CHALLENGING THE MARKET : HOW TO DO THAT ?
by Jean-Pierre Dubois-Monfort, French and European Affairs Analyst.
More than ever young people are very ambitious and want to be creative in their professional activity, either in the digital economy or in sport competitions, fighting against the climate change or working in the fashion industry.
Which prerequisites ?
In each of these fields, they have plenty of hurdles to overcome.There is also a precondition they have to fulfill : be ready to work very hard.Even ,if you are a very talented person.
The Chinese born painter Zao -Wou-Ki who moved to Paris as a young man used every morning as long as 50 years to go upstairs to the top of the building where he has his atelier .He called himself a « worker ».
The successful Japanese novelist Haruki Murakami writes ten pages a day when starting a new novel :1800 pages for the first version of his famous novel « Kafka on the shore ».
Are you ready to work so hard ? If yes, we can go on. The first question is to know what you would like to conceive, to create.Do you have already an idea ?It would be fine.
If you are entering the world of fashion as a creator,for instance designer, you have to choose one among many activities, one product or a range of products ? How to choose among them ? Your own feelings play a major role,but non only.You have also to consider what the market is already offering.
You have also more than ever to mix creative talent and technical know-how.You have to train both.You need hard skills as well as soft skills to succeed.
In order to choose the right path, it is also useful to gather information about the experiences famous designers made in their own carrier.
Self-made man or team spirit ?
Another point would be to know how to proceed : in which type of structure do you want to develop your talent ? Do you want to start working for a big company, for your own one or for a so-called small giant ?
If you would prefer working for a very strong group with famous brands around the world, you would have from the very beginning the support of a very competitive team and the prospect of affluent customers, but you would feel less free in your choices and decisions. May be you can live with that, may be not.
If you want to have your own company from the very beginning, you need not only the creative talent and the technical know how, but also a leader and team spirit and the ability to solve such different issues as finding financial support or understanding regulatory provisions.Would you focus on the conception or succumb to the temptation to manage the whole process from the creation to the production and commercial activity ?A very decisive, strategical choice.
The right solution could be working in a small giant :it means a medium-sized company with one or several famous products and a worldwide market.It would be a very good first experience, since you would learn a lot of precious knowledge in contact with your colleagues and customers.
Once you have taken a decision concerning your product or your range of products, you have to determine to which segment of the market it will apply -luxury or not- and which market would be the most suitable.
According to the structure in which you will be active, the decision on this topic will be a more or less collective, but it is useful to reflect on that.
Which is the right market for your start ?
If you intend to export your products, you can find an importer on the targeted foreign market.If your partner is good, you can from the start reach a good level of sales but you will miss the feedback of the customer experience.An other formula could be « a shop in the shop », a corner in a department store with some of your sales team.
The US ?
If you have the ambition to target the American market, it would be risky to enter from the very beginning into the New York or the Californian market.Such markets are highly competitive and you would have to spend a lot of money before being successful.
Fashion giant, as you may know, are already present in the US. As an example LVMH has 100 shops in the US ,two plants in California and opened a ranch near Dallas in October. The share of the US market is 24% of the total group turn over.Hermes has already23 shops in the US.
It would be presumably more efficient in a first step to target a less competitive but highly recommended market such as Chicago or Atlanta. But even such markets, which have some common features, have their own specificities. Atlanta is more reluctant to new experiences than Chicago.But it depends also on your product.
It would be useful before entering a new market to read some books about the town or the region. The chairwoman of a Champagne company used to read some novel when starting a job in a new market.The social values and the vision of wealth play indeed a major role in the consumption of luxury goods.Even if the novel « Gone with the wind » takes place in the second half of the 19tieth century it would be useful to read it, if interested entering the Atlanta market.
Whatsoever,the US market is a must, also for the changing commercial practices there.So wrote the Bloomberg Business Week in a special issue 2019 the year ahead : » after growing into multi-billion dollar businesses by expanding their range of products and the number of locations European luxury brands are racing to put scarcity back into the equation » .Meant were fashion drops.
The European market is a very big one with very deep differences according to the purchasing power, the geographical location and the cultural dimension of the fashion.One important point is the so-called free circulation within the Single Market.But, with the Brexit a difficult era could begin for the trade between such huge markets.
In France and Italy, the fashion industry is a very powerful one , highly profitable with very famous brands.Paris,London and Milan are the capitals of the European fashion industry.Elsewhere the fashion does not have a similar role.
In Eastern Europe, countries are recovering from the very hard time under the ruling communist party and the customers lack the culture and interest of fashion.But things are changing for those, such as many Poles , who have worked in the States or in Western Europe.
In the Nordic European countries, the people are very in favor of environmental guidelines and support animal welfare. The social pressure is very strong towards behavior which are considered as inappropriate.
The Asian market is also a very specific one.These are very dynamic countries with a strong demand for a broad range of products, but the market access is sometimes burdensome.
More than elsewhere wearing luxury goods is the proof of a social status. Buying a luxury good means also to be sure to make a good choice.But more and more Asian consumers are eager to know much more about the products they buy or they are offered.
Japanese consumers have sometimes a mimetic behavior : a fashionable good becomes more fashionable than elsewhere :it was the case years ago with the Italian dessert tiramisu, with small Volvic bottles or a wristband out of textile. It lasts at least one season.
One important point is also that the Japanese consumers are very sensitive concerning the quality.Zero defect is the rule.
In some countries such as India, the middle class is as important as a whole market in a middle-sized European country and very eager to consume western products.
In many sectors ,the African continent is considered as the Future of the world economy.This is also the case for the fashion industry.There are already in some countries an affluent middle-class which likes fashion, textiles, accessories. As it is the case in the digital economy, having good relationship with the African Diaspora in Europe can help establish bridges with some markets.
The urbanization of the world
According to scientific surveys, the share of the urban population to the global population should reach more than 70% from 2050.In urban areas people have generally higher incomes, go often out and buy more clothes and accessories. A new emerging demand is expected , specially in new towns which are under construction.
The future of fashion
The future of fashion will rely mainly on two topics :
The customer and his purchasing power
In traditional markets such as the US and Europe, the shrinking middle class limits the capacity of these customers to buy luxury goods, even accessories.In the aftermath of the financial crisis of 2008, the demand remains sluggish on some segments of the market. On the contrary, in emerging markets we see the demand on the increase. The increase there could compensate the decrease here. But it means for you that you have to develop your ability to move from one market to another one with its peculiarities such as customs rules or protection of intellectual property and also different preferences for some textiles and colors.
The new dimension of fashion
Fashion does not have nowadays the same meaning for most people than twenty years ago since the middle class has no other option than to limit the purchasing of luxury goods, even of accessories.
But the most important limit to sales expansion takes place within the social responsibility of fashion. During the G7 meeting of Biarritz some global fashion and textile companies made commitments on climate, biodiversity and oceans in a Fashion Pact. This Pact foresees a best endeavor effort in the field of social responsibility of fashion, taking into account the sometimes negative impact of production process in the fashion industry.
This sustainability awareness is welcome, but will have an impact on your activities.Already, consumers are reducing their consumption of products, not only out of lack of money, but also because they want to use less articles,produce less waste and use their clothes longer.This evolution is partly in line with the ageing society in some mature markets.
Is this trend irreversible ?It should last at least as long as we can’t find a suitable solution against climate change. If the odds are in your favor, we could find a solution in some years.
These are the constraints under which you have to develop your activities.
So it is a very challenging time for you. Good luck, good work !
Jean-Pierre Dubois-Monfort, French and European Affairs Analyst.
Double training: literary. (ENS Cachan, Aggregation of German) and administrative (Sciences PO Paris, ENA). Extensive bilateral (Singapore, Japan, Germany, Turkey, Switzerland) and multilateral (GATT, OECD) international experience: challenges, opportunities and negotiations.
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