Pre-order can help to improve sustainability and guarantee sales, but will this model work for the mass market?
When actress and singer Jennifer Lopez stepped on to the Versace catwalk during the spring 20 edition of Milan Fashion Week last year, her appearance in an updated version of the green dress she debuted at the Grammy Awards in 2000 sent fans to luxury etailer Moda Operandi to pre-order it for just shy of £7,000. It sold out.
Moda Operandi’s “Trunkshows” let consumers pre-order catwalk pieces with a deposit. They are billed in full once their piece arrives from the designer at the retailer, which then dispatches it. Alternatively, curated “buy now, wear now” pieces are available later from its “Boutique” at full price.
“We take the guesswork out of buying, and as a result, we’ve found that once in our Boutique, bestsellers in Trunkshow have two to 10 times greater sales per item than Boutique inventory that is not informed by pre-season sales,” CEO Ganesh Srivats said in the spring 20 edition of its “Runway Report”. Published on the site, the report uses data gleaned from the behaviour of its customers, who shop a season ahead, to predict trends and key pieces.
Moda Operandi’s results hint at one of the advantages of pre-order: it allows retailers to gauge demand before putting pieces into production. A pure pre-order model is also more sustainable, as only items that are wanted are made. However, pre-ordering brings considerable logistical demands, and requires customers to wait patiently for their orders – perhaps a big ask in today’s fast fashion world.
You end up taking on less risk as you see what the customer wants
Madeleine McIndoe, McIndoe Design
Luxury pre-ordering has become popular with customers seeking exclusivity and desirable cult products such as Gucci trainers or the Hermès Birkin bag.
Chana Baram, senior retail analyst at Mintel, says: “People want to get their hands on a specific item.”
Mintel research published in December shows that, of 1,033 people who had bought designer fashion items in the last three years, 52% agreed it is only exciting if it is exclusive.
Beyond cult items, pre-order is now being used by high-end retailers, such as End and LN-CC in the UK, and Milan’s Antonioli. At End, customers enter online draws for pre-order items from brands such as Nike, Adidas and Moncler. If they win, they are automatically charged the full amount and their item is dispatched. LN-CC, meanwhile, offers pre-order for new-season pieces from labels such as Off-White, Bottega Veneta and Maison Margiela.
Petah Marian, senior editor at WGSN Insight, says pre-order has been gaining popularity as luxury retailers try to understand the appetite for a particular trend or item and minimise product that ends up in Sales. She adds that “it allows businesses that offer a more edgy edit” to order directional items with confidence, “which drives excitement across the rest of the offer”.
At British men’s, women’s and children’s wear label McIndoe Design, owner Madeleine McIndoe puts new collections, which retail between £30 and £60, up for pre-sale with a small discount for a limited period of time months in advance of release to see what is popular, and orders stock accordingly.
“You end up taking on less risk as you see what the customer wants,” she says. “Sometimes it’s quite surprising what does well on the pre-sale.”
Sustainability is another key factor. UK swimwear brand Pursuit The Label, which uses recycled fabrics, introduced pre-orders last year, after a Love Island contestant wore one of its swimsuits, which caused stock to sell out overnight. It used pre-orders to deal with the spike in demand while restocking.
Co-founder Annabel Humphrey says: “It’s a win-win situation as there’s no dead stock,” explaining that the brand sells a mix of regular and pre-orders. “It’s definitely become more of a strategy for us, rather than just a pro-active response to the demand.”
Heiðrún Ósk Sigfúsdóttir, founder of eco-friendly Icelandic womenswear brand Dimmblá, discovered another benefit to the approach.
When she switched to using pre-orders last year, she also lowered prices: “I was able to negotiate with my producer and reduce the price for the consumer. Everybody benefits. I don’t have to keep stock, so there is no waste, and the consumer has the ability to purchase an environmentally friendly product.”
Amanda Curtis is co-founder and CEO of US pre-order fashion retailer Nineteenth Amendment and NAbld, a manufacturing platform that helps brands to produce items on demand in around six weeks.
Her aim is to give brands a sustainable way to bring products to market with less risk and waste. Last year she signed a deal with US fashion design competition TV series Project Runway to make winning looks from some episodes shoppable.
“Project Runway judge Nina Garcia is an adviser to our company,” Curtis says, and “saw an opportunity to bring designers’ work to life and into the closets of fans”. The sustainability of the model was an important factor for the show and its TV network.
The challenge was getting items delivered in just six weeks but Curtis says the company achieved this through its own technology and network of tech-enabled manufacturers. NAbld provides a custom-built system that helps manufacturers to reduce lead times by streamlining communication, and organising and standardising tech packs, and other areas of the manufacturing process.
The challenges are around brands and retailers correctly assessing a customer’s appetite for delayed gratification
Petah Marian, WGSN
Nevertheless, despite being integral to the model, the waiting period for pre-orders can be a drawback.
Pursuit The Label’s Humphrey cautions that once the customer has an expectation of delivery time, it is essential that a brand is responsive and keeps them informed if delays occur: “There could be delays with the factory or the fabric. There are a lot of processes that need to come together to meet those lead times.”
WGSN’s Marian adds: “The challenges are around brands and retailers correctly assessing a customer’s appetite for delayed gratification. They also need to ensure that they have the necessary brand aspiration that means a customer would be interested in waiting for a product.”
Curtis believes that Nineteenth Amendment has proven the pre-order model can work for brands from all sections of the market.
“We’ve worked with luxury fashion brands to larger, more mass-market brands,” she says. “Project Runway reaches an estimated 3 million people a week who can shop via pre-order [with us]. This once ‘luxury’ business model is already reaching the everyday shopper.”
However, she warns the model is not as easily scalable without a “plug-and-play supply chain” such as NAbld’s, as starting from scratch could take 10 to 15 months and around $50,000 (£38,400) in personnel costs.
Mintel’s Baram is also doubtful pre-order can work on a large scale, as “lead times would be too long and it would be too costly for a mainstream retailer”. But, she says, it could work for limited edition items or collaboration pieces “to create a sense of urgency and make customers feel they have something more unique”.
The pre-order model works best for luxury brands and retailers who have consumers prepared to wait. Smaller ethical brands are also benefiting from the sustainable advantages.
Whether it can be widely adopted by mainstream brands will depend on whether consumers are happy to wait for their purchases, instead of having the instant gratification to which they have become accustomed.