Why Russia needs five Fashion Weeks every season while France needs only one?
Elena Ilicheva - PhD, professor at at the University of Design and Technology and the Institute of Contemporary Design (Moscow, Russia), director of Agency of marketing communication Newtown Fashion Services (NFS)
New forms of communication have developed as a result of changes in Russian society over the past 30 years. This is also true of fashion as regards communications between people and society, different social or generational strata, the centre and the region, vendors and customers.
Fashion weeks are a unique phenomenon, an effective marketing tool and a striking model for research into consumer preferences specific to a particular country. At present, Russia hosts five Fashion Weeks a season: two in each of the capitals (Moscow and St Petersburg) and one on the border between Europe and Asia (Yekaterinburg). Only six years ago, there were 12 Fashion Weeks but the number has gradually come down to the current total and, despite the crisis on the markets, no major changes in the number are currently envisaged.
The development of the market in Russia differs from the situation on the European market. According to figures from McKinsey, 2011 saw a 17-per-cent rise in the Russian luxury goods market by comparison with 2010. Of the luxury goods favoured by Russians, clothes make up 36 per cent and jewellery and watches only 3 per cent, whereas these items account for 76 per cent of sales in India, 51 per cent in China and 17 per cent in Brazil. However, the Russian clothes and footwear market is growing in the middle-range segment too: the past six years have seen that figure go up by 13 per cent a year.
The majority of people living in our country have an extremely low standard of living: only 6 per cent can afford to buy luxury goods on a permanent basis and have an income of more than 60,000 euros a year. According to figures from the NFS company, imported goods cost 15-32 per cent more than in European countries.
How is it that Russia can let itself hold large-scale events so often and who buys the designers whose work is on the catwalk? As many as 70 designer collections go on show during each fashion week. This makes fashion weeks an effective marketing and communications tool for the designers themselves, who are able to recoup their expenditure on preparing the collection and taking it onto the catwalk, and for other goods which fashion weeks help promote.
It is significant that the very first fashion week in Russian history was Haute Couture Week in Moscow. This changed to a pret-a-porter format a mere 8 years ago and is now known as Volvo Fashion Week.
Only in Russia does the Volvo trademark feature in the name of a fashion week, unlike that of another car manufacturer, Merсedes-Benz, which supports several fashion weeks in various countries. These makes of car are thus associated with fashion and the in-crowd. The commercial partners of Russia’s fashion weeks are often mobile network operators and phone manufacturers or suppliers of alcoholic beverages and cigarettes, who are also keen to market themselves as “fashionable”.
An opinion poll of residents of various Russian regions revealed that people do not buy and do not know the names of Russian designers. At best they can name between three and five of them but own no more than one of their items. However, these respondents are very well aware of the makes and models of cars regarded as “fashionable” or “desirable” and, indeed, the car market is still far from saturated in our country. As for the fashion and footwear market, at present 86 per cent of the best known brands on the international market are already represented in central Russia. All the big media holding companies also have Russian-language versions and have long since switched to local content. For example, Vogue and ELLE were launched in Russia as far back as the early 1990s and have an audience appropriate to the size of the country and an authority that matches their status in America. And yet in America, there is only one Fashion Week whereas Russia has five. This is determined by specific Russian characteristics which dictate the rules of the game on the market and the means of communicating with customers.
In recent decades, Russia has already been through two phases of creating a fashion industry.
The first phase of doing so consisted of imitation, copying and the unrestrained consumption of imported clothes. Vendors had no need to meet customer demand or to monitor the image of the brand being sold. Customers had their own interpretations of designers’ ideas. Many owners of designer clothes were unable to read the brand name but bought the goods so as to promote themselves in their own social circle or in one they hoped to enter. This was inverse communication – the customers themselves sought out the vendor who needed no further publicity.
Visual communications became most important for establishing an identity and for finding a place in society. The avalanche of new visual information created a need for authoritative opinions, for places for display and self-realization as well as for the natural selecting out of surplus or non-functional content.
During this period, holding a catwalk show in Russian Haute Couture Week offered the chance to provide consumers with an understanding of the brand’s status and the cohesion of the items in the collection. In order to reach as large an audience as possible in a country with several time zones, the shows were broadcast on central television. In other words, visual information was open and accessible to people in every social category. Customer demand was brisk and chaotic, giving rise to the mass reproduction of branded goods and the breakneck development of retail, as well as revealing the extent of divisions in society. This process was similar to the situation in Italy after the war but in Russia it took place half a century later.
The second phase consisted of broadening the outlook of customers and vendors, establishing our own design schools and seeking to set up market communications. In the city of Moscow alone, 13 further educational establishments were set up, teaching fashion design, compared to the Soviet period when there was only one specialist institution in the country. This second phase of the industry’s development may be called a period of growth in competition, the emergence of various commercial formats and the battle for retail space.
According to figures from the AMIKO company, Russians preferred to buy clothes in the following outlets:
78% - clothes chain stores;
41% - other clothes retail outlets;
35% - open street markets;
31% - boutiques.
Vendors began to take an interest in their customers but only in their own category of customer – the concept of target audience and personalized advertising came into use.
The changes in vendor-customer relations were reflected in merchandizing, presentations, publicity campaigns and sales. During fashion weeks, VIP catwalk invitations, a sign that a client was receiving special attention, were one very simple example of these new relationships. This approach remains popular the world over. However, the changes that took place meant
information had to be kept secret and access denied to the “non-target” audience, who were no longer allowed into high-end shops. Magazines appeared, such as “Dorogoy” (Expensive), which could not be bought or subscribed to unless your work or financial circumstances corresponded to those of the desired readership.
Russia is now at the beginning of the third phase.
This envisages the development of a civilized market within the country, the establishment of our own trademarks and the desire to take our brands into other countries’ markets. At the moment, local brands make up 12-13 per cent of the fashion and footwear market in the middle price range sector and 17-21 per cent in the lower price range sector.
This is confirmed by figures from the BusinessStat company: from 2006 to 2010, the volume of clothes sales in Russia went up 32.5 per cent to 1,032.7m items. Clothes imports into Russia during the same period went up 54.5 per cent from 633.8m to 979.1m items.
Why then are our own brands growing so slowly? At the moment, no more than 150 brands have been created by Russians. Of the 30 top Russian brands with a turnover of 3.5 - 4.5bn euros, only two manufacture their goods in Russia (according to figures from the Union of Clothing Manufacturers).
NFS has carried out research in three of Russia’s biggest cities (Moscow, St Petersburg and Yekaterinburg), which showed that Russian traditions and ways of thinking have their own specific features when it comes to making sales and running publicity campaigns. It was a poll of clothes shop buyers and marketing specialists, who had worked with the same brand for at least three years. It sought to discover the differences in purchases of a single brand between a European boutique and a Russian one in terms of the range of colours, product portfolio policy, size range, market promotion strategies, the principles governing work with customers and sales figures.
It enabled us to create a list of features that distinguish Russian customers and the pattern of consumption over the past three years.
Here are the most typical national characteristics:
A. Russians have no faith in domestic manufacturers. All the Russian brands that are so far doing well on the domestic market say they must have a presence on the European markets or have originated abroad although, in actual fact, according to BusinessStat, exports of clothes from Russia account for only 0.2 per cent of total clothing manufactured and go predominantly to countries of the former Soviet Union. In other words, the Russian fashion industry works primarily for the domestic market but has not yet created customer loyalty or recognizable high-cost brands. Changing the situation is complicated and such processes are not quick. For the sake of comparison, NFS figures show that Scandinavian brands in Sweden account for 68 per cent of annual sales of adult clothes and 72 per cent of children’s clothes, evidence of the high level of confidence in the manufacturers.
Since imports are expensive and the trade in copies and imitations has existed for many years, customers may buy their most expensive clothing when travelling or on special shopping tours.
In this connection, the Russian consumer often makes snap purchases when abroad. According to figures from Global Blue, a company that provides tax free shopping in Europe, Russians are second only to the Chinese when it comes to the consumption of designer goods.
According to information from Salvatore Ferragamo CEO Michele Norsa, Russians spend twice as much outside Russia on the same things they buy at home.
B. The customer wishes to remain incognito. This is the Russian consumer’s most complex “character trait”. It is not considered vulgar to show your hurry or your wealth but not even middle-class people want to give vendors detailed information about themselves. As a result an opportunity is lost to provide the personalized service and direct vendor-customer contacts that are so familiar to people living in Europe. The vendor is forced to look for other ways of communicating with customers, for example, a professional context (visitors to fashion weeks) or age-specific groups. For the same reason, there is rapid growth in internet shopping with the goods paid for in cash when delivered by courier.
C. Customers want more than they can afford. Adjustment for this factor is entirely justified in calculating potential market capacity when moving into a new part of Russia.
More than 30 per cent of luxury goods are acquired by clients whose incomes do not allow them to make such purchases. Many commercial companies use this factor to adjust their positioning. For example, little-known brands, which come into the low price bracket in the capital, are positioned in a more expensive segment during regional campaigns – boutiques are opened rather than mass market outlets, which enables them to draw in new customers, eager to acquire more for less money.
Of all the BRIC countries, only Russia has this characteristic and therefore this order of preferences. BusinessStat experts found that in 2012 Russia is rated ninth most promising market in the clothing sector.
D. Russia has a unique pattern of consumption. According to figures from McKinsey, nearly 45 per cent of the luxury goods market is made up of alcoholic beverages with expensive clothes purchases in second place. For this reason, these product groups are often promoted together. For example, a maker of brandy will sponsor a fashion week catwalk show.
E. Russians do not trust foreign advertizing. European advertizing is rarely suited to Russia or to any of the BRIC countries. More often than not, advertisers achieve an unexpected impact or a new and not always positive interpretation of their communication. This is linked to the difference in associations and in the level of vendor/customer communication. For example, two types of knitted dresses feature in an H&M advertisement. The number of customers in the shop after the advertising campaign goes up but few of the dresses shown in the advertisement actually sell whereas in Europe the customer comes in specifically for the item seen in the advertisement. The reverse is also true – that advertisements intended for the Russian public are not suitable for Europeans.
Russian designers are not seeking to increase their presence on the market. The same designers take part in fashion weeks in different cities, invite clients from all over the country to catwalk shows and try to interest the press in several shows of a single collection. The size of the country makes it possible to fill auditoriums in every town. Successful designers, however, make no attempt to step up to international level or to create their own network of boutiques. This requires large-scale investment, good management and logistics as well as production capacity that doesn’t yet exist in Russia. For the same reasons, it is very rare for designers from Russia to take part in professional shows and exhibitions in Europe. Europeans know at most four Russian designer brands but the names of hundreds of models.
So, Russia is currently a positive consumer market that continues to grow rapidly for now. Russian accession to the WTO means local brands will inevitably be involved in collaboration and move into other markets. Defining national consumer specifics and researching channels of communication and their comparative analysis is therefore a promising topic for further research. Moscow has long since become a fashion capital and this status presumes that it can dictate its own rules to the market. And if fashion weeks are an effective tool, then that tool should be used as effectively as possible.
* Bruno Remaury, Brands and Narretives. Brands and the Cultural Collective Unconscious. IFM / REGARD, Paris, 2007, p. 114.
* Fashion – бизнес: теория, практика, феномен / подю ред. Николы Уайт и Йена Гриффитса; Минск: Гревцов Паблишер, 2008 – с. 272 * Fashion - Рынок и его специфика в России. www.fashion-russia.com
* King of Fashion. The Autobiography of Paul Poiret. V&A Publishing, London, 2009, p.178
* Twenty years of Fashion system. IFM / REGARD, Paris, 2008, p. 218.
* газета «Ведомости» от 16.03.2012
* Эрнер Гийом, Жертвы моды? Как создают моду, почему ей следуют. СПб.: Изд-во Ивана Лимбаха, 2008 – с. 272