Thought Piece: How Independent Labels are Losing on Price and Brand Awareness

$91,500 Hermes Crocodile T-shirt

“You get what you pay for” is a common idiom the world over. Fashion is a commodity based industry and the perception of ‘value’ or ‘exclusivity’ is one of the most effective selling points for designer products. ¬†The most expensive items and brands are given a halo effect through the exclusionary impact of price. If you can’t afford to play the game, you can’t shouldn’t take part at all.

High fashion was never built to be inclusive or democratic; in fact the exact opposite was true. Fashion was an insider culture with it’s own set of¬†aesthetics, values, and lifestyle. Legendary couture houses such as Chanel or Dior were built to accomodate the tastes and needs of an aristocratic class. The idea of luxury has been since been re-packaged and commodified ; ensuring that any major city the world over will have it’s pick of Louis Vuitton, Gucci or Prada. Historic couture houses¬†became huge global brands. Large holding¬†companies¬†the likes of LVMH, Disel Kering (formally PPR) and OTB have mastered the formula of branding and selling luxury. They¬†continue¬†to dominate by hiring talented creative to give the design credibility all while spreading the word through celebrity endorsements,¬†worldwide¬†PR campaigns, and huge advertising budgets.

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As a reaction to the exclusionary prices of designer goods, the term the democratization of fashion emerged. The term was an opportunistic one; a way for cheap derivative goods to be sold shamelessly. It was a way for companies stand on the moral higher ground all while cutting corners on the actual product manufacturing. 

In a recent op-ad by Liroy Chofan on the Business of Fashion entitled ‘Fashions Democratic Disease‘ , the author writes

“The current unparalleled visibility of fashion, supported as it is by retailers invading all vacant real-estate, has cultivated an outlook which maintains that every person has the right to maximum fashion at any given time. The multitude, nay, the veritable oversupply of options, ¬†function similarly to tiny parliamentary factions, each asserting the right not only to be heard, but also to realise themselves in the public domain. In a similar vein, there is an imagined democratic right for everyone to purchase luxury (or at least, something that looks like luxury). Thus, the needs, desires and intentions regarding clothing, or designer creations, have become important pieces of legislation in the false democracy of fashion, evolving at dizzying speeds and enlisting an army of fools.”¬†

An army that recites the popular claim ‚ÄúI have the right to buy the clothing advertised in¬†Vogue¬†at lower prices.‚ÄĚ

Large fashion houses have mastered the ability to maximize their visibility through both traditional and digital media. They set the trends within the market which are soon diffused to large fast fashion retailers. This is a symbiotic relationship as stores such as H&M or Zara can turn-around trendy , affordable versions of pieces that were on the runway just months prior. In fact now through designer collaborations H&M, Target, Uniqlo or Nike can directly access the design creativity of brands such as Rodarte or Masion Martin Margiela.

While this has been the happening, another new¬†business¬†model has emerged that has further crowded the market. This is the model of the Web 2.0 retailer. Web¬†savvy¬†start-ups such as Warby Parker and Gilt Groupe have taken advantage of the consumer’s desire for affordable, ‘fashionable’ goods. These brands are able to generate significant investment from the financial sector and developed high-profit low-cost business models. These are not companies that cater to niche tastes, quite the opposite they use their considerable online presence to reach those consumers who may have designer products intimidating or out of their reach in the past.

All this leaves smaller¬†self-financed¬†designers to fend for themselves. Caught between the¬†mammoth¬†marketing budgets of fashion houses and the large run, bargain basement price of fashion retailers, it is my¬†assessment¬†that these are the brands under the most pressure from the current retail zeitgeist. A large part of the problem is simple mathematics. If a jacket is produced at a cost of $200, the final retail price after the wholesale and retail markup will be well over $800. This is not even taking into consideration the many other costs of operating a clothing brand. These prices alone may place these niche brands outside the price range of their biggest devotees. This problem is compounded by the fact that these smaller brands can’t generate the type of brand recognition that comes with¬†significant¬†financial backing.

Many of my friends own garments by labels such as Rick Owens, Thom Browne, or Dries Van Noten but often they were able to buy these items only on markdown or through third party outlets such as message boards and eBay. While I don’t have a simple solution to this complex problem. I do suspect that if more designers were able to sell directly to their audience and thus keep the prices slightly lower (or make a more reasonable margin) they would be able to grow much quicker. The answer may lie in which brands can really develop strategies that maximize their online reach and social media following while still maintaining integrity in product quality and design. This element of community building is essential to brand success in 2013 and beyond. If smaller labels can’t compete on price, they must spread their design message and stand for something to thrive in the current marketplace.¬†

I believe that some of the responsibility also falls on the end consumer. If you really care for a brand or believe in a design aesthetic  perhaps save up and buy the real thing instead of the watered down version. Investing in design you believe in is a worthwhile endeavor. Buying less but better may be the only way to preserve creativity in the modern fashion industry. 

Words by Rocky Li