High-end fashion embraces DTC in sign of coming purge

Some of the most prestigious, high-end fashion brands are moving into direct digital sales for the first time, according to Digiday, as the coronavirus crisis continues to upend long-standing practices in retail.

This isn’t a surprise, per se. Venturing into stores today can feel like a walk through the valley of the shadow of death. High-end shoppers are no more interested in that sensation than are dollar-store devotees. Yet the fashion world must find a way to sell. So high-end brands that could once be found only in the most exclusive stores are moving rapidly into direct-to-consumer (DTC) sales.

According to Digiday, the collapse of department stores and the absence of Fashion Week are driving high-end fashion companies to embrace Web sales, particularly through Instagram, which “has positioned itself as the next generation department store.”

In fact, things have changed so dramatically for high-end fashion, Digiday says, that some top brands are now also venturing into the previously forbidden zone of “selling on Amazon” and offering “sales and promotions.”

All these may prove to be wise moves for the top-tier fashion companies. But they could also prove disastrous for brands that sell far less expensive items to far less affluent customers.

Here’s why:

At <intent> we’ve been warning for months that the coronavirus-driven rush to digital sales is putting upward pressure on digital ad rates. Traditional retailers, omnichannel players, and now high-end fashion players are all throwing dollars at the same time at the same sites at the same people. We think this will lead to a purge of companies unable to compete in such a fierce environment. And the latest data suggests our predictions are coming true.

There are only two ways we know of to compete in an environment like this:

  • have enormously deep pockets so that you can handle paying too much for a long time, or
  • use every possible tool to develop more sophisticated approaches to customer acquisition, ad retargeting, etc.

If you’re not in that enormously deep pockets category, we should talk. We offer a product called <intent> Target that adds a layer of machine-learning sophistication on top of your marketing efforts. It is exactly the weapon you’ll need in the fight to come.

Interested? Just drop us a line at predict@intent.com and we’ll make it happen.

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