If the college apparel industry ever had a Super Bowl, this is it. Fanatics, the online retailer of licensed sports apparel, just snagged $1 billion from the SoftBank Vision Fund to finance its plans for market domination. College stores that have grown comfortable owning their respective school markets are going to experience a new level of disruption. With their hybrid model of manufacturer and retailer, Fanatics is turning the traditional supply chain and college store model on its head, bringing the fast fashion model to online sports apparel. And it’s worked. Fanatics leveraged vertical integration along with a massive, highly effective digital presence to bring in over $1.4B in revenue in 2016. As consumers increasingly look online to purchase apparel, college stores need to gear up for some serious competition. There’s a new big man on campus.

            An impressive example of the synergies the Fanatics model creates is shown in their ability to deliver championship gear in a previously unimaginable timeframe. After Clemson University won the NCAA football national championship this year, Fanatics was a huge winner due to their ability to produce, sell, and deliver goods so quickly. Fanatics was able to deliver shirts within 24 hours of the game and even had a partnership with Uber to drop gear off the next day. Smaller vendors within the collegiate market weren’t prepared for the massive influx of demand for Clemson product and were beat out on turn time and delivery to consumers, losing significant revenue to Fanatics.

            For some vendors, these hot market events can make or break the season, and for the college stores, losing out on sales that previously took place in-store or online is a tough pill to swallow. Armed with new capital, Fanatics will go hard after its existing markets and expand into new ones. So how do you compete with a company that has seeming endless resources, dominates eCommerce, and can deliver product to the marketplace in hours? Compete in the categories where they will not succeed.

            Simply put, Fanatics majors in the majors. They manufacture basic goods, for the larger national brands and teams. When it comes to items with elevated decoration, fabrication, or material, they’ve chosen to source from more storied and classic collegiate brands. Even further, beyond the top national schools, the selection for becomes limited and generic. Ten years ago, the college store could sell these same basic garments as a staple margin builder and not have to think twice about clearing out inventory at the end of the season. If you’re still focused on selling those items today, Fanatics is bringing the heat. Ask any student and they’ll tell you they see several ads every day on social media and across the web promoting Fanatics products. You don’t want to compete with the digital marketing prowess of a company that’s purpose built to sell online and has millions of dollars to drive targeted advertising. There’s an opportunity here for college stores to provide items that Fanatics clearly cannot due their focus on speed and scale. Think about brands that offer superior quality, design, and experiences. Look to offer consumers products that stand out from the mass-produced gear offered by Fanatics.

            As a college store, the key to competing against eCommerce giants like Fanatics is to partner with college brands that resonate with students and alumni long beyond the transaction. This means brands with a strong mission consumers are driven to support, inspired product that they want to wear, and a passionate following that they want to join. If you can be the main source for these innovative college brands, the exclusive supplier so to speak, your customers will stay loyal in the face of generic apparel from Fanatics and others.

            Today’s consumer looks to the college store to sell unique, spirited gear that they are proud to purchase. As a store this means you may need to search a little harder to find the brands, styles, and apparel that aren’t mass produced in order to find something your customers will connect with. Inspiration may come from smaller companies and startups that you may not have considered in the past or even from other industries. Curating high quality products is worth the effort in order to build a loyal customer base. The battle against Fanatics is still in the first half and you’re going to need every trick in the playbook to win!

 
 

ALEX nOWLIN

FOUNDER & CEO OF USCAPE APPAREL

BUCKNELL UNIVERSITY CLASS OF 2014

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