Last night we hosted our second FashTech Talk at Shoreditch House, on the topic of “Brands After Brexit”. Our expert panel consisted of Heidy Rehman, Founder and MD of Rose & Willard, Jerome Laredo, VP EMEA at Lightspeed POS, Petah Marian, Senior Editor Retail Intelligence at WGSN, and was moderated by William Hutchings, Former Head of European Consumer Luxury Goods at Goldman Sachs.
Will kicked off the discussion by first explaining that to draw a definitive conclusion at this moment in time on the repercussions of our Leave vote is virtually impossible. So instead, he asked for examples of the immediate impact, and what it may mean for the coming months. To begin, he asked, when considering the retail and fashion worlds, what do we think is the immediate impact of Brexit on the consumer?
Heidy explained how for her personally, at Rose & Willard, she saw a huge spike in overseas orders, which was arguably to be expected, but perhaps more surprising, was that she saw no decline in British orders. Heidy explained that this may be due to our country’s current impressively low unemployment rate. Whilst the pound may be weaker, the impact of inflation is yet to slow things down so, for now at least, people are still out there spending. This is a chance to be opportunistic, she said. As a British made product, now is a great time to use the post-Brexit repercussions to ones advantage. However, the long term game isn’t as straight forward. Our panel explained how British brands will ultimately have to lift prices when manufacturing costs rise, but can they really pass this increase on to the consumer? Not really; it’s a hit that the retailer will have to take themselves, sucking up the margin. Hence the need to better our internal manufacturing; a topic that we cover in more detail slightly later in the conversation. For now though, Jerome is adamant, it will be business as usual, taking at least 10 years for the reality of Brexit to really start affecting the retail business as we know it. Regardless of this though, he argues, retail brands must always be ready for uncertainty, and what this might mean for your customers. How do you continue to attract your consumers in a tumultuous climate? Brexit or not, brands need to put their consumer first and recognise and adapt to their changing needs.
In terms of the implications for the brands themselves, Will asked, who do we think are the winners in this situation, and who are the losers? “Brexit gave Britain a lot of publicity, you know. Everyone’s been talking about us, there’s been an awful lot of awareness, and that we could see as a short term positive. All publicity is good publicity!” Jerome said, of which Heidy concurred. There is currently a vast and genuine interest in British made brands and British products, she said, but this ‘hype’ isn’t sustainable. This is the immediate post-vote furore, which will die down and leave us with a challenge.
One way in which we can try to seize this opportunity and make the positive last, is to harness the consumer’s growing desire for fast fashion. Social media has made us all want everything the minute we see it. “See-Now-Buy-Now”, which is making the global supply chain “unworkable”, meaning a chance for us to start bringing the supply closer to home; an opportunity to start seeing more manufacturing in the UK, supplying for the demand of immediate gratification. However, this leads us on to the topic of Brexit’s focus on anti-immigration. It has been such a key topic in the ongoing political parties’ debates, and if we are to start losing migrants back to their home countries then the fashion and retail industry is going to be one of the worst affected in the UK as so many skilled labourers are migrants. The influx of creative talent and low-cost skilled labour will suffer hugely, because young British workers do not have the same level of skills. We are not brought up in an environment that encourages these skill sets or career paths. If we are to maintain the same level of manufacturing without the employment of European workers then the government is going to need to plan a serious PR campaign that changes the way in which these industries are viewed and made accessible to the younger generations.
Some may argue that this conversation will become irrelevant in the not too distant future anyway, as we won’t even need people to work in these sorts of roles because we’ll have machines who can do the work for us. Is this a realistic expectation? Technology is indeed having a very broad and disruptive impact on the fashion industry at the moment, but it’s been exciting for both brands and consumers along the way. Do we see Brexit as a catalyst for further change? New amazing creations are often born out of periods of real disruption, Petah explains, so by all means this period of unknown and transition brought on by Brexit may well lead to the “next big thing”. “Absolutely,” agreed Jerome. “Disruption creates creativity. You have to think harder to survive and thrive.” Will asked our panel if they could name any examples of exciting and important new technologies that might be helping to shape our post-Brexit future, and Heidy named virtual reality as one; “it’s going to be transformative - will catwalks continue? Or will we just be sat at our desks watching what we want to see, manipulating the shows to see models in any brand we choose, putting ourselves in outfits virtually, trying on looks?” And from a manufacturing perspective? Robotics, she said, which we’ll be able to use to localise costs and help with time to market. It may displace human capital, but it is inarguably an amazing advancement in tech innovation.
Jerome also agreed that VR will become part of everyday life, because it provides an experience and, nowadays, experience is essential. Petah, meanwhile, believes that whilst VR will be huge in the long term, augmented reality will be more impactful in the short term. We haven’t been aware of AR for long and yet already, one app (in the form of Pokémon Go) has completely changed the consumer attitude towards it and its possibilities. Currently, when you shop online, 50% of purchases are returned, which is obviously a huge problem for retailers, and very expensive. But if you can make sure a customer knows how a product is going to fit before they order it, then you can solve the problem.
So is Brexit going to vastly affect the UK’s fashion industry in our foreseeable future? Not really, according to our panel. We will continue to disrupt the fashion and tech worlds just as we have been in the lead up to the Leave vote, and whilst we may have a little bit of damage control to do for “Brand Britain”, it’s looking like it might be some time before we start to see the repercussions of our exit from the EU. It may have given the other English speaking centres of the fashion world, such as New York and LA, a little window of opportunity to capitalise on our time of uncertainty, but we will hopefully manage to maintain our booming fashion industry which is of such great importance to the British economy.
Thank you to our sponsor, Lightspeed, for their involvement in last night’s event.