Fashion Week in New York and Fashion's Role in Innovationby
It finally stopped raining in NYC and Fashion Week is booming along with run-way shows and parties. But the most important thing about this year’s Fashion Week is not the bling and the celebrities but the innovative new business models that are evolving in reaction to the Great Recession that might prove useful to startups and large corporations outside the fashion world.
The need to see “luxury” stuff and the need to cut prices to sell anything at this point in the economic cycle is leading to all kinds of
lower-priced business strategies and models. Pop-up stores that take over empty stores for a few weeks or months to showcase new designers are very hot in NYC and London at the moment. The innovation with the most scale, of course, is selling fashion online. The latest twist is having private, invitation-only one-day or even one-hour sales for expensive goods. Gilt Group has pioneered this concept. Gilt doesn't hold any inventory, it just sells what is offered momentarily by fashion companies. It allows the fashion companies to cut prices--but keep the price cutting within a self-selecting small group of people. That stops wholesale discounting--well, maybe.
As Gen Y moves into adult-hood, it wants to buy inside it's own culture--meaning on it's own platforms. That means online will play a much bigger role in fashion.
Parsons School of Design, where I now curate lectures on innovation, offers courses on this evolution of the fashion business model. These classes might be good for any business school student.