Changing Clothes: How Agile Retail is Disrupting the Fashion Industry

Business.com / Industry / Last Modified: February 22, 2017

Fashion has stumbled along for years without an influential infusion of new ideas. But all of that is changing, and it is happening fast.

What industry hasn’t been transformed by technology? Uber has changed transportation, Airbnb has disrupted the hotel business, and Amazon has challenged the largest retailers in the world including companies like Wal-Mart, Target, Best Buy and Sears.

All of them have capitalized on revolutionary technology to lower prices, improve the customer experience, and move their respective industries into the modern era.

Some industries have avoided that disruptive influence, chief among them is the tradition-steeped fashion industry. Not all, but many fashion brands are still clinging to the traditional fashion shows and storefront retail practices.

Fashion has stumbled along for years without a particularly influential infusion of new ideas. But all of that is changing, and it is happening quickly.

Related Article:Beacons are Beckoning: How Mobile Technology is Changing Retail

Agile Retail

A new industry, one that CEO Roman Kirsch calls "Agile Retail," is capitalizing on many of the principles that have made other stalwart tech companies successful in their respective industries. Agile Retail, which most closely competes with the likes of H&M and Zara, is a direct-to-consumer model that leverages smart data to predict trends, manage highly efficient production cycles, and achieve lightning fast turnaround on emerging styles.

In the mid-2000s, companies like H&M came on to the scene calling themselves "fast fashion" companies, promoting high fashion at warehouse prices. Every year they produce 10,000 to 15,000 new styles and sell them at their hundreds of locations around the world. Zara’s founder Amancio Ortega is now the richest man in Europe with an estimated wealth of more than $70 billion.

But consumers want more and better and Agile Retail companies have stepped up to meet that demand. Kirsch’s company Lesara was just named Europe’s fastest growing tech company by TECH5, posting a growth rate of more than 3,000 percent.  

And it is not a stretch to call Lesara a tech company. It looks, feels, and functions more like a technology business than a traditional fashion design company. There are no summer and fall collections, no fashion shows, and certainly no prima donna designers.

“We don’t just operate like a tech company because it is the most efficient way to run the business, we operate this way because it helps us make the fashion items that consumers want, and we are able to make them first,” says Kirsch.

Agile Retail companies represent a fundamental shift in approach. In a traditional fashion company, a venerated designer creates an entire collection solely based on his or her inspiration. These pieces are then flaunted down a catwalk for large retailers to preview and eventually make their way to store shelves six months later. This is a continued practice among large brand names like Gucci, Prada, Vera Wang, Armani and many more. But the truth is that getting a product to marketing in the Internet age can take much less than six months.

Related Article:Buying In the Cloud: How Cloud Technology is Revolutionizing the Retail Industry

Leveraging Data

Smart data analytics allow Agile Retail companies to read and even predict trends. They know what colors and cuts consumers are gravitating towards and can even adjust their production choices based on seasonal trends. Is it going to be a hot summer or a cool one? Will there be a lot of rain this spring? (Yes? Let’s make more raincoats in beige). What are people liking and sharing on Facebook, Instagram and Twitter?

Fashion trends like the Sneakerhead fad generate massive engagement on social media and provide plenty of useful data to brands curious to know what to produce next. The goal is to provide individuals with the high-fashion styles they like, with the utility they need, before they even realize it’s what they want.

Perhaps the most remarkable ability of this new breed of fashion-tech company is their ability to rapidly and efficiently produce new styles. Kirsch has gone on the record saying his company can produce upwards of 50,000 new styles every year and can take a style from concept to production to home delivery in 10 days.

The mainstream fashion industry is already feeling the pressure from this hyper-flexible model. Earlier this year fashion elites Tom Ford and Burberry both cancelled their shows at New York Fashion Week, announcing that they would be changing their internal practices to offer products for sale more rapidly and in season.  

Related Article: Mobile Retail: What You Need to Know About The Next Big Thing

Conclusion

Time will tell if we will see a showdown between Agile Retail and the fashion elite. We’ve witnessed retail giants being taken down by newer and more convenient web-based businesses. Not long ago, hundreds of Target locations opened in Canada, only to close down soon after. The reason? People don’t need more brick-and-mortar retail businesses that offer them the same products they already have access to.

People want a more personalized experience. They want their needs to be responded to faster and earlier. It’s long overdue, but the future of fashion is happening quickly. Soon the styles we desire and need will be available to us before we even realize what it is we want.

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