Liquidity, everything is getting liquid. Bauman described our modern life as “liquid modernity“, where change is happening faster than ever. Relations, connections, organizations are ephemeral, flexible, plastic. As Politics, Economy and the organization of Society, businesses are already including “liquidity” in their value chain, from defining processes to defining their resources and capabilities. In the liquid era, the rule is: “Be fast, adapt even faster, be resilient, or “game over”.
In a previous post about Fast Fashion and the liquid era, I described how the fashion industry is evolving into a micro-segmentation of collections that impacts on the whole value chain, from design to retail. One of the consequences is how companies are creating agile processes and creating platforms with external partners with the goal of being faster and more efficient: tracking social trends thru social media listening; producing badge collections (drops, capsule collections) with short lead times using artificial intelligence (e.g. machine learning) to better forecast demand or put the right product in the right place; delivering thru an uberized / liquid workforce that is approaching last-mile in a more efficient way, amongst others.
The Liquid Value Chain in Fashion
Digitization (e.g. AI, AR / VR, 3D Printing) is redefining the relation between customers and brands, enabling businesses to meet new customer´s expectations. Fashion is a mirror of our society, it´s an industry where product goes beyond functionality or a basic need. Fast-fashion successfully answered to instant gratification and the feeling of “uniqueness”, but the value chain is under transformation again. Technology is accelerating the process, transforming the linear fashion retail supply chain into a seamless, liquid value chain. Brands are using social media to track customers or millennial´s behaviour, comments and likes, and artificial intelligence is helping them to analyse these insights. See Fashtech: how Fashion and Technology are transformation the fashion retail industry.
Zara is, no doubt, the fashion retailer that is better adapted to the liquid value chain, integrating retail and online capabilities. There are many interesting articles about how Zara is leading this era, but I found more interesting to describe how competitors are trying to get closer to these leading best practices. This is the case of H&M, a top leading fashion retailer but with an old-fashion business model (e.g. low-level of customer centricity, selling two collections a year, with some capsule collections between; manufacturing thru external suppliers in off-shore locations, and so on).
AS-A-SERVICE DESIGN MODEL
Recently, I read some news about how H&M´s new fashion brand Nyden is transforming the standard design process into an “as-a-service design model“. Their objective is being closer to the customer and produce fresher collections, this means more than two collections a year.
As they mention in their site, Nyden is not a traditional fashion brand. “We are a platform with a soul, co-creating with talented tastemakers and empowering their creativity. There are no collections, no seasons – just a stream of relevant drops and events. We put tribe leaders at the center of the design process, sharing their stories and helping their creativity make an impact.”
Example of Nyden´s co-creators: Jérôme Boateng (football star) and Justine Skye (singer)
H&M recently reported poor results caused, partly because high inventory levels. A strategic solution is going into fast-fashion, producing less volume but more variability. This is what Nyden is doing, taking profit from platforms such as Instagram and also thru collaboration with niche influencers to boost creativity / design, offering more variety to customers. More variety, more visits to stores, higher inventory turn (lower levels of inventory), more cash, and less risk of over stocking, reducing seasonality risk.
Instagram polling tool
Nyden is crowdsourcing design on instagram, having a better approach to the latest-trends. Liquid design, with a customer-centric approach, is a way to compete in the new fashion industry era (but also need to take into account sustainability, a key trend right now).
Read more about how Nyden is creating fashion drops thru design co-creation:
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