For a fashion designer, it can be challenging to grow a collection and build a brand within the restrictions and limitations provided by one’s domestic market.
The fashion industry is a global industry and as such, it can provide incredible opportunities to those who venture beyond their national boundaries.
At the same time, fashion is primarily a manufacturing business, and as such, dealing with the challenges of developing a global brand can be expensive and time-consuming.
In today’s post, we’re going to discuss collection development and look at various options when it comes to creating a brand that maintains its stylistic identity while at the same time it is able to compete on a global level by adapting to the needs of different customer types and different cultural dimensions.
When it comes to managing your fashion collections to expand in foreign markets, the first decision that you need to make as a designer is to understand in what direction you want to develop your brand: do you want your brand to be global or local? Are you going to develop your collections to fit the needs of a global consumer or the needs of the local one?
This is what we’re going to discuss next
Fashion Collection Development: Globalisation or Adaptation?
Every designer needs to address this question as he\she starts out on the journey to launch a product in a foreign market. Let’s compare and contrast the pros and cons of each option.
Globalizing your collection means developing a stylistic identity that is not culture-specific but caters to a customer that is not looking to express – through the brand – a particular locality or local cultural identity. In many cases, the products that belong to this category are almost like commodities (or undifferentiated) garments. Companies that go in this direction are often bridge brands or mass-market brands, as defined in our fashion market segmentation analysis. In these market tiers, products are industrially manufactured and are produced at scale to mix with the fashion element, a price point that is very attractive to customers.
Localizing (Adapting) your collection. Designers who follow this approach are able to create collections that are an expression of the local dimension of business. The brands that pursue this approach are instead on the higher tiers of the fashion pyramid (haute couture, ready-to-wear, or diffusion lines). Because of a stronger stylistic dimension, these brands cannot be as easily “globalized” because of the high value of their background and country of origin which often defines their whole stylistic identity or the collection. Moreover, the processes of production are more aligned with the craftsmanship of the artisans that make the collection, and this does not allow for the high volumes of output that accessing foreign markets may require.
But there’s a catch. According to this view, it may seem that the particular brand positioning you have acquired in the market is going to dictate how to approach the development of your collections to meet the demands of international markets. It may seem then that your options are already limited, based on the positioning statement of your brand. But that’s not the case.
From both ends of the pyramid, brands have been always trading off values to broaden their reach and access new customers. In this respect, international markets are no different. Using trickle up and trickle-down approaches allows you to expand on your audience and better monetize your brand equity as discussed in this post.
However, this approach can create competition within the brand as multiple lines and collections could potentially “cannibalize” the brand, or reduce its market share by having multiple products\lines overlapping over the same customer types.
This is why in the next paragraph we’re going to look at a more efficient approach to solving this problem.
Before we progress, If you’d like to read more about adaptation and standardization in international markets, this resource can help you learn more: How to Standardize or Adapt Your Product to Fit International Markets.
Use Business Model Portfolios to Differentiate the Collections
In order to avoid creating a conflict of interest within the same brand, we can look at some examples of business model portfolio management.
A business model is a business blueprint designed to bring to market a product or service by identifying a unique set of strategies that enhances its value to the customer. A business model takes into account:
- The product or service in terms of value to the customer.
- The customer types who resonate the most with that product offer.
- The distribution strategy that better connects the brand to its audience.
- The pricing strategy which enhances the value offered to the market.
By changing the product\price\distribution\communication mix per each collection, a fashion brand can avoid creating overlaps and cannibalization issues to its market share.
Armani is a great example of how this can be done, just like in the example below:
- Giorgio Armani Privè. This is the haute couture collection (shown in Paris) which has only one womenswear collection per season.
- Giorgio Armani. This is the top line, also known as the black label. This is sold only in mono-brand stores and each season there is a man and woman collection.
- Armani Collezioni. This is the so-called white label. This collection has a lower cost of the top line, but it still features the brand’s stylistic identity by being elegant and classic. This collection is provided by department stores and each season a new man and woman collection is created.
- Emporio Armani. This is the young and trendy line, it’s sold in mono-brand stores and multibrand stores, this collection is also designed in one man and one woman collection for each season.
- Armani Jeans. This is the denim collection, it is sold mainly in department stores. this collection is also designed in one man and one woman collection for each season.
- Armani Exchange. This is the most affordable line, with collections continually renewed based on the fast-fashion formula, this collection is also sold through the website.
As we’ve seen in our example, Giorgio Armani has been able to broaden its collection development strategy to compete internationally.
As we’ve discussed, however, there is always a risk that too much supply for a product may impact demand.
This is what we are going to discuss next in our post.
Don’t Dilute the Brand
As discussed above, managing the supply of your products is essential to manage prices, an excessive presence of your brand in the market can harm it by depriving it of the sense of exclusivity and scarcity that ignites customer’s purchase desires.
The number one issue with managing the brand internationally, even through the use of the business model portfolio is brand dilution. If your brand does not maintain some of the fashion attributes that make it desirable, then you may impact your profit margins.
This is why it is important to develop a management strategy that can help you differentiate your streams of income and build a solid brand.
Because of this, it is essential to look into a variety of entry modes, focusing on the risks and opportunities connected to each market, by exploring: export strategies, contractual strategies, and foreign direct investment strategies.
Identify the Right Entry Strategy in Foreign Markets
There are a lot of different approaches to entering a foreign market, each presents its own sets of benefits and limitations. In this section of the post, we’re going to look into the three main categories of entry modes, based on risk\opportunity factors.
Export strategies are connected to “simply” selling your products across your national border in order to reach foreign customers who make unsolicited purchase orders. Export strategies are a great first step to explore foreign opportunities, test products, and build an audience. However, the increased price of the collection, due to tariffs and trade barriers could make it hard for the business to retain a good profit margin or for the customer to get a good deal.
This is why, once the market has been validated with export, in order to take advantage of growth opportunities, brands often upgrade their strategy to contractual modes.
In contractual strategies brands invest more capital to move the production part of their supply chain abroad. This is because they would prefer outsourcing the manufacturing process to a company that is located in the same territory in which the products will be sold. This is because by outsourcing production firms can be more efficient as they are not going to pay for import tax, furthermore, their distribution costs will also be reduced.
On paper, this seems always a great idea, but in practice, the challenge often lies in finding the right foreign manufacturer who is going to be able to produce your collection with the standards of quality that you expect. Dealing with foreign partners can be challenging and time-consuming if one of the two sides is not fully invested in the partnership.
This is why in some cases, it may be easier to insource the process through foreign direct investment.
Foreign Direct Investment Strategies
What happens in this third option is that some companies may be struggling to work through third-party providers and are therefore investing to create a company-owned manufacturing or sales division to fully take control of operations.
This option is obviously easier to manage, as the company is fully integrated, but this is also a much more expensive approach that entails a lot of risks (economical, financial, political). This is why this approach is usually carried out by only larger brands who have the expertise and financial resources to conduct high-scale operations.
If you’d like to learn more about entry modes in international marketing, here’s a resource that delves much more in-depth into this topic: Understanding Entry Modes in International Marketing.
There you have it, now that we’ve touched upon all relevant topics, it’s time to draw some conclusive remarks.
In our post, we focused on globalization from a strict design perspective, but if you’d like to look more into the supply chain and organizational challenges or developing your fashion brand internationally, here’s a resource for you: The Value Chain in International Marketing.
At 440 Industries we have plenty of articles and resources discussing international marketing, don’t hesitate to take a look at our blog to find helpful information to help you navigate the industry. Enjoy!