This blog is about technology and fashion. With software eating the world, we are no longer simply at the intersection of fashion and technology; or retail and technology. Companies with the best technology will win and that is no longer limited to Silicon valley. The same holds true for Milan, Paris and New York.
It is hard to think of fashion without thinking of e-retail
In order for people to consume fashion, the act of retailing or selling it must be involved. With the advent of e-commerce enabling retailers to sell items of fashion, the stage was set for retail and technology to not only intersect but to intertwine; thus putting fashion in the mix as well.
Even as old fashion houses like Chanel and Dior continue to eschew e-commerce for their ready-to-wear and accessories, Chanel published its prices online for the first time in early 2014 – a price transparency that is anathema to luxury fashion. In fairness, the main reason for these brands are two-fold: preserving the in-store shopping experience and capitalizing on cross-selling. Online shopping was considered to be “too common” to apply to luxury items and that consumers of such luxury would much prefer the experience of being waited hand and foot in store. Net-a-porter, the pioneer in selling luxury fashion, has proven that luxury consumers put a high value in convenience as well; posting £434M in revenue in March 2013 with 6M unique users each month.
Fashion must utilize technology to be successful
The landscape has changed not only for the way that people perceive luxury fashion – branding and marketing – but also for the process of designing and producing it. For decades, the creative and design side especially in luxury fashion, seemed separate from the nitty gritty aspect of sourcing and distribution/selling. This is especially true for an old fashion house like Hermès whose success relies on artisan craftsmanship; limiting its 37 worldwide manufacturing facilities to 200 people per facility.
But Hermès is an exception rather than the rule. For most brands, dealing with consumers’ fickle tastes means that they have to operate at a large and global scale efficiently in order to arm themselves against the fast fashion industry such as Zara and H&M. To do so, they must rely heavily on technology to handle such scale. Burberry is one of those success stories; investing in the overhaul of its SAP infrastructure over the course of 5 years, starting in 2005. Called Project Atlas, it cost the company £50M and is largely attributed as one of the reasons for its continuing success.
“..substantial investment in core information systems has improved Burberry’s fundamental operating capability and enabled rapid growth in recent years..” Angela Ahrendts, former Burberry CEO
Burberry has also managed to maintain its brand identity while leveraging the digital space with a full e-commerce site and active social media engagement. Its Facebook page has 17M likes and consumers further engage with the brand on www.artofthetrench.com by uploading pictures of themselves wearing the iconic trench coat.
As companies like Burberry navigate this digital sphere, fashion start-ups such as Moda Operandi and Tinker Tailor continue to disrupt the industry with concepts such as pre-tail (ordering items at concept stage) and mass customization. Mass customization is not new but the elements have changed in the way brands can communicate with the consumer in this digital age. Old stalwarts must continue to innovate in order to stay relevant and some have done so: Nike’s iD shoes and Burberry’s Bespoke.
We are starting to wear technology itself
In Fall 2012 during New York Fashion Week, Diane von Furstenberg, the designer behind the iconic wrap dresses, put Google Glass on her models as they walked down the runway. Those were the early days of Glass, which has since been a topic of privacy discussions and has become the symbol of the economic divide brewing in Silicon Valley. Beyond the social ramifications, it is undeniable that tech companies are looking at wearables as their next stage of innovation. The ever-secretive Apple has been rumored to come out with either a smart-watch or a fitness tracker but neither has been realized. However, it behooves Apple to enter the wearable market especially if it wants to continue to dominate mobile hardware where competitors like Samsung is going big on wearables with Samsung Gear. In fact, its rumored acquisition of headphone maker Beats might just be a step in that direction.
Attitudes are changing in the fashion and tech ecosystem
Attitudes surrounding fashion in general are changing and tech venture capitalists are also incorporating fashion startups into their portfolio. Even old school Y Combinator accepted 3 fashion startups in its Winter 2013 class, a record for the pioneer in tech incubators. New York Fashion Tech Lab, a new accelerator program founded in April 2014 is capitalizing on the intersection of technology, retail and fashion. The program for fashion tech startups will offer mentorship from retailers such as Kate Spade, Ralph Lauren, J. Crew, Macy’s and Estee Lauder.
We can probably credit Apple for introducing a strong aesthetic in technology devices where before, most devices were clunky, black, plastic items. The company has proven that consumers will pay a large premium for designs as sleek as its retail stores. In a move that further highlights the relationship between fashion and technology, the company hired former Burberry CEO Angela Ahrendts as Senior Vice President of Retail in Spring 2014.
Finally, I will leave you with the story of Vanessa Friedman, former and the first fashion editor of the Financial Times (she is taking over Cathy Horyn’s post at the New York Times) on how attitudes have changed towards fashion in general. She recounts telling an investment banker what she does and he laughed so hard, disbelieving that FT would have a fashion editor. Since then, business can no longer deny that fashion is huge – $252B according to Bain and Co. As to the question of why fashion matters? Vanessa Friedman has this to say:
“The world is not run by naked people.”
And those fully-clothed people also happen to carry some nifty gadgets.