The Googlization of the garment industry

First the big national book retailing chains buried the traditional neighborhood bookstores. Now it appears that Google, Amazon, and the other internet giants are about to bury the big national chains..

There are some lessons here that we in the garment industry would do well to learn

1 The pre-internet business model is failing.

The old paradigm that retailing books is all about retailing and books is gone. It is being replaced by a new set of rules stressing computers, data, logistics and interactive programming.

2 Success is all about giving the customer value, and that value is defined by the customer, not the retailer.

The traditional neighborhood bookstore failed, when the big national chains began to provide greater value: access to greater variety of books at lower prices with better ambience as defined by Come to our store. Read the book before buying. Have a cup of coffee

The big national chains are failing because Amazon provides even greater value: access to virtually all the books in the world at even lower prices, with even better ambience as defined by Stay home, relax and let us suggest books that you may like based on your past purchases.

Interestingly the single greatest impediment to internet sales never materialized. The experts have been telling us that consumers are addicted to instant gratification and therefore would not wait days between buying and having. The fact is, Amazon customer will wait ten days and even longer to receive their purchases.

On the other hand, not all bookstores have failed. Some of the smallest and most traditional bookstores are flourishing in the new internet market. Their advantage goes something like this:

If you want to buy a book about classical Chinese painting, you should go to amazon.com. If you want to buy Chinese Painting by Osvald Siren, the definitive work on the subject, you have to go to hanshanhost.com or paragonbook.com where the original 7 volume 1956-1958 work — the one with the 867 good plates — is available for the knockdown price of $725.

Here too there is a lesson for us. It would appear that there will always be a place for the niche market. The narrower the niche the greater the internet benefit.

Nothing lasts forever. Book professionals have been retailing books since 2060 BCE, when the legendary Atrahasis the Macher opened his cuneiform clay-tablet emporium in greater metropolitan downtown Ur. After 4000 years the run of Atrahasis the Macher and his progeny is about to come to an end.

The question is, will the same fate befall the clothing retailer?

To succeed, the internet giants must offer greater value than the clothing stores. Unfortunately, given the nature of our industry This may not prove to be difficult. Here are some of the obvious areas where the internet giants can provide meaningful greater value:

· Lower Prices: Retail clothing prices are currently 6-10 times first cost, with 66%-75% going directly to the retailer. Google can certainly offer something better at half the price.

· Unlimited styles: Today retailers offer a very small ever-decreasing range of styles with most limiting themselves to a single range private label operation. Google can offer styles from literally thousands of designers.

· More up-to-date design: Most stores require 40+ week lead times from first design to in-store garment delivery. As a result the best they can offer is last year’s design. Google can work on 5-8 week cycle. They can offer the latest designs now.

· More interesting style: Today the niche designer stands little chance of finding a market for his clothing. Google offers that designer a global market, where an infinitesimal market share is more than sufficient to ensure a successful business.

· Better Ambience: Interactive programming allows Google to show you styles based on your previous purchases, in the comfort of your home. They will notify you when the latest styles are available from your favorite designer. If you are looking for a navy cashmere sweater for less than $100, Google will show you literally everything available in the product and price of your choice.

Google, Amazon and the internet giants enjoy two advantages over the traditional clothing retailers

1. They already own the market. They have only to pick the product.

2. They recognize that to succeed they must provide their customers with greater value. They treat their customers better and with greater respect.

Given the google advantages, coupled with our self-imposed disadvantages, the clothing retail industry is an all too easy target.

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