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2019 highlights: The year in innovation news

2019 was a big year for innovation and the Current Daily has been tracking it all throughout – from the rise of 5G-enabled experiences to the continued push towards a circular economy. 

Here, we highlight some of the most interesting stories from the year, outlining why they are an important indication of where the industry is moving in 2020 and beyond.

5G will drive 100m people to shop in AR

Augmented reality took center stage this year as its user-friendly features meant a growing number of brands – and social media platforms like Instagram – started adopting it as a core engagement strategy.

In April, a Gartner report highlighted that 100 million people will shop in AR once high-speed 5G mobile services roll out more extensively. This means the experience is going to be more seamless than ever, giving it better real-time rendering, shorter download times and reduced latency. Retailers seem to be on board, as 46% of them plan to deploy either AR or VR. Check out our piece exploring what other benefits 5G will bring retail.

Fashion brands have only met 21% of their circularity targets for 2020

If there’s one thing to be sure, there’s no escaping the growing momentum around shifting to more sustainable practices as an industry. But is there really progress being made? In July, the Global Fashion Agenda (GFA) launched its second yearly assessment of fashion brands and retailers to find that only reached 45 (21%) of the 213 targets the industry has set for 2020 will be met. 

This means the 90 signatories of the GFA’s 2020 Circular Fashion System Commitment, which includes fashion companies like adidas, PVH Group and Inditex, will have to hurry if they want to achieve more in the next year. We talked a lot about the need for action in this space when a further collaborative group was announced: the G7 Fashion Pact. If you ask us, it’s time to say enough to the pledges, rather give us some tangible outputs.

H&M to trial clothing rental for the first time

Talking of sustainability, one are where we have seen a lot of action and experimentation this year is in new business models. Rental is making serious strides at all ends of the market, but perhaps most interestingly within fast fashion just recently as the H&M Group announced it will trial clothing rental at one of its H&M Stockholm stores. Members of its customer loyalty program can now rent selected party dresses and skirts from its 2012-2019 Conscious Exclusive collections.

Recently, its brand COS also launched a pilot where it is renting out clothes through Chinese subscription rental platform YCloset, which customers can access through a monthly flat rate. We also published a deep-dive into the different opportunities we see for the industry in rental, here.

Allbirds CEO calls out Amazon product copying

In November, Allbirds’ co-founder and CEO, Joey Zwilinger, wrote an open letter to Amazon’s Jeff Bezos after discovering the e-commerce platform was producing its own wool sneakers similar to the brand’s most popular style.

Instead of going the usual lawsuit route, the founder took this as an opportunity to highlight his brand’s sustainability mission. In the letter, Zwilinger highlights that Allbirds’ sustainable philosophy is open source, and it has thus far helped over 100 brands who were interested in implementing its renewable materials into their products, suggesting Amazon might like to do the same. It was a bold move but one that sparked a conversation around the role of collaboration once more, and its critical place in true innovation.

Gen Z loves TikTok. Can fashion brands learn to love it too?

Gen Z quickly adopted Chinese social media platform TikTok as their app du jour this year for its bite-sized video content. Currently, 66% of the platform’s 500 million global users are under 30, according to data analytics firm, Business of Apps.

Brands have started to follow suit, tapping the app to drive engagement and ultimately sales. Content varies from crowdsourced, as in a recent Burberry campaign that saw users challenged to create the brand’s logo with their fingers, through to more refined, such as in a snippet of an interview with singer Shawn Mendes for Calvin Klein. We explored various other brands setting TikTok precedent, here.

Lush abandons social media

While TikTok has been taking off, elsewhere social media is slowing for some. Vegan cosmetics brand, Lush, for instance decided to shut down all of its activity in the UK as it became “tired of fighting with algorithms” or paying to appear on news feeds. Instead, it suggested a hashtag where fans would still be able to speak to the brand.

Lush’s bold move speaks to fight playing out for anything still resembling organic reach. As consumers become jaded over being ‘sold to’, brands are having to find novel ways to reach them, beyond the influencer route. One other area we’re tracking here is those owning their own conversation channels, as with both Glossier and H&M of late.

Coty acquires majority stake in Kylie Jenner’s beauty business

2019 was the year of major acquisitions in both beauty and fashion. While LVMH recently announced it was snapping up Tiffany & Co for $16bn, other names included Farfetch buying New Guards Group, which operates streetwear favorite Off White for $675m; Shiseido acquiring cult skincare brand Drunk Elephant for $845m; and more recently, Coty acquiring a majority stake in Kylie Jenner’s beauty business, Kylie Cosmetics, for $600m. 

The latter served as particular confirmation of how brands build and grow in this day and age. Jenner, who was 18 when she started a single ‘lip kit’ line, used Instagram to form a direct conversation with her audience. In 2019, this seems like an obvious strategy, but the reality star’s foresight to do so in 2015 has undoubtedly been her recipe for success.

How luxury fashion learned to love the blockchain

Amid growing concerns over the proliferation of counterfeit goods, luxury brands also began to embrace blockchain as an important authentication tool this year. 

Earlier this year, we heard about how LVMH launched its own platform, Aura, which is currently being piloted with some of the brands in its portfolio and will further expand in the future. Kering and Richemont meanwhile are said to be exploring this too, while De Beers is using it to trace its diamonds. Once matured, the technology will undoubtedly make its way into the hands of the consumer, who will be able to better understand where their possessions are coming from. We also tracked some of the other innovations in the transparency space; an area that continues to heat up.

Automation in retail: an executive overview for getting ready

Automation was another big tech focus this year, particularly for its potential impact on retail, from supply chain management to last mile delivery. This shift is putting pressure on retailers to rethink their operating models, distribution centres and headquarters, with McKinsey warning that brands that fail to implement it into their strategy risk falling behind. 

Automation is something we’ve long been talking about for the sake of efficiency, but there also comes a significant ethics conversation to be had here, which the industry is exploring. We agree, now is the time.

What Fortnite could mean for fashion

The global gaming market is expected to reach $180bn by 2021, and fashion brands are realizing the valuable potential in this. Free-to-play video game Fortnite has grown into a multi-million dollar business by selling clothing to image-conscious gamers, for instance. This monetization of player aesthetics, more commonly known as ‘skins’, has opened the door for retailers to cash in on the virtual world. 

Going forward, we expect more brands to invest in digital garments or utilize gaming to drive product discovery. We accordingly explored how gamification is being used in the shopping journey by brands like Kenzo and Nike to both increase engagement and build brand loyalty.

How are you thinking about innovation? The Current Global is a transformation consultancy driving growth within fashion, luxury and retail. Our mission is to solve challenges and facilitate change. We are thinkers and builders delivering innovative solutions and experiences. Get in touch to learn more.

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Ganni: Taking risks for long-term return

The most important question everybody needs to ask themselves relative to a more sustainable fashion industry is around cost and long-term thinking, explains Nicolaj Reffstrup, founder of Danish fashion brand, Ganni, on the latest episode of the Innovators podcast.

“If you really want to do something, you need to look at the fabrics that you’re using and see if you can convert those to recycled fabrics, or at least organic fabrics. But that comes with a cost. So the biggest and most important question everybody needs to ask themselves, is literally how much are we spending on converting our company or our brand and our product towards a more sustainable future?” he asks.

Oftentimes, the immediate follow-up query to what is the cost, is who is going to pay for it. The majority of brands in the space – including those actively making moves towards adapting their business processes – are measured on short term returns. And yet sustainability is not an overnight fix. To make the changes that are really necessary throughout the supply chain is a big and long-term investment.

So how do we convince CFOs and shareholders that it’s worthwhile – that we have to take a hit now in order to benefit in the future. Or more importantly, that there is indeed a business case there to do it full stop?   

Ganni is one exploring it from all angles. The fact it’s small and agile means it has more ability to do so, but it also means it relies entirely on an outsourced supply chain to drive the agenda forward. Power is therefore limited, but ambition is not.

Rachel Arthur, co-founder & chief innovation officer at Current Global & Nicolaj Reffstrup, founder of Ganni

Join us as we discuss with Reffstrup how the brand is flexing its muscle as well as making investments to drive towards a more sustainable future. We also explore how he’s watching innovation from other industries like food, the new rental business model he’s testing, and why he believes sustainability and fashion is a contradiction that needs to be faced by all brands.

Listen here: Entale | Spotify |  Apple Podcasts | Android Google Podcasts | Stitcher | RSS

Catch up with all of our episodes of the Innovators podcast by the Current Global here. The series is a weekly conversation with visionaries, executives and entrepreneurs. It’s backed by the Current Global, a consultancy transforming how consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more. 

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Rent the Runway launches data-driven clothing line

Luxury clothing rental platform Rent the Runway is leveraging years worth of consumer feedback to launch a range of new clothing lines driven by data.

The “Designer Collective” lines will feature 10-15 items of clothing and be developed alongside prominent US-based designers, such as Jason Wu, Derek Lam and Prabal Gurung, with prices averaging on $350.

Rent the Runway’s business model allows customers to rent expensive designer pieces for a fraction of the retail value. Once clothing is returned, customers are asked to fill out surveys about their fit and style preferences.

“We have millions of data points that our customers provide about wear rate, where they’re wearing the clothes, fit by style and sizes, demand by hem line, sleeve length, demand by geo region etc, and all the feedback is funnelled to our designers,” a spokesperson for the company told FashionUnited.

For designers, this means access to an entirely new audience. “A reality of our business is that we sit at a luxury price point, which isn’t accessible for everyone. Partnering with RTR allows us to connect with a younger customer,” designer Prabal Gurung told BoF. “We’re able to start a relationship with this client … and when she does rent the piece that really resonates with her, that she can’t bring herself to return, we’ve seen it convert, and that’s a beautiful success.”

While some designs will be developed from scratch, others will simply feature adjustments exclusive to the platform’s customers. For example, Gurung’s first line will be entirely based on his main collection, but in colors and prints that respond to RTR’s customer feedback.

Speaking at NRF’s Big Show earlier this month, Jennifer Hyman, Rent the Runway’s co-founder and CEO, said: “Data is such a fundamental piece of what we do. We’re exchanging a massive amount of it [with designers] on how their products are being worn, what events they’re being worn to, and how their products or dresses last over time,” she says, adding that this helps brands iterate their designs to better suit customer wants and needs. “The data we have in renting clothing over time is so important to the manufacturing of clothes.”

How are you thinking about innovation? We’re all about finding you the perfect partners to do so.TheCurrent Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more. 

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Vince launches retail subscription service, Unfold

Vince AW18 Campaign
Vince Fall 18 Campaign

Vince is launching a clothing subscription service, titled “Unfold”, which will include priority delivery, returns, laundry costs and insurance for a flat monthly fee of $160. In doing so, the US-based brand will be the first contemporary fashion label to offer this type of subscription service.

“Vince Unfold is an innovative new subscription service that will tap our existing product assortment to drive incremental revenue while further advancing awareness of the Vince brand,” Brendan Hoffman, CEO of Vince, tells WWD. “We believe that subscription services will play a much greater role in consumer shopping patterns in the future.”

Every month, customers will be able to rent up to four pieces from the retailer. If the customer wishes to keep the piece they rent, they can purchase it at a discount of 20-60%, depending on the seasonality of the merchandise.

According to Hoffman, rental platforms are becoming increasingly relevant in the fashion industry. For example Rent the Runway, which pioneered the subscription model in fashion when it launched in 2009, has just announced its expansion into 15 WeWork office buildings across the US, where customers can drop off return items for the retailer. In another example of retailers embracing the sharing economy, earlier this year London-based department store Browns teamed up with luxury rental service Armarium to offer its customers high-end fashion for rental for two weeks in the summer.

How are you thinking about innovation? We’re all about helping you build innovative integrations and experiences. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology, powered by a network of top startups. Get in touch to learn more.

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Retail

Ba&sh’s new NY store offers free clothing rentals

Ba&sh in New York City

French label Ba&sh’s new store in New York allows shoppers to borrow the brand’s clothes at no cost, as long as they are returned after the weekend.

The 1,700-square-foot space, located in Soho, aims to act as a “dream closet” and position the brand as a friend the customer can borrow clothes from whenever they have a special event. Customers borrowing clothes can only do so every Friday between 5-7pm, and they must be returned by Monday at 7pm.

The opening is part of a bigger expansion strategy from the company in the North American market, as well as a customer engagement push that includes a series of permanent in-store activities.

“It’s an experiential store, the first one designed to thoughtfully elevate the existing experience to a new level. The store was a natural evolution. Our brand has always been rooted in special relationships,” said global CEO, Pierre-Arnaud Grenade, to WWD.

The brand, which currently operates 200 stores globally but only five in the US, hopes the new space also works for customer awareness and acquisition – by making clothes available to rent free of charge, it allows customers to discover the brand more easily. For this launch, a pop-up area will promote other French brands who have no US presence, such as jewelry label Atelier Paulin and luxury candlemaker Baobab.

The space will also offer a series of events that encourage customers to bring a friend, such as monthly supper clubs, weekly French lessons (of which 75% of the cost is subsidized by the brand), weekly complimentary French breakfast and a children’s play area so customers can shop in peace.

As part of the strategy, the brand’s e-commerce team has also relocated to the city. Currently, 20% of the brand’s US sales are completed online, which is higher than the rest of the world.

The moves comes as consumers increasingly look to the notion of the sharing economy – borrowing or renting items rather than having ownership of them. It’s through this that businesses including Rent the Runway have grown in relevancy in today’s market. One  fifth of millennials reportedly now say they would consider renting clothing, according to Hammerson and Verdict.

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.