Fueled by a powerful and unavoidable need for innovation in the sector, a growing number of fashion brands and organizations will seek to adopt the capabilities and skills of “startups”. The list could be very long, but for practical purposes we select the following as the fundamental ones: versatility, cooperation, interrelation and openness. Traditional and “Heritage” players will be forced to open their minds to other types of talent, new working models, new societal systems and investment methods.
The report The State Of Fashion By McKinsey & FOB says that “international analysts, industry leaders and professionals in economics and finance estimate that, within the next 10 years, 40% of Fortune 500 companies will cease to exist. As a growing number of retailers go bankrupt and different fashion brands continue to go extinct, other organizations in the sector have realized that their survival depends on constant innovation. The familiar phrase “innovate or die” has never been more important than it is today.
The relocation of the production of fashion garments and accessories to locations in the proximity to the mass consumer markets of the U.S. and Europe, hand in hand with sustainability and automation, will pave the way for this process of development and innovation. This return of the industry to sourcing in proximity, which I have personally defined as “The Neo-relocalization of fashion“, has already begun and although it will not be free of obstacles, it is persistent and irreversible.
Innovation, the main quality of “startup fashion”.
Those players in the fashion sector who have objectives of growth or at least permanence in the market should focus on innovation from design to post-sale. In this way we will see more brands and companies looking for inspiration in the industry to infuse innovation throughout their ecosystem. Learning from the operating systems of startups and digital native organizations, fashion companies will be pressured to open up to new talent, to new strategic partnerships with organizations in other sectors, and to adopt new investment models.
A valid and effective way to promote innovation is to associate or acquire new startups. It is estimated that venture capital investment in the fashion sector will grow and competition from investors for the most attractive startups will increase as the important fashion industry market gets ready for future digital and technological disruptions.
Part of the venture capital injection will be executed by fashion entrepreneurs. Large players will also be involved, starting from their own investments in innovative start-ups. In addition, traditional venture capital organizations will focus more on the fashion sector, further boosting competition for the more disruptive startups.
Global fashion players are looking for startup talent.
In the race to innovate, the most relevant players in fashion will compete to keep the startup talent. In order to generate more innovation in the shortest possible time, brands in the sector will need professionals with new “know how” and new skills, combining data analysis and technological skills with entrepreneurial thinking.
Given the scarcity of such skills in the fashion sector itself, entrepreneurs will need to recruit professionals from other industries. At the same time, as the demand for professionals with the same skills is increasing in all sectors, fashion organizations will compete against a wide range of other companies. This results in many companies in the sector wondering about the following:
What do we need to attract this budding talent?
Right now, companies are observing how “new collaboration systems” increase the speed of innovation. There are a variety of possibilities, from collaboration with technology companies, to cooperation with educational institutions and universities to introduce digital and technological skills into the fashion curriculum. This is how we will be able to see traditional fashion organizations breaking paradigms (here, this has always been done this way) and adopting new approaches to drive innovation and remain successful in an increasingly competitive and volatile landscape.
The fashion industry has always been very traditional and undisruptive.
It is unobjectionable that the fashion industry has never stood out for quickly embracing new work systems. Today, this must change compulsorily and as the need for innovation increases, many traditional fashion companies will begin to take elements typical of the startup culture and environment, encompassing rapid cycles of development, testing and learning.
The ultra-agile working system has recently been generated as an efficient alternative to stimulate innovation. Many large traditional companies from different sectors have adapted their organizational structures and practices to self-organized teams and interactive networks to improve speed, flexibility and innovation. Examples of this are the new ultra-fast fashion brands that have been born as online platforms with a typical method of startup, “try and learn”; using data analysis to order productions in small batches of models and quickly recognize which styles are sold before “placing the actual production orders”.
The professionals of the sector and the textile industry are excited and hopeful that both traditional companies and new fashion brands will adopt new talents, new investment systems, experiment with agility and work models typical of startups with the goal of boosting innovation and development. Only then will we be creating value!