How Ugg Turned a Fashion Trend Into a Staple
Ugg boots emerged in the 1970s amongst Australian surfers, who embraced them as a comfy and warm post-surfing footwear fix. In 1995, Brian Smith sold the brand to US footwear company Deckers Outdoor Corporation for an estimated $14.6 million.
Ugg is certainly Deckers’ star brand, currently accounting for 84 percent of the company’s overall revenue. At present, Ugg’s business is largely driven by the US market, where the company does 70 percent of its sales. Ugg has pushed the comfort proposition of its core product into other product categories, including homeware, loungewear, slippers, sneakers, heels and men’s and children’s footwear, as well as lower-cost and premium versions of its original boot.
Diffusion Lines Becoming A Thing of the Past
Second-tier “diffusion” lines like Emporio Armani, D&G and Marc by Marc Jacobs, which combined the halo of a designer brand with more accessible fabrications and lower price points, grew to become crucial channels for increasing awareness, recruiting younger consumers and generating reliable revenue streams. But recent shifts in the market have since put significant pressure on the concept of diffusion lines. Diffusion lines, which once dominated the middle market, must now contend with the rise of accessible luxury titans like Michael Kors and Tory Burch, both of which position their more affordable offerings as genuine mainline product. As a result of these pressures, many fashion companies have reformulated their approach to diffusion lines. Prada Group, for one, chose to reposition Miu Miu, once a secondary line, as a sister label to signature line Prada. Others, such as Michael Kors and Burberry, have shuttered some of their diffusion lines altogether, notably Kors by Michael Kors and Burberry Sport.
In the long run, diffusion lines that can strike the right balance, may well survive. But for most fashion brands, assimilating lower-priced product into signature lines may make the most sense. Indeed, it’s becoming increasingly difficult to justify diffusion lines which confuse customers and drive up costs.
Retailers Customize Shopper Experience
Many fashion e-tailers, better able to monitor the behaviour of individual customers than ever before, are now harnessing this data to personalize the customer experience. Net-a-Porter has paid close attention to the data its customer-base is willing to share with the company, building research teams that analyze customer surveys to capture valuable feedback and customer insights. Net-a-Porter has begun using a combination of surveys and behavioral data to offer each customer an individualized experience. In email content, for example, the company is able to market to you new products around designers that you’ve signed up for, bought and also products we think you might like.
Retailers are also beginning to target their online advertising to individual consumers. No two individuals have the same wants or needs. Techniques such as landing page customization, search re-marketing, dynamic display re-marketing and targeting in social platforms using real-time data insights are all used.
– Selicia A. Walker
Source: Business of Fashion