Consumers Invest in Fashion Plus Function for Repertoires of Brands

Apparel converges with technology

Apparel led all categories in growth of overall brand value, with an increase of 29 percent in the BrandZ™ Top 100 Most Valuable Global Brands 2014, following a 21 percent improvement a year ago.

Consumers eagerly purchased apparel, but they sought value, investing in brands that offered style with durability plus function. Mid-priced brands informed by high-end fashion prospered.

Less concerned about projecting an image with logos, consumers focused instead on how brands could make them feel more confident and discerning. Brands aimed to be part of the repertoires of affordable options consumers purchased for various occasions.

Post-recession smart consumers matched wits with brands over pricing. Rather than purchase at the beginning of the season, consumers waited to buy on sale. Merchants launched sales earlier and deepened discounts as time passed, adjusting prices rationally, to encourage purchasing while protecting margins.

The slower pace of economic expansion in fast growing markets impacted the apparel category, particularly in China. Slower growth, combined with increasing international competition, rising labor and raw material costs and excess inventory, formed a perfect storm that hurt business results and brand values.

The fast growing markets led the way in the use of ecommerce and social media, however, while in developed markets, sites like Tumblr enabled consumers to share information and feel informed. Indicative of the growing influence of apps in the apparel category, an app called Tapestry provided a virtual bulletin board, similar to Pinterest, along with an option to purchase.

A UK-based app, called ShuffleHub, emphasized the emotional aspect of shopping, enabling online shoppers to browse across stores and brands to replicate the dreaming and exploring aspect of shopping. These other trends also impacted the category:

  • Loyalty
    As ecommerce drove an exponential expansion of choice, brands needed to work harder at cultivating loyalty. But a good brand experience could make the difference.
  • Localization
    Technology enabled brands to tailor their communications for diverse audiences and geographic locations.
  • Wearables
    Technology and apparel continued to converge, and brands met consumer needs for clothes that suited their healthy and active lives. Google announced an operating system called Android Wear to drive innovation in wearables.

Apparel brands with technology rise in value

Nike’s brand value increased 55 percent. With the tagline “Find your greatness,” Nike used social media to inspire a culture of activity and achievement. The brand has succeeded in building communities of consumer and brand advocates around this larger purpose. Nike refined its FuelBand. The bracelet, which measures calories burned, pioneered the intersection of apparel, technology and community.

With a brand value rise of 47 percent, Adidas enjoyed the momentum gained from its sponsorship of the London 2012 Olympic Games and introduced products related to its sponsorship of the 2014 FIFA World Cup in Brazil. The brand introduced a new shoe cushioning innovation it calls Boost technology.

Uniqlo also integrated apparel and technology, with fabrics engineered to keep heat in (Heattech) or let air out (AIRism). On the promise of delivering apparel staples that are fashionable, functional and affordable, the Japanese brand has built a global presence, with around 1,300 stores in Asia, North America and Europe. Uniqlo rose 58 percent in brand value.

Heritage and fast fashion

The UK-based brand Next reached its core customers, women in their 30s or 40s seeking accessible fashion, with product range, price, service and reliable and quick delivery. Next operates around 500 stores in the UK and Ireland and is present with over 170 franchises in 35 countries. It also maintains online and catalog businesses. The brand exemplifies how high-end fashion informs High Street. Brand value rose 39 percent. Along with its basic H&M brand, H&M promoted its & Other Stories and COS (Collection of Style) brands, which provided a three-tiered offering. With the added brands H&M widens its appeal while retaining its base of younger consumers as their tastes and income levels evolve. In August 2013, H&M launched ecommerce in the US, where it operates approximately 300 stores, its second largest market after Germany. Zara, rose 15 percent in brand value based on the success of its fast-fashion formula, with around 1,900 stores in 87 countries.

Making brands accessible

With evolving attitudes about what constitutes masculinity, more men feel comfortable with fashion and color. This trend, and international growth, helped propel brands like Ralph Lauren, Hugo Boss and Tommy Hilfiger, which appears in the BrandZ™ category ranking for the first time. Young families fueled the strength in children’s wear.

Top Shop and J. Crew, competitive brands that don’t appear in the BrandZ™ ranking, demonstrated clever ways to make brands accessible. Top Shop streamed its London Fashion Week catwalk fashion show and, through a partnership with Google, made it interactive. J. Crew preceded its debut in the UK with a pop-up store in London.

The death of more than 1,100 workers in the collapse of the Rana Plaza apparel factory, in Bangladesh, underscored the challenge for brands attempting to meet a competitive price point while at the same time manage supply chains responsibly. For some brands, like Patagonia, social responsibility is at the core of their appeal. All brands felt pressured, however, to meet growing consumer concern and interest in product provenance.

The experience of Lululemon demonstrated the vulnerability of a brand that fails to meet its promise in the age of social media. Having rapidly developed a brand that stood for fashion and functionality in clothing for exercising, the brand stumbled when the stretch fabric of some of its products performed poorly and the company initially blamed customers for the fault.

Action Points

Keep the promise.

The convergence of apparel and technology will expand the possibilities for product performance. For brands that means more opportunities to excite consumers – or disappoint them.

Signify quality.

Whether the logo is visible or hidden inside on the label, brand assures customers that they’re buying a quality product that makes them feel discerning.

Do digital politely.

Observe appropriate etiquette in social and digital. Don’t join a conversation uninvited, just to be present. You may generate resentment. Earn the right to participate. Don’t intrude. Comment when it’s appropriate and authentic.

Apparel Up 29%

The apparel category is comprised of mass-market men’s and women’s fashion and sportswear brands, but excludes brands viewed by consumers as luxury.

BrandZ Top 100 2014

BrandZ Global 2014 Report Top 100 Report

Top 100 Chart

Top 100 Infographic

Methodology and valuation by Kantar Millward Brown

Contact Us