Crowdfunding and fashion.
Crowdfunding.
It is a method that can directly finance individuals and organisations such as creators, institutions, and startups that they believe in. Due to the nature of the funding mechanism, it is beneficial for early-stage venture companies, non-profit organisations, and small creative groups that are not backed by capital. From the consumer’s point of view, crowdfunding enables them to find businesses and products they consider desirable and take on the role of angel investors. In fact, as a result of the consumer survey who participated in crowdfunding, the response ‘To make a positive impact on society through crowdfunding’ was the highest at 71.7%. (2019, The Korea Industry Daily)
As mentioned earlier, funding is literally one of the methods of raising funds, so it can be a donation in good faith, participation as an angel investor to secure a stake in the early stage of the business or a method of receiving compensation with a specific product or service. However, it has spread widely as the last case in Korea. In Korea, the idea and plans are disclosed in advance so that producers can practice their beliefs. Of course, it seems that funding platforms are trying to warn them about the danger of ‘investment products’, but it seems not easy.
As for clothes, the original pre-order customisation existed before the history of mass production, and it still exists. Therefore, such a pre-order method is not unfamiliar to the fashion world. Then, why is crowdfunding in the spotlight, especially in the fashion industry?
In the end, the problem is money. I have not published accurate statistics, but the most significant factor is the money issue. Crowdfunding is an attractive alternative for most early creators with limited financial resources because funding provides them with an accurate forecast of demand in advance of production beyond the meaning of promoting themselves and securing a support base before the show.
In the present era, where economically rational consumption is not everything, this method shines even more. The reason is that through the funding platform, consumers can easily find creators who pursue the values they support, and creators can efficiently deliver their stories and ways directly. It leads to quick feedback between investors and consumers. The fact that continuous two-way communication about needs and improvements can lead to better product development is another virtuous circle created by crowdfunding.
Moreover, as you can see from the fact that large corporations with sufficient funds are also entering crowdfunding, alternatives to insufficient funds are not everything. Another incentive is inventory management. In the fashion industry, inventory management is the most critical area, especially in the case of unpredictable circumstances such as COVID-19 and war.
Inventory is the homework of any manufacturing industry, but inventory is particularly fatal due to the short-lived nature of clothing. Even after one season, when a fashion changes, consumers disappear, and the stock value inevitably plummets. They are often deliberately discarded for the sake of brand value. Reducing inventory is a top priority for fashion companies, as inventory is not only economically and environmentally detrimental, but discounts for inventory disposal can also be detrimental to brand image. Furthermore, crowdfunding, which structurally does not cause inventory, can be an attractive alternative regardless of the size of the capital.
At this point, in today’s era where value consumption is in the spotlight and storytelling is essential, crowdfunding may become a new mainstream production method for which there is no better alternative. Because benefits such as quick marketability verification, gaining feedback, and easy inventory management are essential for suppliers of any size of business. Is crowdfunding the best production method to save the fashion industry? It is impossible to predict, but it is clear that crowdfunding is creating an environment where you can focus on product planning, skipping the headaches of predicting unpredictable demand and managing inventory.
In addition, the structure of the funding platform is significant in the product planning and design stages beyond the production and sales stages. Of course, thanks to the consumers who have changed so far to be credited with the funding platforms, it is clear that these platforms allow consumers to quickly focus on the meaning, beliefs, and philosophies of products. It is a structure that has no choice but to review the above contents before purchasing and sponsoring the development. Thanks to this, consumers are not limited to consumers and can feel a sense of belonging and share the feelings of creators. (Is not the success of the funding significant to both creators and sponsors?) These experiences are difficult to obtain while browsing and purchasing products in stores, whether offline or online.
It is a system that is only good for people, industry and the environment. Nevertheless, why is it that complex and subtle emotions settle in the back of my mind whenever I look at funding platforms? Maybe, persuading consumers only by explaining the product is doubtful whether it is suitable for the fashion industry. Furthermore, if there are not enough consumers, is it okay to be in a situation where there is no product? Some people run a brand thinking of only one person who acknowledges their brand and development, and they live fiercely, struggling to melt their attitude into clothes so that they can prove it with clothes to people they have not yet reached. It is impossible to force everyone to have the same attitude, but again, it is regrettable in my heart that there is no other way for creators except the ‘sorry if you cannot buy enough’ method.
In addition, as the platform grows, it is difficult to welcome the fact that it is used for other purposes that are not intended for creators who lack funds and have yet to shine. To be clear, it is difficult to define the ‘original’ intent clearly, and I am not suggesting that large corporations do not fit the purpose of crowdfunding or that the scope of the ‘creator’ needs to be cut. However, crowdfunding is too attractive, so it is easy to find cases where funding projects are carried out as part of marketing.
There are cases where it has been transformed into a kind of employment portfolio beyond a marketing tool. Since the end of the project is to give tangible rewards to investors, in the case of fashion products, the rewards are the same with products, and the entire process of production, marketing, and follow-up management is included in the project as well planning. It is not an easy process, but there is nothing suitable to wrap it up as a career and prove their abilities.
In the end, it is sometimes dismissed as completing a single project to use as a portfolio to show one’s abilities. Whatever it is, it is one’s own decision and freedom, but it would not be pleasant to someone who would have supported the brand/creator with a spirit of companionship. There is no room for words like a one-time project for a portfolio in the crowdfunding platform where the creator should write in sincerity.
*Herding behaviour, an inevitable feature of crowdfunding platforms, is also one of the factors to be noticed. It is dangerous that the larger the cumulative amount raised, the more swarming behaviour occurs, attracting more investors. The performance of the opening day can determine the final result of the funding. In the end, it means that the judgment of other consumers intervenes in the consumer’s final decision. Of course, it is the same outside of the funding platform, so everyone is doing their best to build a brand image to get a ‘name’ that can attract consumers.
*The act of unconditionally following the decisions of other financial institutions or investors.
Contrary to its original intention, the funding platform takes away consumers’ identity with numbers in the consumption process. The consumer’s final decision, whether it is decided visually or after wearing it, is mainly determined by their judgment. However, in crowdfunding, it is structurally impossible due to the numbers that appear on the screen.
In conclusion, in the platform, it is not possible to say that it is common for consumers to be engrossed in specific numbers, such as the achievement rate and the amount of money raised.
Furthermore, it is not unconditionally positive to explain their values in writing. Of course, in an era where we communicate only with images like yesterday and today, it is meaningful to access the explanation of the result in writing. Therefore, unless they are affectionately interested, it is difficult for consumers to understand the context of the product, and the product is ultimately just a floating image. Nevertheless, the value of fashion design and the brands and designers who carry out it is not all that is conveyed through text, and even if it is the author’s writing, the content of the text cannot be said to be the best.
After all, since clothes can be seen with the eyes and come in contact with the body, the method of dealing with this value visually and tactilely is the key, and the interpretation of the consumer who understands and accepts clothes through various senses is essential. Moreover, the visual language beyond the clothes that the brand embraces — all how the brand’s identity can be visually expressed, such as logos, typefaces, websites, and stores — is necessary for the independent interpretation and acceptance of consumers. Text is important, but arguably not everything in the multilingual fashion. In conclusion, the limits of clothes and fashion are clear on the funding platform, where the same structure and specifications are set.
