Crowdfunding and Crowdsourcing Fashion
In one of our previous posts we highlighted some of the challenges that aspiring fashion designers encounter when starting up their businesses (you can find the full article here). To sum up, here are the top three problems:
INITIAL FUNDING – FORECASTING DEMAND – GETTING PRE-ORDERS
Let’s be honest, the fashion industry does not take full advantage of the advancements in IT, and the designers have to be very creative to overcome their challenges. Many resort to major online marketplaces to sell their creations. These work for designers offering custom made products – and they can sell one item at a time based on customer’s requirements. On the downside, the designers can’t source materials in large quantities because of the unpredictability in demand and they end up sourcing expensive supplies and pass that cost to the buyer. Furthermore, it is very difficult for the buyer to find a particular designer as these marketplaces become more like a universe of everything for everyone (For example, Etsy reportedly has over 800,000 active shops).
What we’ve recently noticed is that independent fashion designers are now appealing to the public to support their businesses and they do it on crowdfunding websites. Still, the fashion category on Kickstarter has the lowest success rate. We believe this is because the existing crowdfunding platforms don’t make for an elegant e-commerce solution. Consumers can’t really shop the designers’ products, but rather “donate” in return for different types of rewards. Crowdfunding works for fashion retailers that sell single products (such as the super-famous pebble watch); however, they don’t work as well for fashion designers that sell multiple products.
Finally, a lot of new designers try crowdsourcing their designs, which takes care of the second obstacle they encounter – forecasting demand. By using a voting, liking and sharing system you can learn from your potential buyers more than if you were to investigate yourself. You can choose to produce only the most popular products or modify your collection based on consumer’s feedback. Still – desirability doesn’t necessarily translate into orders, as the potential buyers are not required to commit to a purchase.
At Luevo, we are working hard to develop a new kind of crowdfunding solution specifically targeted at aspiring and emerging independent fashion designers. We will use a combination of best practices from existing crowdfunding and crowdsourcing business models to create one solution to a designer’s top three challenges. We understand that as independent fashion designers you have certain production requirements. On our platform you will be able to obtain the pre-orders you need by crowdsourcing your demand.
You can find out more on how our fashion crowdfunding platform works here.