Topshop has long been considered the pinnacle of cool young fashion on the British high street. With its high-profile fans, a spot on the London Fashion Week schedule and frenzied teen following, for years Topshop has been at the cutting edge of young fashion retailing.
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Competition from digital and fast fashion brands, changing consumer priorities and an experience-hungry “generation Z” market are challenging Topshop’s top spot.
In an intensely competitive sector, the battle for the top spot is tough. Fast fashion brands such as Boohoo, Very and Missguided are growing at lightning speed, and high street brands such as Primark are rapidly upping their fashion offers to compete with Topshop, drawing away some of their core consumers.
“Topshop has lost some of its market share,” says independent retail analyst Richard Hyman. “It’s a very competitive market and this segment has always been very fast paced, with the likes of River Island and H&M competing strongly.”
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As more low-cost brands target the same fashionable consumer, the battle for differentiated product has never been more important, and this is one area in which Topshop appears to be struggling.
“Topshop has become a little less distinctive,” says Hyman. “Its handwriting has become more muted.” He believes this is as a result of the brand’s focus on the US market, which may have fuelled growth, but has negatively impacted on product. “Topshop has lost some of its edge and I suspect that’s because it has been trying to please the American market, which is less fashion forward. It’s had to dumb down a bit. It’s very subtle, but that means it’s lost some of its edge in the UK.”
Bernadette Kissane, apparel analyst at research company Euromonitor, agrees, and sees this as reflective of a wider trend on the high street: “It’s been a conversation that’s been going on a little while in the industry. It’s not overly innovative or risky any more. It’s all commercialised,” she explains.
Topshop has not done as much as it could have to nail the athleisure trend, believes Kissane: “With the move to athleisure, consumers have become far more accustomed to the functionality of the product. Fashion brands like Topshop have real trouble keeping up with the likes of Nike and Adidas, who plough resources into research and development. Traditional apparel is being paired with technical aspects of sportswear, the athletic DNA is moving into all apparel. Topshop has the Ivy Park range but sales were perhaps lower than expected.”
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As consumer attitudes change, Kissane also highlights Topshop’s slow uptake on the potential of the experience-orientated generation Z: “Experience is the new social currency, and I haven’t really seen Topshop do anything unbelievably innovative in that sense. When you consider its target market, the experience aspect in store appeals to that generation and I haven’t really seen Topshop take the lead in the way we maybe would have expected.”
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Rather than falling behind, however, Kate Ormrod, senior analyst at GlobalData Retail, believes other retailers has have caught up with the market leader, and warns of the danger of becoming overly assured of market position: “While Topshop has a strong UK reputation, it can’t let itself be complacent. It needs to actively compete for shoppers’ spend and continue to innovate to win market share.
“Enhancing the in-store experience will help – and to some degree Topshop is doing this with wellness events and exercise classes in some stores – but it can always do more to drive footfall.
”Shoppers in youth fashion are demanding and disloyal. There’s so much more choice on the high street and online now, so garnering that loyalty with shoppers is vital.”
One way Topshop is aiming to push the “experience”, is through premium sub-brand Topshop Unique’s shows at London Fashion Week.
Anika Islam, founder of denim brand Wåven, which is stocked in Topshop online and in the basement of the Oxford Street store, believes this helps create that much sought-after buzz: “I do think Topshop Unique and the shows they do are ground-breaking. The level of attention it gets is the same as premium designers, which is really different to many high street retailers out there.”
This may help to win over generation Z: during London Fashion Week last week, Topshop topped the league of social media interactions, beating Burberry, JW Anderson, Vivienne Westwood and all the other labels on the schedule.
The power of Topshop’s reputation is still huge, and for Wåven, has been hugely beneficial, says Islam: “It’s not just about making the sale – it’s about having the presence in store and picking up a whole new demographic because the footfall in that store is so large. Being in the store definitely fits in to who we are and promotes the brand, there are really established brands down there with us.”
Yet Topshops will need to up its game in every aspect to maintain its top spot, concludes Ormrod: “It needs to better explain its point of difference to shoppers. That is how retailers will succeed over the next few years as womenswear volume growth will be muted.”
Topshop may be facing a fight to stay a customer favourite, but it is still very much in the ring.