In December last year, Tommy Hilfiger chief brand officer Avery Baker told an audience at the Business of Fashion’s Voices event of the rapid pace of change driving the consumer fashion industry and how the notion of ‘See Now, Buy Now’ has allowed businesses such as her own to keep up with and overtake the competition.
Baker has been at Tommy Hilfiger for nearly 20 years, having joined the brand in 1998. She describes her time there as an incredible journey “because in my experience on average almost every five years the brand and business has gone through some kind of significant evolution or transformation”, from “going from public to private, or back to public again, or needing to think about consumers outside of America.”
An American brand with international reach
While its roots are very much in the US, Tommy Hilfiger is a business with a broad international reach, with 50% of sales generated overseas.
It has concessions at major department stores across the globe as well as more than 1,800 retail stores in an extensive distribution network in over 100 countries. In 2006, the brand was bought by Apax Partners for a reported $1.6bn, while in 2010 it was acquired by PVH for approximately $3.0bn.
Tommy Hilfiger was founded in 1985 by the designer of the same name. Today the man Mr. Tommy Hilfiger is still the brand’s principal designer, overseeing design teams and creativity in the business.
“It’s been a great run because Tommy as an individual and a visionary is not someone to stand still,” Baker says. “He and we are all extremely inspired always by what’s new and what’s happening with the new generation in this world.
“That’s the incredible momentum and energy that keeps pushing us to evolve and find ways of staying true to the core DNA of the brand and find new ways to express that in a way that feels relevant. So it’s a challenge but a really exciting one.”
See Now Buy Now
Baker stresses that Tommy Hilfiger has always been a brand about “inclusivity”, about “being aspirational but still accessible”, emphatically not about the “exclusivity and snobbery that you see very often in the industry and at the premium end of the market.”
Its open approach to consumer fashion has led to the brand “pulling back the curtain” on the likes of fashion shows, where goods unavailable for purchase until several months later are only displayed to an audience of glitterati.
“It’s a system that makes it very, very hard to be immediate for consumers,” Baker says. “The typical cycle is that brands design a collection and they show it six months before anyone can even find it or buy it.”
It’s also a system that had the likes of Tommy Hilfiger asking: How do you close that gap? “Because it’s starting to feel increasingly really out of sync with how people are behaving today in all other parts of their lives,” Baker says.
But technology and the roving eye of social media has allowed Tommy Hilfiger to close the gap by some margin and begin to democratize its business.
It’s a somewhat hackneyed term, but the adoption by fashion brands of a “See Now Buy Now” business model has revolutionized the industry.
The advent of “See Now Buy Now” came about crucially from a realization that a major shift in consumer behavior and expectations brought about by technological advances needed to change the dynamics of the fashion industry.
However, to so fundamentally remodel a business clearly does not come cheap, requiring restructuring costs of some magnitude, as well as a new mindset.
A case in point: last year, Tommy Hilfiger’s TOMMYNOW touring runway show included the construction of a Tommy Pier in downtown Manhattan in September replete with ferris wheel, tattoo parlour and more than 10,000 weekly guests over the weekend, while a TommyLand music festival in Los Angeles in February 2017 featured a funfair, musical acts, and boutiques displaying the runway collection and accessories available to buy immediately online.
While expensive to run, TOMMYNOW is paying dividends. The Manhattan pier show resulted in a 60% increase in sell-through and 900% hike in web traffic, with 70% coming from new visitors to Tommy Hilfiger’s website.
“See Now Buy Now” also helped parent PVH Corp.’s 2016 sales, which were up 4% in 2016.
As fashion brands invest more into e-commerce through methods such as “See Now Buy Now”, and as larger numbers of customers buy online, businesses such as Tommy Hilfiger will be privy to greater swathes of increasingly more granular data.
While it offers a pool rich in potential customer insight, the sheer volume of data can present challenges, Baker admits.
“One of the challenges that we and many companies face today is, with all of this data coming in, actually having the right capabilities to access it and analyze it and use it,” Baker says.
It means that the company is looking at how best to analyze and use that scale of data going forward. Selecting which technologies to use is also a challenge, and again one pregnant with possibility.
“Often our decision processes are based on understanding where pain points are and how can we really test different things to relieve those pain points,” Baker says.
“For example, we have a network of Digital Showrooms — we’re really leading the way in B2B, selling our collections to our retail partners and we want to be doing that completely digitally in a matter of a few years, and we’re well on our way to doing that.”
Moving forward fast enough to not merely keep up with, but to leave the competition behind, requires constant innovation, some of which will admittedly fall by the wayside.
But one area that has been of great benefit to the business, to a surprising degree, is the use of an AI-powered bot on Facebook Messenger, named TMY.GRL with Tommy Hilfiger the first brand to use it.
“We were really surprised at the results,” Baker confesses. “We didn’t expect hardcore KPIs for that, so I think out of the gate it was a bit of an experiment. People were spending almost five minutes interacting with the chatbot and we had something like an 87% return rate.”
For Baker, how that benchmarked against time people normally spend interacting with the brand digitally was “very promising” and gave a clear indication that “people really are hungry for an experience that combines service and entertainment and commerce all in one”.
3D moving image recognition
There is a raft of other applications that are piquing the brand’s interest, one being centered on image recognition.
“It’s an image recognition commerce app,” Baker explains. “What that means it’s actual 3D moving image recognition. You hold up your phone, and in this case if you’re watching the show and you like that sweater and you take a picture of it, or if you’re walking by the window of Selfridges and there’s a video playing in the window and you take a picture of the piece you like in the video, the app can immediately source where the product is from and connect you to the sitetommy.com to be able to buy it basically instantaneously.”
While Baker acknowledges that moving image recognition software is already proving exciting and is “probably going to be something we see a lot of in the future” for “retailer agnostic” consumers, the technology that “we’re really most interested in, as everyone is, is AI”.
She is particularly drawn to its powering of chatbots, creating “conversational commerce and even things we want to do on our own website in a traditional way”.
“I think the development of AI and that intelligence is going to be for every industry a really interesting thing for everyone to keep an eye on,” she says.
For Baker, the future of fashion e-commerce is tied to the notion of personalization. It might be “hard to say” how consumers are expecting apparel brands to personalize experiences, but “we believe that the expectation levels are increasingly growing because of the benchmarks that are being set outside of the fashion industry”.
“There are incredible companies out there today that are more and more service oriented,” she says. “I think the fashion industry is a bit slower to catch up and use technology to be as service-oriented as in other industries.
Baker is patently enthused about the marriage of technology and service, but sounds a warning note: “It’s only a matter of time before the consumer decides that they don’t want to wait anymore for this industry to catch up.”