Bridal fashion, an $80 billion business
The global market for bridalwear will exceed $80 billion (€67.99 billion) by 2020, according to estimates from Global Industry Analysts. This is a sector where margins are high and consumers are willing to pay more, but is at the same time very complex due to market fragmentation; its coexistence with China and fast fashion; and a global decline in marriage rates. Then there are also the challenges of digitalisation and transformation to attract the customer of the future, all facing an industry that has its roots in tradition... and now also in social media.
2018 is a year marked by the royal wedding of Prince Harry and Meghan Markle, to be held on May 19. The event is expected to boost retail sales in the United Kingdom by £195.5 million (€223.6 million) over the four-month period between May and August, according to a forecast from research specialist Springboard. This will mean an economic boost of £500 million (€571.8 million) for British brands, Reuters has estimated, driven mainly by the tourism industry. And then there is the ‘Meghan effect’, which is really the icing on the cake.
Beyond the walls of Windsor Castle, bridalwear designers everywhere are looking at the bride-to-be for inspiration, and next season’s trends will inevitably be influenced by the “wedding of the year” - from London Bridal Fashion Week and New York Bridal Fashion Week, to trade events like Paris Bridal, Interbride Messe Gmbh in Düsseldorf and Sì SposaItalia in Milán, to Barcelona Bridal Fashion Week.
Digital and omnichannel, two essential strategies for the future
The sector’s main challenge is to transform itself fast and find a way to differentiate by focusing on omnichannel retail and developing a digital strategy centred on the idea of ‘the store of the future’. This is according to the study “The store of the future for millennial brides”, commissioned by Barcelona Bridal Fashion Week to IESE Business School professor Jose Luis Nueno.
“Millennial brides are the first generation of digital natives, which is disrupting the way shopping is done,” Ester Maria Laruccia of BBFW told FashionNetwork.com. “They browse online and make their purchases in-store. But the physical store needs to transform itself and adapt to the changes,” she continued. Whilst 10% of sales are now online and 90% in-store, the proportion is expected to change within the next ten years with the online channel accounting for 30% of sales. The remaining 70% is expected to continue to happen in physical locations.
By 2025, millennials and Gen Z consumers, including all those who were born since the beginning of the '80s, will play a leading role in virtually all weddings. “Bridal fashion stores have to set their course for this new business model,” said Nueno. Today, from the total number of brides who browse the web for a wedding dress, 75% register, 50% visit the store, 35% try on a dress and just 13% buy it. To increase this figure, the report recommends integrating new technologies into the physical experience, such as video walls, interactive digital signage, smart mirrors and virtual catalogues. Currently, just 6% of companies in Spain, the United States, the United Kingdom, Italy, France and Germany have a digital strategy - an approach that is essential according to Nueno.
“It’s time for the sector to embrace differentiation and digitalisation, and not only at point of sale but throughout the whole process of identifying and capturing consumers until a dress is tried on and purchased,” Nueno concluded.
Among the formats that are poised for success is the showroom, set to expand its range of products; the online channel which will become a tool for pre-selection before a purchase is completed in an experiential and omnichannel physical store; logistics, which will improve with the development of click-and-collection points, and the retail sector, set to experiment with the combination of online and pop-up spaces, as well as outlet and low cost formats.
The complexity of a fragmented market
Every year, more than 10 million couples get married in China and the country manufactures even more dresses, as 72% are destined for export. With 755,000 dresses produced per year, Spain cannot compete in volume with the Asian country, nor should it want to. “The difference between Spain and China is design and clarity,” said Laruccia of the only Western market where production is higher than domestic demand. The Spanish bridal sector turns over more than 1.3 billion per year and is the second largest exporting country in the world.
There are several business models in this fragmented market, from large international companies to small and medium-sized family firms, as well as small ateliers. Compared to other sectors, processes are slower and more complex, costs are higher and margins are more interesting. Meanwhile, tradition and the unique nature of the event confer greater flexibility when it comes to prices. According to trade publication Bride2b of Zankyou, in Spain, half of brides have spent or are willing to spend up to €1,750 in a wedding dress, while the figure ranges between €750 and €1,250 in the United Kingdom. Budgets seem to be higher in Italy, where 40% of brides are willing to spend more than €2,250.
As markets try to recover from years of economic crisis, mass consumption fashion chains are tapping into the bridalwear sector by creating collections that expire quickly and cost less, appealing to younger consumers who are familiar with online shopping. Kiabi, Asos and & Other Stories (part of H&M) are some of the brands that have introduced their own affordable bridal collections.
Europe is reaffirming itself as a solid and trendsetting market, with established companies like Pronuptia and Cymbelline in France, Nicole in Italy, Lohrengel in Germany, Ellis Bridals in the United Kingdom, and Pronovias and Rosa Clará in Spain. Across the Atlantic, David's Bridal and Justin Alexander dominate the United States, the largest market today. North America has also the greatest potential for growth for 2020, along with Brazil, Mexico, Argentina, Peru, Colombia, Saudi Arabia, Kuwait and United Arab Emirates. While designers of Lebanese background such as Zuhair Murad, Reem Acra and Elie Saab are leading the way in the Middle East, modern brides are looking at Europe for inspiration, which means growth opportunities for Western brands. Meanwhile, other European companies have defined the United States as a strategic priority, like Pronovias with the arrival of BC Partners as shareholder last summer.
To succeed, bridalwear companies must become leaders, increase their market share or beat their rivals. To this end, diversifying the offer with occasion wear, men’s suits and accessories as well as more affordable lines, and the integration of the online world become essential for the economic success of the sector.
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