Embracing disruption facilitates success no matter what industry or business game innovators or entrepreneurs play in. As an impressionable young girl, I used to greet my father when he arrived home from work, by asking “How many coats did you sell today?” That’s because my father, in hot, distant and sunny post-war Australia, was a fashion manufacturer and serial entrepreneur. Initially, he designed, manufactured and sold coats and suits to Australian women, who wanted to keep up with the latest European trends. Later on, he manufactured a funky collection of young fast-fashion ranges, to the 1960’s and 1970’s Carnaby Street wannabees, and for a long time, he was very successful at it.
What does a serial entrepreneur, who sold thousands of coats and suits, and later frocks and pants, to a wide range of women, in a hot, humid and tropical climate have to do with serial entrepreneurs and embracing disruptive innovation?
Growing up in the highly competitive, entrepreneurial and volatile fashion industry continually exposed me to constant disruption, and to what disruptive innovation really means! Fashion in the 1970s and 1980s was absolutely driven by entrepreneurs who embraced disruptive innovation, yet, we didn’t call it that then. It was a volatile, energetic, exciting and competitive industry full of creative dreamers, serial innovators, start-up entrepreneurs, masterful merchandisers, influential marketers, and savvy business people.
Yet, it too was seriously disrupted, and ultimately, has not survived.
Clayton Christensen outlines in his now disputed 1997 book, ‘The Innovators Dilemma’ that successful companies are upended by new technologies that first appear as cheaper products with fewer features, but improve quickly and ultimately take over.
In the case of the Australian fashion industry, the major disruptions arose, like all innovations, from a convergence of forces;
- A set of severe changes in government policy resulting in the removal of protective tariffs, duties, and quotas.
- This allowed the quick shift from expensive and no longer protected local design and manufacturing to cheaper offshore high volume, fewer features, competitive manufacturing.
- The introduction of design enabled technology which meant that almost anyone could become an entrepreneur and fashion ‘designer’.
- The introduction of just in time manufacturing processes locally and in overseas facilities.
- The shift from consumer to lifestyle marketing, designers were no longer crafting products they thought customers ‘might’ like, they had to understand their target market at a visceral level, to assess and meet their lifestyle needs.
- The movement from single ‘one-man-band’ fashion retailers, to vertical retail operations and department store, offshore assembled and manufactured own brands offered at lower prices, improved consumer marketing and increased customer service.
True to the overriding disruptive innovation principle, where successful companies are upended by new technologies, resulted in the demise of the Australian fashion industry. Where the proliferation and consumer acceptance of cheaper products with fewer features took over. No longer being able to sell higher value, more expensive and innovative items, entrepreneurs in the Australian fashion manufacturing industry, I grew up with and worked in, ultimately died a sad and tragic death. It is only just emerging from a 30-year hiatus into a creative and formidable local force.
However, as Larry Downes and Paul Nunes state in their book, ‘Big Bang Disruption: Strategy in the Age of Devastating Innovation’ that in industries dominated by digital technology, disruptors will arrive better and cheaper than existing goods, right from the start, in what they call ‘big bang disruption.’ Applying this to the fashion industry example, we can see some really ‘big bangs’ have emerged from digital technology in the past 10 years.
One of these includes the rise and dominance of vertical global fashion and lifestyle brands such as the Spanish Zara Group, to name just a few. Zara has adapted, changed and succeeded in building growth and shareholder value by shifting their business model from a design base, as in the case of my father’s business; which was high cost, high price, low profit – to a low cost, low price, high-profit base incorporating a lean manufacturing business model.
By using technology and entrepreneurship to;
- Business model innovation coupled with solid commercial acumen.
- Track and measure the buying habits and behaviors of tightly targeted global and local consumer segments.
- Align design efforts to satisfy their target consumer global and local market segments, even in terms of constantly updating their core design ‘block’ templates and size range offerings.
- Align their pricing strategies tightly and consistently to consumer expectations.
- Experiment with fresh, small prototype fashion ranges, every four to six weeks to test and validate the sales potential of fresh and innovative product ranges.
- Manufacture ‘just in time’, in the lowest cost geographic locations, using stringent, low cost, efficient logistics management systems.
- Offer fresh fashionable, lifestyle-oriented, low-cost product ranges to their marketplaces consistently to a focused seasonal time schedule, in-store and online aligned to a targeted promotional strategy.
And I haven’t even mentioned how so many entrepreneurs and fashion companies are working towards disrupting this space with a range of unique, niche-oriented e-commerce stores. Where your habits and preferences are tracked by high tech, artificial intelligence; you can ‘try’ clothes on using virtual reality and simulation technology, save money by buying direct, get your order shipped free, earn status credits and pay via your credit card.
I can’t possibly yet imagine what 3D printing and gamification are going to do to allow for even bigger big bang global disruptions to emerge in the fast, fickle and fabulous global fashion and lifestyle industries!
It may be useful to pay deep attention to, and track the convergence of forces at play in your industry and beyond, to see which entrepreneurs are disrupting your market and who can potentially create the big bangs that will disrupt your market in the future.
If you take the time out to retreat and look carefully enough, you will notice that the evidence or foundations are already out there! You just need an innovator’s global mindset and the ability to see the world with fresh eyes, know how to listen for and generate possibilities, and create the openings and new thresholds for disrupting and flourishing in your business game.
I must admit that in one of my previous lives I was a senior executive manager in the Australian mega Coles Myer Department Store Group in the 1980s, I was Marketing Development Manager and Fashion Director, responsible for analyzing and conceptualizing lifestyle and consumer trends three years in advance.