See Now / Buy Now began gaining steam several years ago. But behind the scenes, nothing really changed in the fashion industry. Brands organized catwalk shows each season and stocked up on inventory in time for the show. The goal was to shorten the time between developing the collection and selling it to consumers but the development process has remained pretty much the same.
These experimental years have shown that transition to sales 'from the runway' or monthly drops to the brand stores failed to solve the industry’s core problem of low margins that are the by-product of the excessive long cycle from creation to sales, large inventories and surplus stocks. Even the 'hottest' brands still need to dispose of unsold goods and in reality, keep updating of the permanent 'discount' section.
Despite this, the industry continues to change. Today technology can raise the See Now / Buy Now model to a new level, offering the method of manufacturing process digitalization for comprehensive on-demand production.
In Russia designer Victoria Irbaieva from Moscow is one of the early adopters when it comes to the practical application of the on-demand business model. FashionUnited spoke with Irbaieva and asked her about her experience.
You are the trailblazer of the Russian fashion industry, a designer with a new approach to buying clothes. Can you speak in more detail about this? What can customers expect?
Victoria Irbaieva: "I began creating mid-priced clothes in 2013 and successfully marketed them at Tsvetnoy and TrendsBrands stores. The financial crisis of 2014 had a significant impact on our market position: the company was able to survive and remain afloat, unlike many of our colleagues/competitors, only with the help of the right commercial and retail strategies."
"In 2015, I completely repositioned the brand, and right away we received the offers of cooperation from the largest Moscow retailers, such as Bosco, Aizel, Tsvetnoy, etc, and completed our first wholesale orders. One year and three collections later, we ceased collaboration with almost all of the external channels, because their sales failed to clear the 30 percent mark of the total sales volumes, while their maintenance required much more in terms of our resources."
"By that time, working on the business’ financial model, I realized that the pre-order model of doing business is still the optimal one."
"My experience of watching the automotive industry that has made the transition to the pre-order format in order to save itself from overstocking, has convinced me that the way of solving the fashion industry’s key problems may be similar."
"Yes, it is a more complicated and slower business model, as you have to simultaneously relinquish the fast fashion model, and organize manufacturing more efficiently (in Moscow specifically the management of garment manufacturing is a very sad story). We had to find a way to do remote sales on pre-orders without returns, because our customers don't only live in Russia, but also in Europe, the United States, and Australia."
Have you already digitized your brand completely? What can you say about the Russian fashion industry and its relation to digital? And how are things in the West?
"It’s too early to talk about full digitalization. For example, the digital environment does not offer a comprehensive, integrated process for fabric selection yet. Still, our brand uses all of the digital options available on the market to small businesses. Our new collaboration has shown me that even small brands can use state-of-the-art instruments to optimize and reinterpret business processes. This is a collaboration with ShareCloth. This startup approached us with a project for on-demand garment manufacturing."
What know-hows in the sphere of fashion business and garment manufacturing are currently prevalent in the West and why they are absent in Russia?
"On-demand production is growing in leaps and bounds. First, it is connected to innovations in the digital product development (digital design, garment construction and 3D sampling). Second, they are beginning to utilize automated systems of pattern cutting and even robotic stitchers whose functionality, I hope, will quickly progress towards flexibility and customization of processes. Of course, everyone awaits industrial-scale adaptation of apparel 3D printing. In this sphere, it all depends on the emergence of materials that closely resemble the fabric."
"This is all directed towards rejection of mass production and mass logistics when the garment can be manufactured locally, as close to the place where it was bought as possible."
"Amazon is already implementing this strategy and has patented its own on-demand factory. For small businesses, on-demand is an opportunity, but for larger brands, Amazon with its own on-demand production poses a big threat, which means that they too will have to transform quickly."
"As for Russia, it’s moving along the path of the majority of fashion-consuming countries where domestic production has to be reinterpreted and renewed in order to achieve the competitive edge on the global market. We have all the necessary skills, resources and experience because there are vertical fashion businesses that implement state-of-the-art technologies and solutions. I just hope that the Russian businesses will be able to accept and put into practice the progressive long-term strategies similar to those that are implemented by Amazon."
This article was originally written and published for FashionUnited Russia
All images: Courtesy of Irbaieva.com