Fashion Careers: How is the Womenswear Industry Segmented?

ENG. For anyone interested in entering the womenswear fashion industry they should know how it is segmented. This may be clear for someone already working in fashion or studying it, but you will be surprised how many people who are interested in fashion still don’t know that fashion may be divided in different segments and that brands have different lines that may target each one of them. A company cannot offer the whole range of products that a market in an industry might desire.  For this reason, companies have to focus in just some market segments, to serve them effectively. Through Industry segmentation companies are able to identify where the brand is positioned. 

Price segmentation is the most utilized tool to segment the fashion industry.  If you take a look at the diagram below you can see an example of how the womens’ wear industry is generally segmented.

The Couture is the highest segment of the pyramid and it was originated in France.  It refers to made-to-measure clothing for very selective international customers.  The segment is more image and craftsmanship oriented than business.  Only a few fashion houses are part of this selected group.  Some examples are Dior, Chanel, Valentino, and Armani

Valentino Couture FAll 2011

The Ready to Wear segment was created in Italy as a result of a partnership between designers and manufacturing firms. “Its distinguishing characteristic is the presence of a designer [creative director] who manages the creation and development of a collection and controls the communication strategy”(quote from Managing Fashion and Luxury Companies). Ready to wear is a seasonal business sold at a high price with a strong creative context.  The main channel of communication is the Fashion Show.  Examples of brands that are part of these segments are Calvin Klein, Marc Jacobs and Prada.

Prada Spring 2012

The Diffusion segment is for the 2^nd and 3^rd lines of designer brands.  They can either be managed internally or externally by licensors. A diffusion line can either be a cheaper and simpler version of the ready to wear line or a younger version of it. In either case, the image is always consistent with the Ready to Wear line.  Some examples of diffusion lines are D&G, the young line of Dolce and Gabbana, Miu Miu, the young line of Prada, Armani Collezioni, the second line for Giorgio Armani and Ralph Lauren Black Label, the second line of Ralph Lauren.

Marc by Marc Jacobs Spring 2012

The Bridge segment was initiated by the American department stores that wanted to create a connection between the mass markets and the first and second lines of designer brands in terms of price.  The key to this segment is to serve the market at the right time with the right products.  The bridge segment is characterized by local companies such as Anthropologie in USA and Patrizia Pepe in Italy.

Anthropologie Catalog

Finally we have the Mass Market segment, the lowest segment of the pyramid. Products here can be more basic and less differentiated or they can be of fast fashion. Here, consumers are concerned about the price quality ratio. The business is created by high quantities of products sold, therefore retail traffic is very important.  Some examples of mass retails are:  the Gap, Urban Outfitters, H&M and Zara.

Zara Store

It is important to notice that changing from a mass market segment to a ready to wear segment does not only depends on price but also on the brand capability to have a clear identity that allows them to create a dream factor.  Even though nowadays we have seen designer collaborations with mass market brands that have shortened the bridge between segments (we will talk about this in another fashion career article). 

As I mentioned before, it is important for someone interested in fashion to know how to segment the market and to know in particular the most common segmentation of pricing. Also, people interested in fashion must have a clear distinction of each segment since a company may have more than one line and therefore more than one target to manage. This is exactly my current situation and for me it implies being able to apply different strategies on each line.

All info is based on my experience, studies and the book Managing Fashion and Luxury Companies (written by my former professors from Bocconi University).