Even a decade ago, Touché LA Co-founder Karl Singer told PYMNTS in a recent conversation, the middle market of fashion was a very different place — and not just in terms of the style types that were available for purchase.
What people are buying, after all, is always changing in the apparel business. That’s just the nature of game. Something is always going to be the new black every year, blazer lengths and lapel widths will vary, and consumer opinions on shoulder pads are in a constant state of flux. But the last decade, particularly the last few years, Singer said, has seen a very different kind of change. It’s not just what consumers are deciding to buy, but how consumers are making the decisions about what to buy at all.
“If you rewind five or 10 years ago in the fashion industry,” Singer said, “the middle market was controlled by a handful of brands. Customers looking to be on the cutting edge would talk to the staff at those stores, or read Vogue, or even read the trades. But as those brands have been slowing down, we’ve seen the rise of the social media influencer and celebrity, and they’ve really become the new trend forecasters and style editors with extremely large followings.”
As that trend was taking shape, Singer said, he had a front row seat to the change in progress because he was working in private label, manufacturing for middle-market retail chains. Watching the slowdown — and even destruction — of those businesses made him and his wife, Jaynee Singer, realize that the times in retail were changing, and that the rise of social media concurrent to the fall of the middle-market fashion brand presented a unique opportunity.
“We saw that there was a lot of market share to be taken in the middle market,” he said, “and so we decided to create Touché LA to be a platform for social media celebrities, influencers and personalities to really build their own fashion brands.”
How It Works
Social media stars, while they may know a lot about fashion and trends, are not necessarily well-equipped to overcome the many logistical and operational hurdles that go into the manufacturing and distribution of apparel.
“We run the manufacturing, operations and fulfillment behind the brand and bring it to market, and really help grow these brands into larger lifestyle brands,” Singer said.
The goal, he added, is to offer the place where celebrity influencers with a vision can come to develop that vision — and make it available and salable to the public. It is not a licensing agreement with these social media personalities, wherein the firm purchases the rights to use their name then manufacture goods under that branded heading.
Singer said, “Licensing can be great for the celebrity involved, but it really doesn’t give them very much skin in the game. We want it to be clear that we are getting behind them in a big way and taking the risk of financing it, running development and running the operations in the business. We are really invested in growing this over time, and we want the influencers we work with to have the same level of investment.”
As a result, he said, influencers with whom they develop brands — like Alexis Ren or Morgan Stuart — don’t collect a license fee. Instead, they are given an equity stake in the brand. If it does well and makes money, so does the influencer behind it. The goal is to take all of the micro-brands cropping up across social media accounts, allow them to cross-pollinate with each other and create an easily accessible portal where customers can shop these brands.
The challenge, he noted, is finding the right social media brands to build behind.
Finding Real Influence In A Sea Of Influencers
As of 2018, Singer noted, one of the challenges in this kind of brand creation is finding strong bases to build upon. Lots of people call themselves “social media influencers” these days, and it is a term that doesn’t exactly have a hard-and-fast definition. But, of course, not everyone who calls themselves an influencer is influential in the least — and for a brand like Touché LA, finding the right partners is everything.
“Our model depends on getting behind large-scale social influencers with big followings and helping them create their brands,” Singer said.“We have to pick the strong influencers, and that term is [thrown] around so lightly these days. For we are looking at people who captured their audience early, and who have [left] them enthralled for a while, because that is the type of audience we can convert into sales.”
Finding those types of influencers, he noted, is a really about looking at a variety of factors.
The first, and most obvious, he said, is just about numbers. How many followers does this person have? What are the demographics of their average follower? How much action and interest do they command when they post?
The second thing considered is the social media celebrity's “parallel career path” — or what they do when they aren’t influencing a crowd of millions over social media. Are they an actress? Do they aspire to be a comedian or a talk show host? These are all important considerations, Singer noted, because they offer Touché LA a picture of how they can possibly grow across channels and markets with this person.
And the final thing — and in some sense, most overlooked and yet critical — to look for is a team of people who work behind the influencer to provide a structure for their business.
“A lot of these folks are very young,” Singer said, “and even though they have an amazing number of very dedicated followers, we really need them to have a team to help them structure the business and create the enterprise that we want to bring to market.”
That is because, he noted, retail apparel is an increasingly complex and diverse business, and the influencers the company works with need to be able to move with the expanding number of duties that building a successful apparel brand over time entails. Social media promotion is fantastic — and obviously the power on which the Touché LA brand is built. But, Singer added, even with the power of impactful celebrities behind them, the brands they are building still have a lot of work in front of them to become (and stay) relevant to customers.
That means brands need additional targeted advertising approaches across digital channels — the need to regularly engage with their followers and potential consumers across social media channels to get an idea of what the buyers want to see in the collections. They need to be able to roll out new products for perusal by customers every five weeks or so, due to the elevated pace of fashion product cycles. And, he noted, they need to be able to “put a toe in physical retail” with pop-up shops and events, because the retail experience is crucial for building customer loyalty to a brand.
It’s a lot of work, and while the rewards can be incredibly powerful, an influencer has to be ready to take it on in full to really extract those rewards.
Though Singer noted being pleased with what Touché LA has achieved up until now, there is particular excitement for 2019, with big plans to expand out the company's portfolio with a new class of innovators.
He said, “We have hit all the milestones we want with our current brands — they are all generating revenue beyond our targets. But we are also super excited about the account we have locked in for 2019.”
Which brands will those be? Singer was close-lipped about a “coming soon” innovation to the company's payments structure, which they believe will take even more friction out of the process than the myriad of payment methods already offered (including Apple Pay, Google Wallet, Amazon Pay and PayPal, to name a few). As for the company's biggest goal — and what they think the secret to success is in the new era of retail? Singer said that, given how people use social media, to the Touché LA team, it seems pretty obvious.
“Retail is now about keeping customers involved in the brand,” he said. “Today, a customer wants to be part of a brand's story. So, as much as you can integrate them, the better we think for your end conversion.”