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NBC's Fashion Star puts winning designs in-store the next day

Macy's, H&M and Saks will sell the reality show's best designs.

March 13, 2012

Three major clothing retailers are betting that a stint on reality TV will turn into increased sales. "Fashion Star" airs tonight on NBC and features 14 designers trying to win the chance to sell their clothing at Macy's, Saks Fifth Avenue and H&M, who will ultimately determine the winners.

Celebrities Elle Macpherson, John Varvatos, Nicole Richie and Jessica Simpson serve as the designers' mentors, while buyers from each of the three retailers bid on designs to be sold in stores the day after the episodes air.

The show is yet another way brick-and-mortar retailers are trying to compete with their online counterparts, said Kathy Doyle Thomas, chairman of the board for the Retail Advertising and Marketing Association (RAMA).

"Online wins because they can react immediately," she said. "One of brick-and-mortar's challenges is their ability to quickly react to the marketplace."

Making the winning designs available in store the day after they're shown on TV is a positive step in that direction.

"Customers will be able to buy the piece immediately versus waiting for weeks or months for a winning piece to be integrated into a collection," said Candace Thornton of competiscan, a market research firm. "This business model should really appeal to the instant gratification culture of today's youth who are used to everything being instant."

Commercial appeal

Running a commercial during a prime time show like "Fashion Star" could cost $200,000 or more, so it would seem an obvious choice for a retailer to spend its dollars on being a part of the programming as opposed to just a 30-second ad spot.

"I think it is a more efficient use of TV ad spend, but the degree to which there's any negative blowback from this will come down to execution and the degree to which they are able to tastefully pull it off," said retail prophet Doug Stephens, who expects other retailers and brands to pursue similar strategies.

But "Fashion Star" might be an even sweeter deal as the retailers aren't directly spending money to be a part of the show.

"Unfortunately we cannot comment on costs, but this is not paid advertising," said Nicole Christie of H&M. "We are not paying to participate in the show. H&M as a brand is part of the entire plot and story of the show. We are making decisions that affect the outcome, and our major financial investment is in the garments we buy. When we are bidding on the show, it is real money—this about how we conduct business and make commercial decisions every day."

Analysts expect "Fashion Star" to help the retailers reach their targeted demographics while also serving as a safe platform to test new styles. Being aligned with a successful fashion show makes the retailers relevant with the coveted 18-to-35-year-old demographic.

"Department stores want to be hip, and the concept of delivering the latest fashion the same night it is unveiled is a terrific sponsorship opportunity for Macy's," Thornton said.

The other major benefit of the show is that it allows retailers to monitor sales and the buzz on social media sites to determine if the winning pieces have staying power.

"It provides a safer scenario for testing some new styles that might be risky without all the advertising exposure connected with the show," Thornton said. "Fashion Star will provide a built-in audience for their new product."

Challenges facing the retailers

Although being a part of "Fashion Star" seems like a brilliant marketing idea, the retailers will face challenges, including supply chain management issues, giving up control of branding and the risk of turning customers off by making the fashions too accessible and affordable — in other words, coming off as "cheap."

"The hardest challenge is actually getting the fashions in the stores quickly," Doyle said. "Execution and timing is key."

Another major challenge for retailers will be their lack of control. They're putting a great deal of trust in producers that they will not come off in a negative light.

"The retailers spend a great deal of time and money branding their company and their executives," Doyle said. "I am sure they are concerned about the outcome. But in the end they are willing to take the risk because they see it as a great marketing opportunity."

Finally, Macy's and Saks, especially, are taking a risk by offering lower-priced items on the same scale as H&M, Thornton said.

"Does fashion become compromised to make a piece affordable? Viewers and buyers will be vocal. Ultimately fashion is expensive and if viewers feel that Macy's and its partners are putting cost before style, will Fashion Star or Macy's take the heat?" she said.

That's an issue that won't really affect H&M, known for its affordable yet high-fashion designs.

"We think this will be a great way to promote H&M as a design-driven fashion brand to millions of Americans, as well as find new design talent," H&M's Christie said. "This show will give them a unique view point into how we design, produce and present garments for them in our stores every day. This is a story that they normally do not get to hear, and we think it will increase both the viewers' and our customers' interest in what we do and ultimately bring them into our stores."