Retail and Apparel apocalypse

by Chris Gerardi on February 04, 2019
Greetings to all our Mellivora supporters and to those who just want to read our blog.
 
There has been a lot of news about apparel stores closing and sales numbers being down for Christmas 2018.
 
I generally don't blog too much on these topics however I have been saying a lot of these things will happen for a while.
 
So I wanted to share my outlook on the future - these are just my thoughts...
 
I wanted to start by addressing the old and soon to be doomed way of retail shopping and apparel production.
 
First off the traditional mall will be coming to an end - why do I think this? I shall explain.
 
When you walk into malls it generally has the same big name brands Banana Republic, Gap, Nordstrom, Macy's and many others.
 
These companies and many others continue to cater to the consumers looking for a deal, or a sale that never ends and there is always a sale of some sort.
 
While there will always be those looking for a deal, consumers are becoming wiser with their money and also want a connection to what they purchase.
 
When you buy cheap meaningless clothing there is no connection and it ends up in a basement or closet or hopefully the ARC thrift store.
 
The buyers for these companies who purchase the goods to sell always want large margins - like 60% or more, you ask why.
 
I shall inform you, they want to be able to have a 25% off sale and still make money.
 
Well, in theory, this works, however, what they won't tell you is that their sales have to be 40% to 60% just to move the product.
 
This is causing more and more of a margin squeeze and leaves less and less for profit.
 
Do you ever ask yourself why big box retailers all carry the same products and you rarely see a new brand?
 
A lot of the time it's because the new brand cannot give higher margins and create thousands and thousands of pieces per year.
 
There is nothing authentic about these big brands and have less and less connection with the consumer.
 
The next thing is production, it is becoming more expensive to produce overseas and other countries are moving in the direction to mitigate the exploitation of their land resources and labor.
 
It's a fact this shift will and is happing, whether the big box and large retailers want to acknowledge is up to them, however, it seems they are not.
 
The reason I think this is because first off their numbers and store closings are not looking like they are changing their ways.
 
So why purchase a North Face coat that is sold in every big box and all over the net at a discount, it just creates more compassion for the retailers.
 
Clearly, they may not see the light, if everybody is selling the same thing everybody is doing the same thing.
 
This causes more and more competition in the market place.
 
If retailers want to serve over the next five to ten years they need to set themselves apart from their neighbor.
 
If they do not start to carry brands that have reason and are connecting with customers then they will fail.
 
People ask me "Why are you doing apparel?", "People are buying less of it right?", I always respond with, consumers may be consuming less.
 
However, we are producing ethically and we make products that are completely unique and connect with our customers.
 
Everything must change, we must produce at a smaller level with more positive intent for all.
 
This means our customers, workers, and where our materials come from.
 
We must produce goods with intent for doing right.
 
This may mean a smaller company with less growth, but that's ok.
 
We also need to help large retailers understand that the shift is coming and they need to focus on better products and lower margins.
 
Thanks for reading!
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