Join the Crowd

Instead of dictating the trends, brands and retailers are banking on consumers’ input (and generosity) via social media, high-tech customization programs and crowdfunding sites. By Lyndsay McGregor

We’re all familiar with the age-old adage “the customer is always right.” Today the power of the crowd is driving the future of business more than ever, even before product makes it onto shelves. Capitalizing on the social nature of humans-not to mention our obsession with all things techy-more and more brands and retailers are turning to crowdsourcing and crowdfunding as a means to create content, solve financial woes and do corporate R&D.

Never before has the consumer had so much control over what, how and when products are available. “Crowdsourcing is the use of social media and internet outreach to take your design process directly to the consumer,” explains Professor Susan Scafidi of the Fashion Law Institute at Fordham Law School. “It might be asking the consumer for designs and then getting input or it could be just proposing designs to the consumer. Either way it gets the consumer involved in the process of deciding what the brand or retailer will offer.” Last year, Burberry Prorsum screened its men’s wear show in Milan online and viewers were able to click and buy instantly from the runway, receiving their products two months later. (Several months ahead of the usual fall deliveries.) Threadless, a Chicago, IL-based crowdsourcing company launched in 2000 sells T-shirts created by designs submitted from users. Even Jennifer Lopez is hopping on the bandwagon with Teeology, a site that offers up limited-edition luxury T-shirts manufactured based on how many positive votes they get by users. “Once upon a time all we could do was monogram. Now we can redesign the entire garment,” Scafidi notes.

Children’s clothing is getting in on the act, too. Combining their experience at shopping sites like Minted (crowdsourced designs for high-end stationery), ThredUp (online children’s clothing swap) and eBay, the four founders of One Jackson have created a new way to shop for kids, one that turns crowdsourcing into a two-way street. “It’s a chance for great indie designers-who maybe on their own can’t afford it-to get a line manufactured and for customers to get excited about designs and pick what they want made,” says co-founder and CEO Anne Raimondi. The team puts together an inspiration board based on trends and what parents want, and reaches out to designers who have a certain period of time to submit designs. Customers vote on what they love and based on feedback, a limited-run collection of 10 to 12 pieces is produced. “I think what it does is give feedback and data so that everyone can move faster and produce things that they know will sell, and I think that makes everyone happier and more successful,” Raimondi says.

A helping hand

Even before the credit crunch, it’s traditionally been challenging for emerging fashion brands to get the financial and marketing support they need. When President Obama signed the JOBS Act (Jumpstart Our Business Startups) into law in Washington, D.C., on April 6, small companies jumped for joy. The JOBS Act reduces many of the regulatory barriers that have, up to this point, made it nearly impossible for young startups to raise much-needed capital from investors. Among other capital formation measures, the amended JOBS Act includes an edited version of Congressman Patrick McHenry’s crowdfunding bill, which allows startups and small businesses to pool together funds of up to $1 million annually from fans through a number of small-dollar donations using web-based platforms like Kickstarter, RocketHub and Indiegogo. And it’s not just starved-for-cash startups: Reality star turned fashion designer Whitney Port took to Indiegogo this summer with the goal of raising $50,000 to show her clothing line, Whitney Eve, at this month’s New York Fashion Week. “It conveys the message that people believe in projects. It’s also an outgrowth of our incessant clicking of ‘like.’ Now we can put our money where our ‘likes’ are,” Scafidi says.

For Kris Galmarini of Charleston, SC-based Neve/Hawk, going the Kickstarter route made sense for her handmade clothing company. “I had always wanted to do a whole clothing line and that was turning into a reality sooner than we thought,” reveals Galmarini. She and her husband had been making T-shirts in their home studio by night, screen-printing and sewing while their kids slept, when they were invited to exhibit at Playtime New York. It was an amazing opportunity, but they didn’t have the money to pull it off. So, having supported people on Kickstarter before, they decided to give it a go. They set their goal at $8,000 (for samples and to get to New York) and offered pledgers hand-screened notecards, T-shirts, photo books and items from the first collection as a “thank you” for contributing. The result? Neve/Hawk exceeded its goal and received $9,000 from backers. “We were afraid it would just be all of our family and friends that would donate, which would be fine, but we wanted other people to help us and see our project, and we were lucky enough that that’s exactly what happened,” she says, adding, “You’re not just getting the money you need; you’re getting fans.”

It’s a sentiment shared by Carrie McQuaid of Caroline G in Durham, NC. When she started her handmade hair bow business in 2010, she always planned to expand into dresses. “I talked to a bunch of people who owned businesses and many people had suggested crowdfunding to get the word out and get exposure,” McQuaid says. Having seen a lot of projects similar to hers on Indiegogo, she launched her own campaign. “I didn’t raise as much as I wanted to, but I got so much exposure. A lot of people contacted me afterwards asking me to let them know when I launched a full line,” she says.

But getting financing is only one step on a long road. For designers, setbacks can include safety regulations, testing and increasing costs. A risk for retailers is whether consumers who vote for the products will actually buy them, which leads to the question: Do crowdsourcing and crowdfunding have longevity? “It’s a trend of the moment. But is it a fad? In this form, it might be,” Scafidi says. “It’s always really compelling when you first stumble across the idea, but we get a little lazy and over time we may revert back to the means of ‘retailers propose, consumers accept or reject.'”