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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

Deborah Weinswig

Managing Director,

Fung Global Retail & Technology

deborahweinswig@fung1937.com

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

1) Impactedbyrisingdigitization,thefashionindustryiscurrentlyinastateofrapidtransformation.High-endfashionbrandsareevolvingtowardsasee-now-buy-nowbusinessmodel,whichconsistsofrunwaystylesbeingavailableforpurchaseimmediatelyafterfashionshowsinsteadofthecustomarysix-monthwait.

2) Thechangingfashionindustryretailschedulehasfar-reachingimplicationsfordesign,marketingandsupplychains.Thissee-now-buy-nowdevelopmentpresentsadditionalchallengesandincreaseslogisticalcomplexity,asrealigningordersanddeliveryscheduleswithsuppliersisrequired.

3) Majorbrandsanddesignersthathaveintroducedcapsulecollectionsandturnedtheirrunwayshowsintosee-now-buy-nowformatsincludeRebeccaMinkoff,Burberry,TommyHilfiger,RalphLauren,CoachandMichaelKors,amongstothers.Todate,themajorityofdesignersthathaveadoptedinstantrunwayfashionmodelsfocusonpremiumandaspirationalpricepointsratherthanhigh-endluxuryproduct.

From Runway to Checkout:

The See-Now-Buy-Now Trend

in Fashion

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

IntroductionInthisreport,wediscussthetrendforinstantfashion,whichconsistsofbuyingstraightfromtherunway,ratherthanthecustomarysix-monthwaitingperiod.Weanalyzethefactorsthathaveemergedtoshapethissee-now-buy-nowtrend,aswellasensuingimplicationsfordesignersandretailers.Wetouchonthedebatebetweensupportersanddetractors,andintroducedesignersandbrandsthathaveembracedinstantfashiontodate.Finally,weshedlightonthefashionindustryandhowthesee-now-buy-nowmovementislikelytoevolveinthefuture.

See-Now-Buy-NowRevolutionImpactedbyrisingdigitalization,thefashionindustryiscurrentlyinastateofrapidtransformation.Growthinecommerceandsocial-mediashoppingisforcinghigh-endfashionbrandstowardaconsumer-facing,see-now-buy-nowbusinessmodel,whichconsistsofrunwaystylesbeingavailableforpurchaseimmediatelyafterfashionshowsinsteadofthecustomarysix-monthwait.

TheSpring/Summer2017fashionshowseason,whichtookplaceinSeptember2016,wasthefirstseasontoembracethesee-now-buy-nowmovement.Burberrywasthefirstmajorbrandtoannounceasee-now-buy-nowrunwayfashionshowwithproductssolddirectlytoconsumersafterthecatwalkshow.

Theinstant-fashionmodelcanbeconsideredlargelyapositivedevelopmentforconsumers.Thechangestakingplaceareenablingthefashionindustrytobecomemoredemocratic,inclusiveandaccessible,astheboundariesbetweentraditionalfashionbuyersandeverydayretailbuyersareeroding.

However,todate,mostsee-now-buy-nowfashionshowstookplaceduringNewYorkFashionWeekandincludedUSdesignersandaccessible-luxuryprice-pointbrands.Furthermore,mostofthesee-now-buy-nowproductwasconfinedtocapsulecollectionsandnotcompletecollections.Someinstant-fashionshowswerealsostagedduringLondonFashionWeekinSeptember2016,anditseemstheinstant-fashiontrendiscurrentlymoreprevalentintheUSandUKthaninItalyorFrance—atleastfornow.

TraditionalFashionIndustryModelThecurrentfashionindustrymodelfollowsatraditionalseasonalfashionretailcalendarthatconsistsofdesignerbrandsandluxuryhousespresentingtwoseasonalcollectionsperyear,whichareunveiledattwofashionweeksperyearinthecorecitiesofParis,London,MilanandNewYork.TheSpring/SummerseasonispresentedinSeptemberandFall/WinterispresentedinFebruary.Aselectgroupoffashionjournalists,department-storebuyers,celebritiesandindustryinsidersarepresentattherunwayshows,andcollectionitemsdonotappearforsaleinstoresuntilthefollowingseason,sixmonthslater.

Forexample,besidesafewsee-now-buy-nowfashionshowsheldinSeptember2016,mostdesignerswereshowingSpring/Summer2017collectionsthatwillbeavailableforsaleinthespringmonthsof2017.

Traditionalfashioncapitalscustomarilyhadamonopolyonfashionweeksandwerehighlyinsulatedandexclusive.Department-storebuyerswouldseecollectionsontherunwayandthenorderdesiredstylesfortheirstore

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

network.Thiswouldallowbrandstotestdemandfortheirdesignswithretailersbeforecommittingtobigproductionvolumes.Historically,lower-pricedretailersandhigh-streetchainswouldalsocopyluxurybrandcatwalkstylesfromtherunway.

Thefashionindustry,especiallytheluxurygoodsindustry,wastypicallyslowtoembraceecommerceandsocialmedia.Somefashionhouses,suchasItaly’sSalvatoreFerragamo,areonlynowofferingready-to-wearrangesforpurchaseonline.Previously,Ferragamoofferedonlyaccessoriesandfootwearthroughitsecommercewebsite.NewYorkandLondonfashionweeksareconsideredmoreinnovativeandcommercialthanthoseinParisandMilan.

CatalystsforChangeTraditionalfashioncyclesnolongerreflectconsumers’demandsforimmediategratification,andindustrychangesfollowgrowingconsumerdesiretopurchasecollectionpiecesstraightfromtherunwayinsteadofwaitingforsixmonths.Consumersloseinterestthemoretimepassesbetweenproductviewinganddelivery.Nowadays,consumerscanorderandreceivemeals,movies,transportationandvariousservicesattheclickofabutton,andareincreasinglyexpectinginstantconsumptionfromfashion.

Digitizationandsocialmediahaveinfluencedretaileradvertising,andconsumersperuseFacebook,Instagram,SnapchatandTwitter,aswellasvariousappstomakeinstantproductpurchasedecisions.

Globalizationiscontributingtotheirrelevanceofseasons,asproductsareavailableglobally,includingthroughecommerce.Manufacturingefficienciesanddigitizationtechnologieshaveallowedcompaniestosupplycustomerswithproductmorerapidly.MultinationalcompaniescatertostoresintheNorthernandSouthernhemispheres,andtotravelers,whichhavesimultaneouslydifferingneeds.

Weatherpatternshavebecomevolatileandunpredictable,andseasonalcollectionsarebecominglessandlessrelevant.AccordingtoaVerdictRetailsurveyconductedintheUKinJune2016,85.6%ofapparelconsumers

Source:nyfw

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

preferpurchasingclothestowearforthecurrentweather,and51.4%statedthattheydonotlikepurchasingapparelbeforethenextseason.

Fast-fashionretailercyclesareinfluencingthehigher-endfashionmarket.Manyfast-fashionretailersintroducenewproducteverycoupleofweeks,andconsumershavecometoexpectsimilarproductnewnessfrommostretailersandserviceproviders,evenluxurygoods.Furthermore,department-storebuyersarelosingpowerandinfluenceinthefashionindustry,asdepartmentstoreshavebeenpostinglowersalesgrowththanmonobrandstoresandecommerceplatforms.

ImplicationsforDesignersThechangingfashionindustryretailschedulehasfar-reachingimplicationsfordesign,marketingandsupplychains.Thesee-now-buy-nowdevelopmentpresentsadditionalchallengesandincreaseslogisticalcomplexity,asrealigningordersanddeliveryscheduleswithsuppliersisrequired.Instantfashionnecessitatestighterproductionschedules,evenforluxurybrandsthatproducesmallerbatchesofproducts.Movingproductionanddeliverydatesiseasierforfast-fashionretailers,especiallyasthesedonothavetodealwiththewholesalechannelandbuyers,asmanydesignerbrandsdo.

See-now-buy-nowisalsoriskyfordesignerbrandsinthesensethatdesignersareunsureofcollectionproductdemandandruntheriskofunder-orover-producingpieces.Withtheinstant-fashionmodel,designhouseswillnothavetheopportunityandtimetoascertainwholesaleandretailbuyerdemandfortheirproducts,asmerchandisewillhavetobereadyforsaleimmediatelyafterthefashionshowthatintroducestheirnewcollections.Fashionhouseshavetoplantherightinventorymixandvolumestoavoidunsoldgoodsendingupindiscountstores,whicherodesbrandimage.

Aspreviouslymentioned,somedesignersarecreatingsmallercapsulecollectionstoaidwiththelogisticaldifficulties.

CriticismsTheinstant-fashionphenomenonisnotwithoutcritics.Creativebrandsthatfocusoncraftsmanshipanddetailneedadequatetimefordesignandproduction.

Somefashionpunditsbelievethatthesee-now-buy-nowmovementmayleadtodesignerburnout,ascreatingin-seasoncapsulecollectionsinadditiontotraditionalseasonalcollectionsonlyincreasesthedemandsonthedesigner.Theendresultcouldbeareductionincreativityandbranddilution.

Furthermore,manyemergingbrandsdonothavethefinancialmeanstomanufactureseasonalcollectionsunlesscustomerdemandiscertain.

Finally,atarecentWWDSummit,fashiondesignerDianevonFurstenbergexpressedherdislikeofthesee-now-buy-nowtrend,proclaimingit“vulgar.”

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

TheFuture?Itisverylikelythatthefashionindustrywillgenerallycontinuetoevolvetowardamorestraight-to-retailmodel.Morebrands,evensomehigher-endluxurybrands,willbecomemoreopentosellingsomecollectionitemstoconsumersdirectlyfollowingfashionshows.Moreandmorebrandswillpresentandsellclose-to-seasonorseason-lesscollections.Fashionhouseshavenochoicebuttoadapttotheconsumerdemandforinstantgratification.

Improvementsinshipping,transportationandpackage-handlingwillhelpbrandsdeliverinstantfashion.Retailerswillincreasinglymakeuseoftechnologicalinnovationssuchas3-Dvirtualfittingroomstofacilitatesizefitting,aswellasleveragesocialmediatoolssuchasFacebookMessenger’schatbottoservicecustomers.

However,see-now-buy-nowwilllikelynotbeagoodmodelforveryhigh-end,veryintricatedesignercollectionsthatrelyontime-consumingandmeticulouscraftsmanship.Forothers,wheretheproductiontimecouldbeshortened,themodellooksmoreadaptabletosee-now-buy-now.Thereisroomforbothmodels,anddifferentbrandsanddesignerswillhavevaryingstrategies.

Source:fxgear.net

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

DesignersAvarietyofbrandsanddesignerssuchasRebeccaMinkoff,TommyHilfiger,RalphLauren,Coach,MichaelKorsandTomFordhaveintroducedcapsulecollections,andturnedtheirNewYorkFashionWeekrunwayshowsintosee-now-buy-nowformats.Todate,themajorityofdesignersthathaveadoptedinstantrunwayfashionmodels,focusonpremiumandaspirationalpricepointsratherthanhigh-endluxuryproduct.

AlexanderWangUSdesignerAlexanderWangfollowedthetraditionalfashionmodelforhisSpring/Summer2017collection,butunveiledanewcapsulecollectionincollaborationwithAdidasOriginals,whichimmediatelywentonsaleonlineandthroughaNewYorkpop-uptrucktourthefollowingday.

Emergingandlesser-knownhigh-endandaspirationalluxurydesignersthatjumpedontheinstant-fashionbandwagonduringNewYorkFashionWeekincludedTanyaTaylor,Thakoon,OpeningCeremonyandAlice+Olivia,amongstothers.

BurberryUKluxurybrandBurberrypioneeredthesee-now-buy-nowmovementwhenthecompanyannounced,inFebruary2016,thatfollowingitsSeptemberLondonFashionWeekrunwayshow,consumerscouldpurchasecollectionitemsonlineandinstores.Thecollectionincluded250men’sandwomen’spiecesandsomeitemssoldoutonlineshortlyafterthecatwalkshow.Burberryalsolabelsproductbymonthsratherthanseasons.

Burberryhaslongbeenconsideredadigitalleaderinthefashionindustry.Thebrandwasamongthefirsttolive-streamrunwayshowsandtosignpartnershipswithsocialmediaplatforms.

CoachUSaspirationalluxurybrandCoachmadethelimitededitionofitsbagcollectionavailableforsaleadayfollowingitsfashionshow.

MaybellineMaybelline,themass-marketUSbeautyandcosmeticscompany,hasalsojumpedontheinstant-fashionbandwagon.ThecompanylaunchedtwoeyecolorproductsonmodelsatRebeccaMinkoff’sSeptemberrunwayshow.TheproductswentonsaleimmediatelyaftertheshowviaanexclusivepartnershipwithAmazon.

MichaelKorsAfewhoursfollowingMichaelKors’fashionshow,certainFall2016itemsweremadeavailableforsaleinlimitedquantitiesonlineandinUSstores.Thedesignercommentedthathethoughtconsumerdemandforsee-now-buy-nowproductwouldfocusmainlyonaccessories,butthereadytowearpiecesavailablewerealsowellreceived.Inresponse,thebranddecidedtoextendthesee-now-buy-nowready-to-wearofferavailableinSpring2017.

MoschinoItalianfashionhouseMoschinocreatedacapsulecollectionthatwasshownalongsideitsSpring/Summer2017runwayshowthattookplaceinSeptember2016,whichappearedinthedesignhouse’sstoresoneday

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

followingthefashionshow.Moschinowastheonlydesignhousethatembracedsee-now-buy-nowduringMilanFashionWeek.

OliverSpencerUKmensweardesignerOliverSpencerallowedcustomerstoorderitemsusinganappfollowinghisLondonFashionWeekAutumn/Winter2016show.Productscouldbedelivered48hourslater.

RalphLaurenUSdesignerRalphLauren’sfashionshowinSeptemberwasheldonthestreetoutsideofRalphLauren’sboutique,andshowattendeeswereinvitedtoshopthelooksinthestorerightaftertheshow.Theshowwasalsolive-streamedonsocialmediaplatformssuchasFacebookandChineseandSouthKoreanmessagingservices.OnFacebook,consumersweredirectedtoRalphLauren’swebsitetomakepurchases.Thedesignerisalsoworkingonasee-now-buy-nowmenswearshow.InFebruary2017,RalphLaurenplanstostageaspring2017runwayshow,asthecompanywillhavecaughtuptoitsnewsee-now-buy-nowschedule.

RebeccaMinkoffInSeptember2016,USdesignerRebeccaMinkoffhostedasee-now-buy-nowfashionshowatherNewYorkboutique,withshoppingallowedimmediatelyafterwardandconsumerscouldvirtuallytryonstylesthroughanapp.Thecompany’swebsiteadvertisedthelive-streamingofthefashionshowinthedaysleadinguptotheeventandanhourafterthestartofthefashionshowabuyfunctionbecameavailablewithalmostallrunwaypiecesinvarioussizesavailableforpurchase.TheRebeccaMinkoffwebsitealsoinvitedcustomerstoshopandpurchaserunwaylooksattheSoHoNewYorkstoreimmediatelyfollowingtherunwayshow.Storesalesthatdaydoubledyearoveryearande-commercesalesincreased50%yearoveryear.

TomFordUSdesignerTomForddidnotpresentaFall2016collectionatFashionWeekinFebruary2016,inordertofocusonashoppablecollectioninSeptember2016.TomFord’sSeptemberFallsee-now-buy-nowcollectionapparentlyresultedinadditionalsalesinthebrand’sbeauty,fragranceandaccessorycategories.

TommyHilfigerTommyHilfiger,ownedbyPVH,streameditsfashionshowliveonitswebsite,andcustomerscouldpurchasetheTommyHilfigerGigiHadidcollaborationcapsulecollectionstraightofftherunwayforthefirsttimeinthecompany’shistory.EverysingleitemshownontherunwaywasinstantlyavailableforpurchaseonTommy.com,at300TommyHilfigerstoresgloballyandat150wholesalepartnerswithin24hours.ViewersofthelivestreamedTommyHilfigershowcouldpurchasepiecesthroughthebrand'sFacebookpagethrougha"ShopNow"button,andsomeitemsweresoldoutovernight.Pop-upshopswerealsosetupneartherunwayinManhattan.Thecapsulecollectiongavethecompanyanextraseasontomoveitsmanufacturerstothenewretailschedulewithoutmissingarunwayshowseason.InFebruary2017,TommyHilfigerwilldebuthisfullSpring/Summer2017collectioninlinewiththenewinstantretailcalendar.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

TopshopMass-marketapparelretailerTopshopalsohostedaSpring/Summer2017UniqueCollectionrunwayshowduringLondonFashionWeek,andconsumerscouldpurchaseitemsrightaftertheshow.TopshopUniquehostedapop-upmarketstall,whichwasopenimmediatelyafterthecatwalkshow.Topshopisararehigh-streetretailerthatpresentsatLondonFashionWeek.

KeyTakeawaysImpactedbyrisingdigitization,thefashionindustryiscurrentlyinastateofrapidtransformation.High-endfashionbrandsareevolvingtowardsasee-now-buy-nowbusinessmodel,whichconsistsofrunwaystylesbeingavailableforpurchaseimmediatelyafterfashionshowsinsteadofthecustomarysix-monthwait.

Thechangingfashionindustryretailschedulehasfar-reachingimplicationsfordesign,marketingandsupplychains.Thesee-now-buy-nowdevelopmentpresentsadditionalchallengesandincreaseslogisticalcomplexity,asrealigningordersanddeliveryscheduleswithsuppliersisrequired.

Majorbrandsanddesignersthathaveintroducedcapsulecollectionsandturnedtheirrunwayshowsintosee-now-buy-nowformatsincludeBurberry,TommyHilfiger,RalphLauren,CoachandMichaelKors,amongstothers.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

February1,2017

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJohnMercerSeniorAnalyst

EvaK.SeniorResearchAssociate

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