Decoded Fashion Forum // Lincoln Center
Yesterday was the launch of the Decoded Fashion Forum at the Lincoln Center - a conference platform bringing together the worlds of tech and fashion. It was incredible to see a visible push to innovate within the fashion vertical, using the tools and capabilities that tech provides. The panels were professional and very informative (shocking, I know!)
Below you will find 7 of my favorite ideas/questions spurred by the day’s events:
Social Media as the Antithesis: You wouldn’t expect to hear this tidbit at a conference that is working to merge the tech and fashion world but when you think of social media as omnipresent, you remember that high fashion is the opposite. High fashion is supposed to be almost unattainable, secretive and rare. But as luxury brands are thrust into the social media world, they have all been forced to adopt a different strategy. Technology has begun to shape our own social interactions and thus the interactions of the products/brands we create. Deborah Lloyd, of Kate Spade, says there is no point fighting the beast. Social media is the new wave and to be relevant one must be a part of it. Kate Spade has integrated almost seamlessly with the world of social media. Their twitter brand ((@katespadeny) has a life of its own with approx 244k followers and is by far my favorite brand to follow. Although the brand understands the importance of product, the majority of their posts are not product related. Instead, they tell a story…a brand narrative.What do you love, what do you notice, what do you admire if you are a ‘Kate Spade Girl”? Images include everything from the bright yellow sunflowers at the flower shop on Broome Street to swimsuit launches for their poolside collection. Alice + Olivia, Nicole Miller and DKNY build out their brands in a similar way (DKNY actually just launched their new tumblr site.) If you can live the life of an A+O girl or a Kate Spade girl, you will be more likely to buy their products. Its a inverse channel which is story based, even if it errs on the side of too much information. From an investor’s point of view, the bottom line is: The incorporation of social media in a space that is all about its “closed doors” is incredibly positive. The concept of a social network has been truly validated.
Location? What Location?: When given an option between Instagram and Twitter, I wasn’t surprised to hear most designers went with Instagram. I’m not sure if the answer would have been the same prior to the Facebook acquisition. The $1 B tag may falsely be driving up the perceived value of the app. However, the shocking realization I had in the midst of the conference was when a moderator asked designers about the use of Foursquare in the larger scope of social media use. There was complete silence on stage. It occurred to me that location features are not as important in the fashion world. The statement seems contradictory because one would think retail is ALL about location. You want the customer to see your advertisement at the point of decision (at a retail location!) But for high fashion, retail locations are limited. Your product isn’t mass produced and the decision making process (from ad to purchase) is a longer sales funnel (one that must be supplemented by visuals and brand promotion). Location, as a result, becomes less important.
The Resurrection of Brick and Mortar: One of the most impressive presentations at the conference was by Bonobos Founder and CEO Andy Dunn. We are used to seeing a trend of traditional businesses move into online channels for the purpose of efficiency and lowered costs. Bonobos is doing the opposite. They built their brand online with three components in mind: 1) Fit, 2) Customer Service, 3) Fun. The Bonobos Team perfected these three elements and hit the business out of the park. Big, traditional companies like Nordstrom noticed and got involved, leading a $16.4 mm investment in the company in April and opening the Bonobos product to 100 stores worldwide. With their investment, Bonobos is not only going offline but also using Nordstrom expertise to open up their first retail location in Boston on Newbury Street. Andy referred to these locations as “e-commerce showrooms” or “guide shops” - modeled around a 45-appointment period for each customer. He remarked: “Convenience is crucial but people still want to touch and feel their clothing…Why shouldn’t we give them two channels?” What I like most about Andy’s concept of an “e-commerce showroom” is the idea that tech doesn’t always have to “eliminate” what came before it. The past has value and tech serves to advance that value. Traditional retail isn’t dead but it can sure as hell get better.
Core Business vs. Industry: Charlie O’Donnell of Brooklyn Bridge Ventures made an interesting point on the Investor Panel. As an early stage investor, he said industry verticals are less important than core business principles. “All companies have the same problems in the first 6-8 months.” Citing Birchbox as an example, Charlie went on to say, “We shouldn’t need to know about the industry when we think about the company as a core business.” He remarked that VC’s were asking their girlfriends or wives for advice on the Birchbox product because they couldn’t wrap their heads around a female-oriented concept. I understand where he is coming from but do not entirely agree with his point. Core business principles are important, yes, they are - but you can’t separate industry from business. The two are fundamentally related. The reason more investments haven’t been made in the fashion space is because there aren’t enough female investors. It is that simple. For such a large, desperate-to-be-disrupted industry, the lack of investment only proves my point. It can’t just be that these businesses haven’t understood “core business principles” - there is a lack in knowledge sharing that needs to be supplemented by those who understand it best.
The Elimination of Size: There were several startups at the conference that were building technology that highlighted “fit” as the main driver of a customer’s purchase decision. This technology ranged from software widgets that you could access from any device that saved your body measurements to entire body scanning kiosks placed in malls that told you what item of clothing fit you best. Size was rarely mentioned. In fact, one CEO I spoke to said the whole concept of size was going to disappear as adherence to “personal fit” became popular. His hope was that in 2-5 years, we wouldn’t talk about dress sizes in 2’s or 4’s but instead as “custom-made” for the average person. I loved the idea since it ties in with my investment thesis supporting companies bringing previously unattainable luxury habits to the masses (Uber is an example - “everyone’s private driver.”)
Augmented Reality: Augmented Reality was another commonly addressed theme. A conference attendee asked a great question: Is augmented reality the vehicle or the destination? I think he hit the nail on the head. Retailers who will ultimately use augmented reality as a technology platform need to ask themselves whether they want it to drive sales or whether they want it to BECOME another sales channel. Even though Augmented Reality of the Mission Impossible variety is not yet available, major retailers and department stores are making inroads. For example, The Bloomingdale’s window display on 59th allows customers to get a digital picture taken (while standing outside) of themselves in order to try on designer sunglasses virtually. It has been driving a lot of customers into the store and I’d be interested in analyzing the ROI.
Platform/Network vs. Device: Most of the companies that presented at the conference were what I would call “soft tech” or “network-based.” That means they were not based on a hard entity through which an operation was conducted. The evolution of tech today is moving away from tangible technology to platform-based or network-based tech (softer tech.) For the fashion industry in particular, tech is allowing companies to do what they already did, better. Charlie O’Donnell said it best: “There is nothing tech based that makes fab.com, fab.com.” Of course, it’s an online platform that aggregates good design and is accessible to millions of users but the real value proposition is the utilization of a core fashion skill set – a great eye for curation. This skill set, when positioned on a platform has built a successful, money-making network.