It is very unlikey that Al Gore was thinking of high fashion when he invented the Internet (remember that unforgettable comment} . Yet when one takes a few minutes to surf around you will find just about every top fashion designer in the world, along with quite a few wantabes, are represented online with a snazzy designer goods web site.
High fashion design starts out as a high margin business. That is when the mark up from the cost of production to the final sales price is computed. An item that costs $5.00 to produce in China may well be priced at $250.00 in a top fashion designers store.
However, if you hold yourself out to be a top rated fashion designer you can hardly have any of your retail shops on a back street or in a walk up building where you have a third floor location. For successful fashion designers the look of success and the smell of money is important. The next time you are in New York take a walk down 5th avenue and just look at the number of designer shops in extremely pricy locations.
The cost of renting, maintaining, and staffing suitable space can take a huge bite out of those gross margins. No wonder setting up a virtual store is such an attractive deal. While it is not cheap to set up and maintain a first rate web operation the savings over another extremely pricey brick and mortar location are considerable.
There are other benefits. With a well run website you have an effective way to reach a world of potential clients. Your store is open 24 hours a day. You can quickly see what’s hot and what’s not by placing pictures and descriptions on a website, rather than stocking a physical retail shop. Testing market acceptance of new designs is far cheaper than rolling them out into physical locations. Customer feedback is almost immediate.
If an item is not selling well it is easy enough to remove it from a website, perhaps by rotating it to a discount website that markets last years formerly hot items and those that never took off.
There is another huge advantage. A smart operator will develop a mailing list of all of his clients and keep in touch year around. He can alert his lists of special sales and the like a few days before they are advertised to the public. All of this can be done at low cost and lead to customer loyally and repeat sales.
The benefit of lower operating costs can be passed along to the consumer. So top of the line designer merchandise that may be too pricey for Ms. Average Shopper on Rodeo Drive may be within reach on the web. The designer is probably bringing more profits to his bottom line by selling at lower prices online and gains additional customers and market share compared to his offline competitors.
These days even the most established successful fashion designer can hardly afford to ignore what’s happening online nor neglect to have an online operation. The ruthless competition in the high designer fashion industry will not allow it.