Strategy in the world of high fashion

It wouldn't seem that business strategies in the world of high fashion had much relevance to the strategies needed for businesses in the information age. Yet, there are some startling parallels. 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 using bottom up strategies for design and communication. Understanding the way in which this industry works provides many valuable clues for designers of e-business and e-commerce solutions.

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 realise 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 destabilise. 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 another 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 centre 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 organisation 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 all 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'd used the same strategy for buying from the designers in Kensington Market as I'd used with my head shop wholesalers. I simply told the designers to provide me with the designs that were selling i.e., the designs they found to be selling best in their own retail units. Thus, when it came to deciding what designs to make in my own workroom I didn't have a clue. Unfortunately, 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 saleable 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 added some 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 of 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.

As with the head shop business, I had virtually no participation in any of the actual functioning of the company. Apart from some hassling, 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-organise 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.