The seismic changes affecting retail has everybody talking. The fashion industry in particular always seems to be a topic of discussion when it comes to analyzing things like department stores, seasonal models, and direct-to-consumer brands. Perhaps the reason why there’s so much discourse around the retail landscape in fashion as a whole is that it’s been slower than other industries in reacting to change. Fashion as an institution is steeped in tradition and, as a business, is predominantly tied to a long-adhered-to seasonal calendar as well as a complex web of distribution and selling rooted in wholesale.
These themes are the main points of conversation that unfold across various B2B conferences, summits, and seminars. Adam Pritzker, chairman and chief executive officer of Assembled Brands, understands the forces and changes in fashion as well as anyone. The company he founded is built on providing working capital and financial services to a collection of emerging consumer brands that together can benefit from the company’s centralized network, sharing important resources and data. Due to his company’s holding model, Assembled Brands often gets compared to the heavyweight French conglomerates like LVMH and Kering. But Pritzker underscored some key elements that differentiate his company from his European counterparts at the WWD 20/20 Retail Forum in June. He also weighed in on some of the event’s key themes of rapid transformation and how the old way of doing things are collapsing.
Pritzker agrees that direct-to-consumer businesses are particularly suited for success in today’s retail climate due to several factors. “The important part of any direct-to-consumer business is using data to understand your customer better and then using that data as an input to inform whatever kind of output you’re creating for them,” he says. Indeed, brands that have traditionally relied on a wholesale model with department stores have missed out on a key aspect of selling: obtaining and analyzing customer behavior through data and buying patterns. He also points out how brands have historically relied on more traditional metrics like PE ratio, but the metrics for success today are different. How value is defined in today’s world is substantially different for brands than it was even a few years ago.