With the domestic market in doldrums, major U.S retailers and brands have been looking toward international sales to boost the bottom line. One strategy that’s beginning to pay off is customizing fit for local shoppers and going after the hip, trendy crowd in Asia that does not hesitate to plunk down serious money for fashion-forward styles.
Brooks Brothers, in China for 11 years through a distribution partner, has seen sales grow dramatically in recent years, averaging 40 percent growth year-on-year.
Like other retailers, it has found that brand consciousness and perceived value are a major part of the Asian consumer mindset.
"The Chinese perceive value in exclusive and expensive items. Someone with low income will save up for months to buy one really high-priced bag or suit," says Andy Lew, Brooks Brothers' managing director for the Asia-Pacific region.
Asian consumers see price as a benefit, so it may be easier to sell pricier styles in Chengdu than in Chicago.
"We have customers who come in the store and wonder why an item is priced lower and ask if the store has higher quality styles. Their purses are large and they like to show it off," says Lew.
Jacob Uhland, general manager of Asia Pacific for outdoor sports gear retailer The North Face, also found strong demand for high-priced items. "We are constantly surprised with how many of our most expensive jackets are sought out. This past season we completely sold out of 900-fill super-premium down jackets." Uhland notes that many Chinese are “taking their first trips to other parts of China, like Chengdu, to visit national parks and to connect with nature,” which is pushing demand for outerwear.
Ed Gribbin, president of Alvanon Inc., a provider of fit solutions for the apparel industry, recounts a story he heard from Kitty Yung. Yung was general manager for Levi Strauss in China when the brand launched its stores there and was instrumental in setting its pricing strategy.
"They set premium price points, equal to the price of a refrigerator in China, around $300. For the first six months sales were terrible," relates Gribbin. "Levi had begun to question its strategy, when sales began to pick up. [What was happening was that] people didn't have credit cards; they paid with cash, so they waited until they saved enough to afford it."
Asia adds to bottom line
Brooks Brothers' $80 million in sales last year in Southeast Asia represents about 7 percent of its total revenues, a number that Lew says will keep growing as its penetration in Asia increases.
"Even though we’ve been in China for a while, we haven't been as aggressive as we could have been," says Lew.
He expects that by 2014, 15 percent to 17 percent of revenues will be from the Asia-Pacific region, with double-digit growth that outpaces U.S. growth.
The challenge with sizing
When it comes to sizing, no one size fits all.
To cater to local body types, Brooks Brothers has adapted sizing to cover extra slim fits, paying attention to details such as the need for shorter sleeve lengths.
But while the Chinese are more slender and petite in comparison to U.S. customers, there's wide variation in sizing within the country, with people from the north generally taller than people from the south, explains Gribbin.
"It's more than just shorter, slimmer. There are people in Northern China who are as tall as folks in Netherlands. Then there are people in parts of the south — Shenzhen, Dongguan — who are really short. China is a real melting pot, which makes it a challenge for an apparel company," says Gribbin.
Gribbin jokes about getting two kinds of calls — the "411" from someone looking to enter China who would like a unique fit, and the "911" from someone already there who is receiving complaints and struggling to adapt to the specific fit needs of the Chinese.
To cut through the confusion, Alvanon undertook a comprehensive body scan study two years ago, scanning thousands of people from different parts of China, and collected anonymous data correlating body measurements with people’s age, gender and where they come from.
"China is very migration-oriented, people come from rural areas to big cities. Shenzhen is a huge melting pot like New York City, so our data reflects that diversity. You can't go into China and say I only need three sizes. Not true. You need as many sizes there as you do in a European country," Gribbin explains.
Alvanon's study found that 40 percent of Chinese are petite, 45 percent are of average height and 15 percent are tall. As in the United States, the petite sizes are underserved, with very few Chinese retailers offering true petite styles.
Yet when one women's specialty retailer tried offering its U.S. petite sizes in China, it did not convert well, and the company ended up developing a completely new fit standard for China.
When such clients come looking to break into China, Alvanon looks at their target markets to analyze where they are missing opportunities. Recommendations vary, from subtle tweaks to dramatic changes.
"Body data is important, but it’s no good unless you know how to interpret it," Gribbin says. "We help brands maintain their integrity while adapting their products to different markets."
Brands such as The North Face and Nike have a particular look; Alvanon has helped these companies adapt their styles to local shapes, developing for them core sizes — in the forms of 3D avatar or physical mannequins — for the Chinese medium and small that take into account stature, crotch depth and other measurements such as front neck to waist, which tend to be different from those of people in the United States.
"Nike is meticulous about doing research and understanding their customers, and very process oriented. They do their homework before making changes, ensuring the product really does fit their end user. We probably did two years of research and analysis before they made any changes to their fit," Gribbin recalls.
Alvanon's findings have also served as a guide for other U.S. retailers seeking a foothold in China.
"We recognized that there was a need for a different sizing standard and strategy due to differences in body size and proportion. We worked with them to develop a new sizing standard for China fit," says Eric Tam, The North Face product manager for Asia Pacific.
U.S. brands employing a China strategy use Asian mannequins in their factories to assess fit, and then work to cover as large a swath of consumers as possible with the smallest number of sizes.
While athletic products with stretch or knitted string waists are more adaptable, a fitted woven product is not as forgiving. "There’s no one silver bullet, but it's easier to sell sportswear than formal wear," Gribbin says.
"Fit is the number one factor when it comes to brand loyalty," says Gribben. Clothes that don't fit get returned or sit in the closet unworn — and the consumer never goes back to the brand, he says. Although many companies do extensive research on demographics, lifestyle, number of kids and consumer habits, they don't always “take a snapshot of what the customer looks like." Exceptions to that trend are companies such as Mango and GAP, which Gribben says are two brands that have gone to great lengths to get to know their respective customers in China.
Carrying on its sizing studies, Alvanon will conduct a similar body scan project next year in India in partnership with Mumbai’s National Institute of Fashion Technology and several Indian manufacturers.
Gribbin explained that the Indian body type tends to be closer to its European counterpart, while the eastern Asian body type (including countries such as China, Thailand, Japan and Korea) has a wider width but is shallower front to back.
Asia serves as test market for new strategies before U.S. launch
While it is a top priority, fit is not the only area where American brands are making changes.
Although it's known for its formal suits, Brooks Brothers sells a lot more sportswear in the region — because most business executives don't wear suits to work — and has also added more outerwear to the product mix, including jackets and sweaters.
Lew admits this is a departure from the norm compared to five years ago and a definite change compared to 10 years ago. Interestingly, the push in sportswear in China has expanded the category in the United States as well. "We took the learning abroad and applied it here," he says.
That's a growing trend: Changes made in adapting to the needs of the Asian market are often reflected in the U.S. market.
"We add styles in China and Japan and then in the U.S. Asians tend to be more fashionable than customers here, so we’ll test things abroad before we introduce them here," Lew says.
Padma Nagappan is a San Diego-based multimedia business reporter.