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Brand Value

“Innovate with purpose to create meaningful technology products and experiences”, WGSN.

New trends of behavior and consumption in the fashion universe.

During the pandemic, new consumer behavior promoted business opportunities for fashion companies, propelled the emergence of consumer trends.

Data and Insight

Technology is becoming increasingly important when it comes to consumer relationships. The advances in technology accelerated during the pandemic and research made by Think with Google revealed some insights: 88% of online shoppers research online before making a purchase; 3 out of 4 consumers in Brazil buy fashion and beauty products on online platforms.

“Technological innovations are powerful allies to attract customers. Digital makeup and augmented reality for fashion, for instance, are recent trends.”

Consumer Technology

“Innovate for the purpose of creating products and significative technological experiences,” WGSN.

Predicting new consumer technology tendencies enables the creation of products that will improve the lives of future consumers, foreseeing new lifestyles and guiding the design of new products.

Setting a price for fashion with science

Applying statistical approaches to pricing methods in fashion can lead to substantial improvements in product sales and margins.

Pricing is one of the most challenging areas for fashion apparel retailers due to the high SKU (Stock Keeping Unit) complexity, limited item comparability, and frequent flow of new collections.

Merchants prefer to rely on the intuitive sense of the price consumers would be willing to pay, competitive benchmarking, and margin contribution. Even though this is the age of big data and online pricing transparency, this reliance on subjective pricing still prevails in the marketplace.

Heuristic Model

“We recommend a model that allows merchants to enhance their business judgment and gut intuition with science”, McKinsey & Company.

The “heuristic” model uses internal and external metrics that incorporate relevant factors. The initiative applies statistical analysis to filter these factors and tailor metrics to each retailer’s business strategy.

Pricing factors: Domestic economics influence the retailer’s product margin target; competitive dynamics can drive the price to a higher level; on the other hand, brand value can push prices down.

The model presents two problematic indicators in apparel pricing: elasticity, relatively common in consumer sectors that rely on stable data points.

“Gauging the appropriate level of elasticity is critical, because this assessment is then used to guide overall price adjustments, to project new unit volume, and to quantify net revenue and profit impact”, McKinsey & Company.

Another innovative indicator: the perceived value of individual product attributes.

“By breaking down all possible attributes and understanding their perceived value, the pricing can be tailored appropriately. Although each of the indicators could be used individually to set a price for a style, we believe retailers should use a combination of relevant indicators, assigning a weight to each one, in order to arrive at a price recommendation. Depending on the retailer’s objectives, that recommendation could maximize product profitability or market share”, McKinsey & Company.

Stronger analytical capabilities and rethinking how to collect and structure the data relevant to each indicator are essential tools for implementing this approach. And understanding the retailer’s business and strategic pricing objectives determine the weight of each process indicator.

“Although this approach relies on the ‘science’ of external analytical tools, it remains rooted in the ‘art’ of merchant expertise and knowledge. Because it is based on strategic decisions for weighting indicators, it is a flexible model that can easily be updated to keep pace with changing business strategies. As long as fashions change with the seasons, there will always be an element of unpredictability in apparel pricing. Retailers have much to gain by harnessing the wealth of knowledge they have at their disposal and applying these innovations to their apparel pricing strategies”, McKinsey & Company.

Learn more about pricing and competitiveness…

What makes your product unique?

Focus on quality and transparency

Associates Flávia Aranha and Movin are certified by Sistema B Brasil, which is the purpose of the brand’s impact and is at the heart of its business model; profits and growth provide a force for good: triple positive impact for your employees communities and the environment.

“A more inclusive, equitable, and regenerative economic system,” Sistema B Brasil.

“We are the first Brazilian fashion company to receive the B company certificate, the B Corp Certification, which recognizes and validates new organizational models that encourage the use of strong businesses to solve social and environmental problems, always in line with the concept of solidarity economy,” Movin.

Selo B companies balance purpose and profit in the following areas: Governance, Workers, Customers, Community and Environment.

“We have been certified by Sistema B since 2016. It is an initiative that is active in more than 50 countries, consolidating transparency in production processes and addressing socio-environmental impacts, equating them with profit in the priorities of a company’s management,” Flávia Aranha.

Learn more about Sistema B…

Raw material and workforce

“More than three in five consumers say that environmental impact is an important factor in purchasing decisions,” McKinsey.

Conscious consumption and a more conscious future express the consumer’s social responsibility. Expanding circular business models, strategies to reduce waste and more efficient use of resources, promote positive environmental impact in the fashion industry. “The less impact on the planet, the more benefits there will be for businesses, people and the environment.” Read more about the importance of supplies in the circular economy…

Associates Vert and Osklen found an adequate reuse for their inputs. The initiative reassesses the work processes and the entire productive chain to evaluate current transformations and consumption demands.

“We do not believe in a romantic view of ecology. Our path is economic recovery. At VERT, this involves social work: rubber tappers and cotton producers receive a differentiated value for preserving forests and rural lands,” Vert.

“Pirarucu is one of the largest freshwater fish on the planet. Native to the Amazon, it is an important part of its ecosystem, in addition to being a source of income for riverside communities that live off non-predatory fishing. Our productive process protects the species, balances the region’s food source and economy, and contributes to the preservation of the Amazon rainforest,” Osklen.

Physical stores and the (re)connection of people and spaces

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“The role of a physical store goes far beyond the sale per square meter. The on-site retail is the heart of the connection between brands and people,” says Camila Salek, columnist for Harper’s Bazaar Brasil.

With the reopening of public spaces and greater circulation of people, we are witnessing a search for reconnection, in which experiences play a fundamental role. Thus, the fashion market directs its efforts to attract customers back to their physical spaces and bring them closer to the brands.

Omnichannel is here to stay. That is, the digital space that many brands conquered during the pandemic will not be lost, but even so, brands must, need, and want to provide unique moments to consumers who are looking for these experiences in their physical stores.

Discussions about the future of the post-pandemic physical store

Traditional retail determines the value of your store by the amount of products sold – “sales per square meter.” So, the new retail explores the potential of opportunities in the integrated physical and digital channels.

Some studies made by brands that integrated their channels point to the “Halo Effect:” increase in online sales in the same region as the physical store, that is, the physical space as a stage and media for the brand influences the performance of digital sales through geotargeting.

“Have you ever stopped to evaluate your store’s result as a medium? Retail futurist Doug Stephens, in his latest book called Resurrecting Retail: The Future of Business in a Post-Pandemic World, made a very interesting provocation by saying that brands pay for their ad impressions on digital channels, but do not use the same logic to measure the impression of a campaign or product displayed on physical stores,” Camila Salek.

Reimagining stores for the next retail standard: redefining the store’s role and revamping operations for the post Covid-19 future.

The pandemic changed consumer behavior and the market needs to understand what the new consumer behaviors are.

Strategic imperatives to prepare for the next normal

In order to survive and thrive in the post-coronavirus world, stores must fundamentally change the way they operate on both sides of the P&L (statement of profits and losses).

Strategic Imperatives:

1 – Radically accelerate omnichannel integration: gain a deep and up-to-date understanding of customer preferences; imagine a new function for the stores.

The pandemic has driven new omnichannel initiatives for large and small retailers. The omnichannel integration is the current bet for the new standards that are being set.

“In our survey of US apparel executives, 76 percent said they plan to improve omnichannel integration in stores”, McKinsey & Company.

To initiate this integration, retailers can consider the following actions:

– Redefine the role of the store. More than ever, stores need to deliver customer experiences; looking to deliver a superior product discovery experience and provide access to exclusive merchandise.

– Offer basic notions of omnichannel service.

– Build an omnichannel team.

– Enable personalization of touch points in the store. “If store associates have access to customer data generated both offline and online (for example, data on loyalty and purchase behavior across channels), they can tailor their customer interactions accordingly. Even customers that start and end their journeys online can then receive personalized attention in stores.”

2- Reimagine the point-of-sale operations to reflect the new reality: redefine the cost structures of the store and prepare your workforce for the next normal.

Redefine the cost structure of the store: simplify operations and rebalance cost allocation in order to support the growing volume of omnichannel activities.

– Change the complexity. The leaders of store operations must collaborate with the merchandising function to redefine the frequency of restocking and the minimum stock levels to reflect post-crisis sales and traffic.

– Quickly digitalize and automate work without added value.

– Improve the omnichannel touch points.

– Introduce contactless self-service capabilities for omnichannel transactions. “We’ve found, for example, that 60 to 70 percent of the typical retailer’s returns process can be digitized”, McKinsey & Company.

Prepare the workforce for the next “normal”

A McKinsey & Company survey with specialized apparel and retail executives showed results: 75% indicated that their companies laid off or fired store employees since the beginning of the crisis. During the recovery period, retailers must shape their future workforce to support the store’s new role and improve flexibility of their employees, preparing for potential recurrent and virus-related stoppages.

– Retain pre Covid-19 talents.

– Improve training and integration.

– When rebuilding the store teams, rethink the composition of the workforce.

– Improve employee flexibility.

3- Optimize the store network through omnichannel performance.

“In our survey, 53 percent of respondents said they expect to close underperforming stores in the aftermath of COVID-19”, McKinsey & Company.

Retailers must incorporate their future perspectives (or projections) into their reopening plans – make decisions through an omnichannel perspective of long-term store performance; to better understand the true economic value of a sales point, a retailer should modify the store’s P&L to include its e-commerce arm.

“A forward-looking omnichannel view of each store’s performance should incorporate postcrisis traffic projections and the retailer’s envisioned role for the store”, McKinsey & Company.

#LojasFísicas #Pandemia #Covid-19 #LojasFísicasPósPandemia #Varejo #VarejoFísico #McKinsey&Company #McKinsey #Harper’sBazaarBrasil #CamilaSalek #Omnichannel

21.12.21

Black Friday and Green Friday 2021

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“After more than a year of pandemic and shopping experiences in 2020, the consumer is more prepared and hopeful for Black Friday this year.”

Black Friday, a North American term to designate the most important date in the retail market, is the main discount event of the year and an opportunity for the brands to create strategies for clearance sales, in addition to generating leads to boost Christmas sales.

Behup presented results for 2020 and a forecast for 2021 in the survey “Resumption of Consumption 2021 for Globo Market Intelligence”.

In 2020, Black Friday occurred in the Covid-19 pandemic and restrictions influenced consumer behavior in the new reality of social isolation.

“New times call for new practices and habits that affect the activities and consumption behavior of Brazilian during the pandemic.”

Consumption during the pandemic
Durable goods
Behup – 2021 Consumer Survey for Globo Market Intelligence – Sample: 1,681 people

In social isolation, e-commerce was a bet to take advantage of market opportunities. 30% said that in the pandemic, online purchases of products started or increased. And, of those, 24% intend to maintain this behavior.

Relevant fator for choosing the product or brand
Behup – 2021 Consumer Survey for Globo Market Intelligence – Sample: 1,681 people

“80% bought products through new sales channels, such as whatsapp or social media. 25% of people plan to shop on promotional dates such as Black Friday. 10% participated in live commerce, 53% of which ended up buying products and 88% say they intend to participate in live commerce in the future.”

Featured categories in live commerces:
● Clothing and accessories (71%);
● Electronics (69%).

Mains factors in live commerce:
●     Pricing and payment conditions (70%);
●     Knowing new products and services (68%);
●     Understanding more about the products that cannot be tried on by customers (58%);
●     Understand how to use a product or APP (57%);
●     Clarifying doubts about what the cliente intends to purchase (56%);
●     Recommendations of the live presenter/host (44%).

Consumer profile and purchase planning
A well-planed consumer likes to compare prices, payment terms and delivery options before making their purchases.
Behup – 2021 Consumer Survey for Globo Market Intelligence – Sample: 1,681 people

After the shopping experiences during the pandemic, 47% of these people affirm that they intend to purchase products during Black Friday of 2021, which occurs on November 26th.

“According to IBM’s 2020 Retail Index, the pandemic accelerated the shift from physical retailing to e-commerce within five years. With the pandemic set to continue causing significant disruption to physical retail throughout 2021, brands are increasingly seeking to create buzz and excitement around online shopping events and sales. Major events such as Black Friday are still going to happen, as they did in 2020, but with less physical presence and a renewed focus on the omnichannel experience, which takes into account the ways in which shopping habits have changed in the last year,” WGSN.

Omnichannel trend and the new consumer behavior

“There has been a change in the way people buy. More and more, we make online searches before going to the physical stores. And tendency of omnichannel will continue, with increasing focus and prominence for transactions in the digital universe”, Think with Google.

62% of Brazilian plan to confirm online whether the desired product is in stock before going to the store to purchase it. Source: Google commissioned Ipsos COVID-19 tracker…

How to navigate in the context of the new consumption behavior?

The “Think With” Google platform launched a commerce guide for brands and retailers with insights, data and solutions for more optimized and relevant omnichannel campaigns:

1. Reach out to your consumers while they surf the website

2. Engage your users as they browse

3. Convert people who are searching for products

4. Get ready for end-of-the-year holiday shopping

Green Friday, Conscious Consumption and Sustainability

“The traditional linear fashion value chain transitions to a circular system,” Business of Fashion.

Green Friday is a movement that discusses the excessive consumption during Black Friday and encourages conscious consumption. The initiative drives circular economy and sustainability for the future of fashion and seeks consumers’ social responsibility.

Conscious consumption creates a perception that each acquisition has an impact, positive or negative, on the economy, social relationships, and nature.

“We consume throughout the entire year, but during Black Friday, on the last Friday of November, Christmas shopping officially begins, and consumerism increases even more. With several sales and several discounts on products, it is easy to forget all about conscious consumption and get carried away by impulse. Sales on Black Friday encourage excessive consumption, driving people based on the feeling of possession instead of well-being or necessity,” Beegreen.

“One third (36%) of the British people are choosing to buy products from companies with strong environmental credentials as priorities change during the pandemic,” Internet Retailing.

Consumer commitment and circularity promote sustainable consumption and a positive environmental impact. At the same time, the market still uses dates like Black Friday to induce consumers to buy on impulse. It is possible to seek balance between the market and the planet if circular economy is placed as an imperative in industries around the world and new strategies are developed based on a regenerative and less consumerist approach. The challenge is set.

“Circular business models won’t be optional”, McKinsey & Company.

#BusinessofFashion #BOF #McKinsey #McKinsey&Company #ThinkwithGoogle #WGSN #BlackFriday #GreenFriday

23.11.21

Diversity, Equity, and Inclusion in Fashion

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How mindset changes influence diversity, equity and inclusion in fashion.

The future of fashion is to reframe consumption and seek solutions to achieve sustainability, racial representation, equity, and inclusion.

According to the National Household Sample Survey made by IBGE (Brazilian Institute of Geography and Statistics) in 2019 – “We are a country where 56% of people consider themselves black or of mixed race.”

“Fashion is still a conversation that is very much conducted by the elite. For a long time, it was based on the upper classes, power, and white people. Also, for a long time I saw myself in an almost singular space. I recognize my ancestors that I would see in fashion weeks, but there were few black people”, said Luiza Brasil, columnist for Glamour Brasil. She was selected Woman of the Year for the 2019 Glamour Generation Award among the Social Influencers Against Racism 2019.

Black Awareness: a look at inclusive fashion

The movement for change in the fashion industry is occurring worldwide and we find great examples spread across the four continents. In May 2021, the Prada Group announced initiatives to deepen its commitment to diversity, equity, and inclusion. This includes actions such as a full scholarship at the FIT (Fashion Institute of Technology) in New York for an American student and for a high potential female student from Ghana.

North American luxury retailer Nordstrom has added new brands with representation into its mix, and donated part of its profits to the Kind (Kids in Need of Defense) association.

In Brazil, Sankofa, a co-author of the Pretos na Moda movement and the social innovation startup Vamo (Vetro Afro Indigenous in Fashion), supports racialized entrepreneurs in Brazilian fashion and aims to promote inclusion and give visibility and support emerging brands of racialized entrepreneurs. Find out more…

Dialogues

How does your brand dialogue with different audiences? How does it identify them and approach their cultural and behavioral characteristics?

A Google initiative to expand the inclusion and equity debate presented numbers that prove: “50% of LGBTQIA+ people say they are willing to prioritize a brand that supports the cause, while 69% of black consumers are more likely to buy from a brand that positively reflects their race/ethnicity in its advertising.”

69% of black people believe companies are shallow and opportunist.

“A first step towards racial equality? ‘Improving the quality of work fundamentally.’”

JP Julien co-leads McKinsey & Company’s ‘Institute for Black Economic Mobility’, and led research for ‘The Economic State of Black America:’ what it is and what it could be.

For this report, JP Julien and a team of researchers and experts from the McKinsey Institute for Black Economic Mobility and the McKinsey Global Institute (MGI) provided extensive analysis to understand and quantify the roles that black Americans play in the economy – as workers, business owners, consumers, savers, investors, and residents.

For some black leaders, the most inspiring change comes when boards and leadership teams think of racial equality as the core of their business, not just part of corporate social responsibility programs.

According to the survey, black consumers will pay up to 20% more for custom-made products. So, when combined with total income parity, it results in an opportunity of nearly US$700 billion in potential value.

Visibility, Voice, and Incentive in Fashion

CaSandra Diggs, presidente of the Council of Fashion Designers of America (CFDA), shared her views in an interview with McKinsey on how the fashion industry can promote greater visibility, voice, and encouragement for diverse talent.

As presidente of the CFDA, Diggs develops strategies to present the Council’s purpose of advocating and education its members and the fashion industry at large.

In February 2021, the CFDA, in partnership with PVH Corp., presented McKinsey‘s research and analysis in the State of Diversity, Equity & Inclusion in Fashion report to develop a framework for progress toward equitable workplaces in the US fashion industry.

“One of the things we’re trying to do differently is to broaden the reach and let in more voices that aren’t the typical fashion voices”; “I would love to see more people and more ideas in the industry. Steel sharpens steel: if you are creative and I am creative, we can exchange ideas and elevate each other. The level of innovation and creativity would skyrocket”, says CaSandra Diggs.

The report for fashion companies recommends initiatives to promote diversity, equality, and inclusion. The first step is to align internal structures and policies, then activate groups externally – Black Lives Matter groups, educational institutions, or government institutions.

“When people think about equity, they think it’s a zero-sum game: if I need to help you, that means I have to stop helping someone else. Or someone loses because someone else wins. I don’t see equity like that. I see equity as a level of achievement. Most people focus on diversity and inclusion, but even when you have visibility and voice, do you have control over decision making processes? This is for me what equity is: it is having power of decision”, CaSandra Diggs.

“’The fashion industry must be as diverse as its consumers:’ a PVH perspective”

Lance LaVergne, director of diversity at PVH Corp., discussed how fashion companies can attract young people and help emerging designers – and what it will take to break the status quo.

He saw a substantial shift in the way some companies approach talent acquisition and retention through their diversity and recruiting roles.

Diversity as a Business Imperative

Also, according to McKinsey consultancy, companies have moved from focusing exclusively on diversity to also focusing on inclusion – ensuring that people are involved and engaged, despite any differences in origins – and, more recently, on belonging and equity, which LaVergne considers it to be the most interesting evolution.

In August 2020, LaVergne joined PVH Corp. to lead global talent acquisition in the company’s newly expanded role of director of diversity

“On the first day of this year’s Black History Month – February 1, 2021 – PVH Corp., in partnership with the Council of Fashion Designers of America (CFDA), released the State of Diversity, Equity, and Inclusion in Fashion report, which is based on McKinsey Research and Analysis”, McKinsey.

“[the report] is excellent because it not only analyzes the issues but also identifies specific actions that people and organizations can take”, Lance LaVergne.

Diversity as a Global Quest

“We are in one of the most interesting moments we’ve seen in a generation, and it’s times like these, times of difficulty and retraction, when you realize the importance of diversity and inclusion work. When economy or opportunity establish contracts, that is when people and companies make tough decisions, and sometimes those decisions can revert to old behaviors and old ways. That’s when it’s especially important to lean from a DE & I perspective, to ensure that business decisions are based on objective measures, so that the progress you’ve made in creating greater diversity, equity, and inclusion survives these disruptive periods”, McKinsey.

#consciêncianegra #equidade #diversidade #inclusão #sankofa #projetosankofa

17.11.21

Sankofa Project, racial inclusion for Brazilian fashion

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The initiative elected 8 racialized brands for the official calendar ofSão Paulo Fashion Week

Sankofa is a co-authorship of the Pretos na Moda movement and the social innovation startup VAMO (Vetro Afro-Indigenous in fashion), which supports racialized entrepreneurs in Brazilian fashion.

Creators

Pretos na Moda is a communication platform that promotes agendas and discussions on racial awareness and inclusion of racialized professionals in the Brazilian fashion market.

VAMO (Vetro Afro-Indigenous in fashion) is a social innovation startup of interracial professionals that develops a reparatory process in national fashion for blacks and indigenous people.

The project

The initiative aims to promote inclusion in Brazilian fashion and give visibility and support to racialized entrepreneurs in three editions of SPFW.

The Sankofa project presented eight emerging brands outside the current runway circuit at São Paulo Fashion Week N51.

Brands are monitored in order to enter the market and to create the official line up of the event in a structured way. The process has the professional support of a team (psychologists, lawyers, accountants) and eight godmother brands – prominent companies in the São Paulo Fashion Week lineup.

Eight new selected brands and their respective godmother brands

Ateliê Mão de Mãe (Gustavo Silvestre, Ponto Firme Project)

Az Marias (Isaac Silva)

Meninos Rei (João Pimenta)

Mile Lab (Juliana Jabour)

Naya Violeta (Apartamento 03)

Santa Resistência (Angela Brito)

Silvério (Vitorino Campos)

Ta Studios (Patricia Viera)

In the first edition (June 2021), the brands presented a fashion film and a photographic essay of the creation process in a fully digital form on the SPFW platform and the event’s digital channels.

“It’s more of a school than a stage for an exhibition,” says Natasha Soares, co-founder of the Pretos na Moda Collective, for Vogue Brasil.

Sankofa Partner

“How to bring Brazil closer to design, innovation, technology, aligned with Brazilian talent, vocation, and diversity? IN-MOD’s efforts are aimed at provoking this discussion and developing actions that propose different paths as an answer,” says Graça Cabral, member of the IN-MOD council.

IN-MOD, the National Institute of Fashion and Design created in 2004, is a non-governmental, non-profit organization whose mission and vision is to work in domestic and foreign markets, and to gain recognition and visibility of Brazilian fashion and design as value-added segments.

Diversity in fashion: industry voices around the world

“The runways in our country need to be a reflection of what is seen on our sidewalks. It is very important that different colors, bodies, and ethnicities are seen in a space that discusses beauty and elegance”, Emicida.

McKinsey & Company featured stories from fashion students, emerging designers and industry leaders about their experiences in US fashion – and their ideas for creating more inclusive workplaces – for the State of Diversity, Equity & Inclusion in Fashion report, from February 2021 done by PVH Corp. and the Council of Fashion Designers of America (CFDA). It also surveyed over 1,000 employees at 41 companies, conducted 20 stakeholder interviews and three focus groups with students and emerging designers.

The company also interviews two of the report’s key stakeholders: CaSandra Diggs, president of the CFDA and Lance LaVergne, director of diversity at PVH. They shared insights into areas of opportunity – including awareness, access, and belonging – and actions that organizations and individuals can take to create a more diverse fashion industry.

“Fashion is a vibrant and exciting industry that employs over a million people in the United States and attracts many aspiring designers and professionals. However, certain groups of talented individuals – blacks in particular – struggle to break into the industry, and those who do make it don’t always feel welcome. Substantial under-representation of diverse talent starts at fashion schools and internships and continues at all levels to the highest echelons of influence and leadership”, McKinsey & Company.

#sankofa #projetosankofa #SPFW #N51 #sãopaulofashionweek #IN-MOD #pretosnamoda #mckinsey #mckinsey&company #VAMO

26.10.21