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Fashion-As-A-Service: It's Less About Clothes, More About Relationships

Tien Tzuo
CEO, Zuora

Summer mode: activated. The hot months mean an increased focus on fashion and what you wear, and that has me thinking of fashion-as-a-service. 

Now, in my conversations around the world, I hear many doubting the reign of the subscription fashion industry, pointing to the steady decline of subscription boxes. That’s understandable, as lots of folks associate subscription fashion with monthly boxes. But that thinking is archaic. It’s never been about the boxes! It’s actually about filling a deeper customer connection paired with the experience of improving your wardrobe.

Let me explain. I think we can all see that subscribing to things you don’t really want in a box was never a great model. Dispensable subscription box services are bad for the environment, restrictive for both consumers and companies, and aren’t creating excitement right now on social media. They provide no true curation, no real improvement using technology (AI/machine learning), and there isn’t a compelling retail or ecommerce experience. Subscription boxes also don’t sync up well with hypebeast culture (sneakers, streetwear, etc.) due to the idea of scarcity in streetwear and high fashion.

What the fashion industry needs is to go through a shift from “fashion boxes” to true fashion-as-a-service, where the key relationship is between the wearer and the fashion designer, potentially curated by a stylist. There’s tons of potential for a fashion gold rush of digital relationships, subscriptions, and styling services. 

This evolution in fashion retail to fashion-as-a-service has already been happening. Stitchfix, for example, continues to be unfairly labeled as a subscription box company. In fact, they are a fashion-as-a-service company that uses artificial intelligence (AI) and more personalized curation in order to create clothing shipments based on what you would wear, instead of a random mix of brands thrown into a box that you might like. Again, it’s about the relationship between the wearer having access, not just receiving clothing boxes. The excitement and experience of getting new items from your favorite fashion brands that you’re certain you’d want to wear, definitely beats a random care package every month. The reason why is it appeals to a deeper meaning – some might call it an emotional craving – that the wearer has because they’re looking for clothes that feel like they were meant for them, not randomly picked out of a warehouse.

So what are key things that fashion companies must do to execute this evolution? Here are five.

Lesson 1: Build direct relationships

Accessibility and personalization are important if you’re running an ecommerce fashion business, more so than a retail experience. This made me wonder: if you chose, could you start with fashion ecommerce then successfully transition to fashion retail? Of course. An Instagram model and a programmer both want clothes that fit them well and embody who they are. The longform answer comes from the real-world example of Stoney Clover Lane, a hugely popular and successful accessories brand that took its audience hype and social media engagement and pivoted into retail stores and brand collaborations with companies like Disney. And that’s all just within the last two years. Does your brand have a community-created fan page? Stoney Clover Lane does, and it directly contributes to customer engagement and sales.

Lesson 2: Mobile apps are key

Mobile, it turns out, is one of the best ways to build that direct relationship. Nike is a great example. Nike maintains excellent use of mobile apps, social media, and influencers in order to generate hype for its ecommerce. Generating big sales through social media engagement isn’t a tactic solely for the Creator Economy. Nike listened to its users and placed a marketing campaign into the hands of Spike Lee, generating hype and interest into record-breaking engagement for Nike ID and the Nike mobile apps. You don’t need to advertise the latest sneaker release, if your favorite influencers are wearing new pairs before they’re even on sale.

Part of what makes Nike’s resurgence so mesmerizing is that Nike invested heavily in technology to understanding the customers that use their apps. This partnership gives Nike incredible flexibility with its mobile apps. The results speak for themselves. The SNKRS app and Nike’s other mobile apps helped directly fuel its 18% increase in annual revenue growth. Nike Digital’s total growth was 11% from a year earlier to $4.8 billion for Nike Direct. Mobile apps are undoubtedly important for the accessibility of fashion.

Lesson 3: Planning for the future and overcoming supply chain challenges

Fashion brands are all about being trendy, but they need to think long term. Supply chain issues, inventory issues, and sustainability have made all fashion brands rethink their long-term success and operations. This is because almost no brand is above issues affecting supply, even Nike. Building resiliency to disruptions and managing the damage will all be part of managing a strong brand in the future, especially in the fashion industry. Also, some buyers may want to use fashion-as-a-service to waste less, the opposite of fast fashion, which is destroying the planet.

An interesting example I’ve seen in sustainability within the fashion space, is with recyclable sneakers that are only available via a subscription. Creatively pitched as “the shoe you will never own”, On’s Cloudneo running shoes can be ground up and melted into plastic pellets at the end of their life cycle, then turned into new shoes. For $29/month, you’re promised an endless supply, as long as you return your worn out pairs. This business strategy addresses recurring revenue, locking in a supply of raw material (reducing waste), and accessibility ($360/yearly on shoes you can have swapped out for a fresh pair).

I might just get a pair myself! After all, I don’t have to own them.

Lesson 4: Use influencers.

The old world model was “I want this celebrity to wear the clothes I would in an ad”, but has since transformed into, “I want this Insta/TikTok personality to wear the clothes I would in an ad”. Fashion brands have an opportunity to redirect the focus of what appeals to their customers by leveraging more everyday influencers versus aspirational role models. And this in turn, gives them insights into what their customers want. Influencer marketing company, Unbox Social says, “Fashion influencers have now become an integral part of the social media marketing channel because they have carved a spot in the virtual lives of the users.”

Understanding your customers’ digital habits from likes on a video of a TikTok star galloping in a summer dress to them buying said dress, gives you even more insights into what pieces appeal to your customer.

Lesson 5: Balancing the tension of ease-of-access and scarcity. Another company is attempting to do something with access to fashion, instead of monthly shipments – Rent-The-Runway. So far, it has gone through two major iterations. The first being a service where you can “rent” women’s designer or ready-to-wear runway pieces and accessories for special occasions or outings. The second, being a monthly subscription that allows you to essentially wear designer clothes for work, so you always have a new outfit. While Stitchfix is more focused on figuring out which clothes you’d like to continuously wear everyday, Rent-The-Runway is more focused on when you dress up, but don’t want to spend hundreds (or thousands) on a fashionable outfit. So far, RTR is closest to the concept of “usership for high-end fashion”.

It’s worth noting why fashion-as-a-service struggles with balancing high-end fashion: it goes against the exclusivity and scarcity of fashion houses and their brand. Gucci has no interest in the subscription box business. They know their customer will seek them out, whether it be ecommerce or retail, and most importantly, can afford the merchandise. The same goes for popular hypebeast streetwear brands that were founded in New York City, like Kith or Supreme. 

Brands like them produce a limited number of units, with the full intention of having them be sold out, with consistent social media rollouts to ensure their customers are engaged and aware about upcoming releases.

Therein lies the needle in the haystack: if high-end fashion brands could build those customer relationships in order to better organize their releases, release even more exclusive merchandise, and prevent the resale market from taking over, then there’s a real chance for fashion-as-a-service.

After all, if fashion was so easy to pull off, we would all be experts at “summer mode”. Not everyone is so talented that they can style themselves. Fashion-as-a-service, at its best (in theory), allows you to always wear new, trendy clothes at work or to a party. That’s indispensable; monthly boxes are not.

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