.
  • Returns insights: reverse logistics is analyzed to understand why customer don´t keep the proposed selection (fit, color, size, price…).
CLOTHING SUBSCRIPTION BOXES DISRUPTORS

THE TRUNK CLUB is a personal styling clothing service founded in 2009 in Oregon and acquired by Nordstrom in 2014. At the Trunk Club, customers pay a $25 styling fee for a professional stylist service to customize and upgrade their wardrobe. You pay for what you keep and price range per item goes from around $40 to $300. Today, the Trunk Club has clubhouses (in-person locations) in Boston, Dallas, LA, Chicago, Washington DC and New York.

The Trunk Club subscription based business model convenience

BIRCHBOX is a monthly subscription beauty box service that helps women  (mostly) redefine their beauty routine and discover new products in a very comfortable way.  Founded in 2010 and based in New York, Birchbox is the first mover of the beauty subscription boxes and the discovery ecomm. It creates a specific product (box) for each of their customers based on their beauty profile and their shopping habits. Adapting the product sourcing in the box to their beauty needs is key for their success.

The company is closing its store in Soho (NYC) but in 2018, Walgreens took a minority stake in Birchbox and already includes a dedicate space to bring Birchbox experience in different locations in the U.S.

Read our interview to a Marketing Manager at Birchbox.

Birchbox beauty and cosmetics start up_fashion retail blog

STITCH FIX was founded in 2011 and is headquartered in San Francisco. It´s a personal styling for men, women & kids that sends clothing to your door. Founder Katrina Lake created Stitch Fix to blend the human element of personal styling with high-quality clothing and proprietary algorithms. In 2016, launched men’s, and extended women’s offerings to include plus sizes in 2017.

Stitch Fix subcription box apparel fashion business model

 

LE TOTE: the “Netflix for Fashion“. Founded in 2012 in San Francisco, LE TOTE is a fashion discovery platform that connects brands with consumers through a rental model. It offers a service of personal assistance and women can keep what they want as long as they want. Le Tote collaborates with influencers too.

WALMART BOXES: Walmart launched its Beauty Box in 2014 and since then operates Walmart Men’s Grooming Box and Walmart Baby Box. Since 2014, Walmart has delivered two million samples to loyal subscribers from brands including Aveeno, Bioré, Burt’s Bees, Caress, Cetaphil, CoverGirl, Dove, Garnier, Jergens, Neutrogena, Nivea, Sally Hansen, Simple, St. Ives, Schwarzkopf, TREsemmé and many more. Customers pay $5 per box and will receive 4 boxes a year.

AMAZON PRIME WARDROBE: Amazon launched its personalized shopping program in 2018. Prime members can chose two or more items including clothes, shoes and accessories from a wide selection of brands (e.g. Calvin Klein, DKNY, Crocs, Levi´s, Nike, Columbia). Then, they can try before buying and return items they don´t want easily and free.

amazon-wardrobe-subscription-box-model.jpg

Amazon Prime Wardrobe

A similar approach to subcription box model is the one made by Thread, a menswear and womenswear e-commerce startup that uses online stylists, as well as artificial intelligence (AI) and machine learning, to create a personalised shopping experience.

Thread menswear womenswear brand AI driven startup acquired by HM

Thread makes an initial survey asking the customer about its favourite brand, style, budget or size. Then, a stylist will update recomendations in a “customized website” that will improve thanks to customer´s likes. Every like on instagram could be used to understand your fashion tastes thanks to machine learning…

The company gives more options, like adding  your favourite clothes or things you are looking for, that will be used by stylist to show how to wear new items or find the right option.

 


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