The New Innovations Making Department Stores Irrelevant

Will traditional department stores as we know them become irrelevant to the fashion world? The founders of some fashion startups say that it is becoming easier than ever to take fashion brands directly to the consumer. This can be done with business models, such as subscription, as well as with various mobile apps that consumers can keep up to date on the latest trends.

Rent the Runway has opened the door to new shopping experiences for customers. One of the ways is subscribing to receive items monthly. Chief executive and co-founder of Rent the Runway, Jennifer Hyman states that “A huge part of our business is subscription.”  Though the subscription service was launched just last year, the company has been in business since 2009 and has nearly 5 million customers.

Companies are also combining the use of physical stores with their online and subscription models to help reach customers directly with new brands. This effectively negates the necessity of sharing margins with multi-brand stores or malls. Rent the Runway, which has multiple physical stores, is just one example of this strategy. The stores were opened after the launch of the e-commerce platform and witnessing the success of physical stores launched by other brands such as Warby Parker with the eyeglass startup.

Subscription companies like Birchbox, with its beauty items, Netflix, for movies, and ClassPass, for workouts, have paved the way for consumers to embrace new ways to buy things and new ways to have them delivered. The innovative new mobile app Spring gives vast numbers of fashion brands the opportunity to display, as well as sell, their products within the app. With the development of these, as well as other innovative methods, startup founders maintain that multi-brand retailers are becoming less of a necessity than in the past.

Previously, one aspect that made department stores necessary was the exposure that they gave to new brands. In the technologically connected society of today, the exposure that they once offered has become less relevant to sales. A large portion of new product discoveries are now being made via Pinterest for women and Instagram rather than in stores and malls. These social media platforms serve as virtual catalogues and virtual malls for women around the world today.

Similarly, the Spring mobile app aids consumers in the discovery of products from a multitude of brands. In addition to discovering these items, the brands themselves manage not only the shopping experience, but the packaging as well as shipment of their products. This is something that isn’t possible with department stores.

Chief executive and co-founder of Stowaway Cosmetics, Julie Frederickson, believes that these new models are bringing about the “end of wholesale.” By being enabled to directly reach consumers, new companies are able to avoid the inefficiencies inherent to the wholesale fashion business. Ms. Frederickson went so far as to say that if a company such as Sephora offered to distribute her cosmetics she wouldn’t hesitate to reject the offer.

Will traditional department stores become irrelevant? Probably not in the near future, but with the age of technology in full swing, consumers have more choices than ever before when it comes to how and where they shop.


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