Strategy in the world of high fashion
by Peter Small
Known as the 'Rag Trade', the industry involving high fashion and designer clothes is as tough and competitive as anything likely to be encountered in e-business and e-commerce. Like the world of digital communications, it is an environment of continuous and unpredictable change. Fashions come and go. Trends develop and then quickly disappear. It is the perfect environment for the entrepreneur.
The Rag Trade can be split into four separate sections: designers, manufacturers, wholesalers and retailers. To see how various entrepreneurial and corporate strategies coexist and compliment each other within these categories it is essential to realize the fashion industry isn't about clothes and designs at all: it is about information. It is about people's need to establish themselves in a social pecking order and associate with a particular social group. Fashionable clothes are communication devices, they make a statement about the wearer, identifying them with a group and their position within a group.
Changing fashions exhibit all the characteristics of a complex dynamic system. Change is erratic and unpredictable. Stable fashions or trends emerge; these will suddenly change and destabilize. For a while there is a mixture of different fashions and then this suddenly settles down into a new emergent style. This has all the hallmarks of chaos. It is unpredictable; it has erratic periods of stability and instability and the phenomenon of emergence.
To understand the fundamental mechanism driving this chaotic environment we'll look at one of the dialogues from the CD-ROM "How God Makes God": It is a conversation between a man and a woman. It is in the 1970's and a man is trying to explain to the woman how he chooses the fashions to buy for his boutique.
"Do you remember a few years back there was a craze to wear a gold or silver razor blade on a chain about the neck?"
"Yes I do. My, friend Annie had a pair of solid gold earrings in the shape of tiny razor blades. They were all the rage then."
"The razor blade, as you may or may not know, is associated with cocaine because a razor blade is used to chop up cocaine crystals into a fine powder and spread it into thin lines to make it easier to sniff into the nose."
"What sort of people are you talking about?"
"In the early 70's, the use of cocaine was confined mainly to pop stars. Within the groups that hung around with the pop stars it became fashionable to wear a razor blade around the neck because it identified the wearer, by association, with the exclusive pop group sets."
"You mean it was a signal that only those in the know could identify with?"
"That's right, and as pop stars associate with fashion leaders the razor blade decoration was adopted by some of them: causing the razor blade to become associated with the top fashion sets. The razor blade decoration was then copied by people who copied the fashion leaders. These in turn were copied by others who were one step further removed again from the top fashion set. Gradually the fashion spread out to the whole population, as people in groups followed their own group's trend setter, triggering the copying actions of other groups further and further away from where it all started. By the time the craze reached the high street shops it had completely lost its association with cocaine and most of the wearers would have been horrified if they had been aware of its significance."
"How does this relate to you buying dresses for your boutique?"
"It is a good model to explain how fashions and trends spread. Ideas starting from an influential group spread through the population because people want to identify themselves with others. Group leaders take ideas from the groups above them in a perceived hierarchy and the groups follower their leaders' initiatives."
"I get it. Trends and fashions spread through the population in the same way that ripples spread out over a pond when a stone is thrown into the middle. So how can you benefit from knowing this?"
If I observe people at the center of fashion and watch how their ideas trickle down to the groups my customers belong to, I can anticipate their needs. I can arrange to buy my stock just before they need it?"
"But I thought your boutique was successful because you had an eye for what looks good?"
"No, I watch people. I look for groups. I try to distinguish between the leaders and the followers. To be a successful fashion buyer, you have to look beyond your own immediate surroundings to see how it's being influenced by the rest of society. The world isn't a haphazard conglomeration of people meeting and interacting with each other at random; there is order and organization out there if only you can see it."
The idea behind this simple model allowed me to break into the fashion business at a time when London was leading the world of fashion in the early 1980's. All that was needed was an appropriate communication strategy.
It began from a small boutique I had in Newburgh Street, a little street that runs parallel to Carnaby Street. I called the shop "Street Theatre" and started off by buying dresses from some of the designers who were trading in Kensington Market.
At that time, Kensington Market, the former hippie market in Kensington High Street, London, was populated by many graduates from the various London fashion colleges. Failing to get employment in the fashion industry they had set up their own little workrooms and retailed their products from stalls they rented in this market. As retailing was so precarious, most of them also wholesaled their products to boutique owners like myself.
As the business expanded I could no longer get enough stock from Kensington Market and had to set up a small workroom myself. I had a friend who'd worked for many years as a dressmaker and pattern cutter and I employed her to run the workroom. She bought a few sewing machines and other technical equipment for making dresses. But, we were then faced with the problem of what to make.
I didn't know how to judge what was currently in fashion, let alone know what the fashion was likely to be in the future, neither did the lady I had employed to run the workroom. Although technically skilled, she had no more idea than I had as to what fashion designs to create.
I'd noticed that of the clothes I'd bought from Kensington Market, the items that sold best were those I'd bought from young trendy designers who were always out clubbing. As the Carnaby Street area was very near to the center of the London Rag Trade (the streets just to the North of Oxford Street) it was frequented by many trendy young designers. Most of these were either fashion design students or graduate designers looking for work.
There are probably as many young people aspiring to be fashion designers as there are aspiring to be pop stars. Fashion design colleges all over the world turn out hundreds of thousands of fashion designers every year. Quite a considerable number of these are exceptionally talented and creative, but unfortunately, only a very small percentage ever make it into the commercial world of fashion where their designs are actually worn by people.
Talking to some of them, I found they would be only too delighted to have an opportunity to create designs for my workroom. So, choosing on the basis of how trendy they were and which clubs they went to, rather than how skilled they might be at making dresses, I employed them on a freelance basis to create designs.
Most of the garments they produced were not very practical, but, the designs reflected the designer's interpretations of what they were seeing in the trendy London clubs. Combining the essence of these designs with the professional skill of the lady who ran the workroom, many of these designs could be turned into very sellable and highly fashionable products.
What I'd produced, out of necessity, turned out to be an extremely effect design strategy. The young and inexperienced designers were producing design information about the latest trends and fashions in the London's trendiest clubs. They weren't describing them or drawing them; they were producing samples that reflected the trends and at the same time adding a little originality. It was the perfect information for the experienced dressmaker to work with.
Not surprisingly, the shop began to acquire a reputation. The fashion press were visiting the shop and the "Street Theatre" designs started to appear regularly in the fashion pages of prominent fashion magazines and even in the fashion pages of national newspapers.
It wasn't long before this attracted the attention of other boutiques who began to buy dresses from us. It also attracted the large multiples who offered us concessions (sales space in their stores where they took a percentage of the takings). The demand soon outstripped the capabilities of our small workroom and we had to use the services of a manufacturing company to make up our designs. Within a few months we'd grown into a fair sized business.
The way I was seeing it at that time was as a business made up of flexible modular units. We had many retail units, a wholesale unit, a workroom unit, a manufacturing unit and a nebulous creative unit. It was this creative unit that most interested me because I saw it as the engine that was driving all the other parts. If this creative unit ran out of steam all the rest of the units would grind to a halt.
I then increased the number of designers who were producing the samples and asked them to produce at least one a week and bring them along to the workroom on Friday afternoons. I also arranged for many of the sales staff to be in attendance so that we could hold a private fashion show: with staff and designers wearing the week's creations and strutting across the large fabric cutting table in the workroom. Sales staff and designers would then comment and vote on the selections. In this way, the system had a constant flow of design input and a selection procedure.
It soon became apparent that the feedback from the staff was an important factor in this process and I started to employ people who were totally unsuitable as employees in the normal sense but who were invaluable in this interactive design selection process. They were club people: wannabe models and wannabe pop stars. If fact some of them did make it. There were two who went off to become successful designers in their own right, another who became a highly paid international model.
The most bizarre of all the staff I employed at that time was a pop mad, gay guy who lived is a squat and always arrived late for work exquisitely made up and dressed like a woman. However, he was a great influence on not only the designs but the whole atmosphere of the company. He didn't do much actual work except for some imaginative window displays and spent most of his time on the telephone getting a pop band together. He called his band "Culture Club" and went on to become the world famous super star: Boy George.
I had virtually no participation in any of the design side of the company. I tried as much as possible to keep my opinions completely out of the picture. I simply set the system up and let it self-organize and as a result "Street Theatre" became one of the most famous fashion companies of that time.
In retrospect, what I had done was to ignore the technicalities of manufacture, ignore the creativity of the designers and set up an information flow that came from the trendy London clubs, directly into the garment manufacturing unit.
It's about communication strategies
It may be difficult to map this exotic scenario across to e-business and e-commerce. The trick is to use an abstraction: extracting out the essence of the system, shorn of all the detail. The bottom line here is that an unconventional business approach had organized people into a communicating framework.
It is quite obvious that the real work was being carried out by the professionals: the lady running the workroom and the expert technicians in the manufacturing unit, but, it is not so obvious that these professional were working on designs that had evolved from the erratic and inexpert opinions of a small group of totally unreliable people: most of whom wouldn't have any chance at all of being selected for a position in a respectable company.
The significance of this can only be truly appreciated if seen in the context of the whole of the Rag Trade. There are thousands of designers, wholesalers and manufacturers vying with each other for the attention of the public and the fashion press. Some of the companies are large, employing hundreds of people that included dozens of top class designers with CVs as long as your arm. Yet a motley crowd of amateurs had come from nowhere and got out in front.
It might be pertinent here to ask who was the designer or the decision maker. Who created the successful designs that took this company to the front in a highly competitive field full of experts? It certainly wasn't me. It wasn't any of the staff. It was the system: designing itself.
The success was not brought about by expert knowledge and skills (although they were an essential part of the evolving organization.); success came through the creation of a suitably focussed communication network. Isn't this what the Internet is about? Isn't it a perfect environment for creating imaginative communication strategies. There is the same common denominator - it isn't about the technology, it is about communicating with people.