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What you missed: Amazon’s AI designer, sewing robots at Nike, AR iPhone apps

Inside the Grabit robots making Nikes
Inside the Grabit robots making Nikes

A round-up of everything you might have missed in relevant fashion business, digital comms and tech industry news over the past fortnight.


TOP STORIES
  • Amazon has developed an AI fashion designer [MIT]
  • A new t-shirt sewing robot can make as many shirts per hour as 17 factory workers [Quartz]
  • These robots are using static electricity to make Nikes (as pictured) [Bloomberg]
  • A preview of the first wave of AR apps coming to iPhones [Techcrunch]
  • In a Zara world, who orders custom clothing? [Racked]
  • What happened to wearables? [BoF]

BUSINESS
  • Matchesfashion.com sells majority stake to Apax after fierce bidding war [NY Times]
  • Making sense of Chanel’s secret filings [BoF]
  • Is Nordstrom the next acquisition target for Walmart or Amazon? [RetailDive]
  • North Korea factories humming with ‘Made in China’ clothes, traders say [Reuters]
  • Is counterfeiting actually good for fashion? [HighSnobiety]
  • C&A Foundation highlights ‘gaps to overcome for clean and circular fashion’ [Fashion United]

SOCIAL MEDIA
  • ‘Game of Thrones’ actor Maisie Williams will kick off new Twitter series for Converse [Creativity]
  • How Instagram and Snapchat are benefiting from Facebook’s declining teen and tween numbers [AdWeek]
  • Facebook furthers WhatsApp monetisation efforts with verified business pilot [The Drum]
  • Condé Nast and Facebook are debuting a virtual reality dating show [AdWeek]

MARKETING
  • Zalando turns festival into three-day live marketing campaign [BoF]
  • Donatella Versace works with eight creatives for new versus ads [WWD]
  • 40% of consumers want emails from brands to be less promotional and more informative [AdWeek]
  • In first-ever TV ad, Patagonia targets Trump administration [MediaPost]

RETAIL & E-COMMERCE
  • What is Amazon, really? [Quartz]
  • How Westfield is combating the Amazon threat with digital upgrades at its malls [Digiday]
  • Betting on brick-and-mortar: Alibaba’s billion-dollar retail experiment [Forbes]
  • H&M’s Arket encourages transparent shopping on its new e-commerce site [WGSN]
  • Uniqlo’s retail empire embarks on a digital revolution [Nikkei]
  • Farfetch Black & White partners with Certona to offer personalised e-commerce to luxury brands [The Industry]
  • Shopify’s e-commerce empire is growing in Amazon’s shadow [Bloomberg]
  • Voice search, 3D modelling and chatbots named as 2017’s most significant e-commerce trends [The Drum]

TECHNOLOGY
  • 11 tech leaders share the real truth about artificial intelligence (and what really matters) [Forbes]
  • How Bitcoin is making waves in the luxury market [CNN]
  • How blockchain could boost the fashion industry [BoF]
  • Walmart and Google partner to challenge Amazon’s Alexa [Retail Dive]
  • Google and Vogue are bringing voice-activated content from the magazine to home devices [AdWeek]
  • Latest Magic Leap patent shows off prototype AR glasses design [Techcrunch]
  • ‘Self-driving’ lorries to be tested on UK roads [BBC]

PRODUCT
  • Everlane’s quest to make the world’s most sustainable denim [Fast Company]
  • The zipper: the innovation that changed fashion forever [Bloomberg]
  • A new high-tech fabric could mean the end of bulky layers in the winter [Quartz]
  • Watch how Vans can now put any custom design on your shoes in under 15 minutes [Fast Company]
  • How RFID tags became trendy [Engadget]
  • Leather grown using biotechnology is about to hit the catwalk [The Economist]
  • These brands are teaming up on smart hang tags [Apparel Mag]
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business

BoF moves to walled content model, intros monthly and annual subscriptions

 

BoF Professional
BoF Professional

The Business of Fashion is introducing a paywall in front of much of its content in a bid to move forward with monetisation, it announced today.

From October 25, BoF Professional, as the subscription setup has been dubbed, will be the only way to get unlimited access to its content as well as exclusive analysis, special briefings and networking events. There are both monthly and annual payment plans available.

“For almost a decade, The Business of Fashion has been a trusted source of independent, authoritative analysis on the global fashion industry, arming fashion professionals all over the world with a powerful competitive advantage in today’s turbulent times. Now, it’s time for BoF to take the next step in our journey as a business,” founder Imran Amed wrote in his post about the plans.

Students and occasional readers will continue to have access to five articles per month free of charge, as well as unlimited access to the site’s Daily Digest Newsletter, BoF Fashion Week galleries, the BoF 500 and BoF Careers.

There will also be a special discount to students who wish to upgrade to BoF Professional, as well as special group rates to companies and other organisations of 10 people or more.

BoF has been steadily moving towards more of a revenue-driven model over the past couple of years, with services including a careers site, education platform and offline events under the header BoF Voices all bringing in money to the growing company.

The team raised £1.3m in seed funding from a group of investors in 2013, including Index Ventures, LVMH, Carmen Busquets and Felix Capital. This was followed by a Series A round in 2015.

For those looking to subscribe, the team is offering a 50% early bird discount to the annual subscription of £9 per month. The monthly subscription is £18 per month.

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business data e-commerce Editor's pick social media

Bushy eyebrows and $50k per day on Facebook ads: How a small beauty brand blew up

Wunderbrow_ANCHOR

If you’re female, aged anywhere between 25 and 60, and based in the UK or perhaps the US, it’s entirely likely you may have been targeted on Facebook by an eyebrow product called Wunderbrow of late.

If not there, perhaps you’ve read an online editorial about it, spotted it on the London Underground, seen it in various print magazines, or even watched it on television. You may additionally have noticed it popping to the top of the best-seller lists in its category on Amazon.

Riding the crest of a key beauty trend for prominent eyebrows (driven largely by celebrities like Cara Delevingne and her own bushy pair) this small, relatively unknown brand has been steadily and consistently maximising paid media in a bid to drive user acquisition for just over a year.

Head over to Forbes to read the full story about how a $50,000 per day Facebook spend, coupled with savvy native advertising, has helped it grow 30-fold as a business in just over a year.

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business mobile

Digital ads: Surging sales, video, mobile and the social media effect

H&M, April 2016
H&M, April 2016

US digital ad revenues reached an all-time high of $59.6bn last year, according to a new report. That’s a 20% surge over the previous record-breaking year. And the pace is quickening: Q4 saw a 23% year-on-year rise to $17.4bn and an 18% surge over the previous quarter.

The full-year IAB Internet Advertising Revenue Report, produced in association with PwC US, also offered up some even more interesting stats when it got down to the detail of just what that advertising was all about.

  • Mobile advertising skyrocketed (66%) to $20.7bn last year, reflecting the migration of consumers to mobile devices.
  • Non-mobile digital video, a component of display-related advertising, rose 30% to $4.2bn as advertisers targeted increasingly video-focused Millennials and Generation Z consumers.
  • Social media advertising rose 55% to $10.9bn as advertisers convinced themselves that social networks were the place to be.
  • Non-mobile search revenues rose a slower 8% to $20.5bn.
  • Retail advertisers continue to represent the largest category of internet ad spending, responsible for 22%.

“Internet advertising was a disruptive innovation when the industry was formed,” said PwC’s David Silverman. “Twenty years later we still see double-digit growth rates. Three key disruptive trends, mobile, social, and programmatic, continue to fuel this exceptional rate of growth.”

“There’s no question that interactive screens are attracting consumers and the advertisers that want to reach them where they live, increasingly on mobile devices,” added IAB’s Sherrill Mane.

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday

Categories
business e-commerce Editor's pick social media

Digging in to Reddit: does it work for fashion brands and retailers?

reddit

Late last week, Intel’s Sandra Lopez teamed up with Rebecca Minkoff for a conversation on social news site Reddit. The “AMA” (Ask Me Anything) encouraged users to pose questions about the roles of fashion and technology intertwining, as well as the opportunities for millennial women in STEM fields.

It was a strong example of something that worked on the platform – native to how its users operate, and filled with personal responses (from how Lopez and Minkoff got started in their careers, to how they managed their work/life balance, and why men never get asked that question).

Self-proclaimed as ‘the frontpage of the internet’, Reddit has a reported 202 million unique visitors a month. During 2015, it saw 82.54 billion page views across 88,700 active subreddits (sub forums). There were 73.15 million submissions, with 725.85 million comments made by 8.7 million total authors.

Risky business

The Intel/Minkoff example is one of many AMAs, but it’s still one of few of fashion brands and retailers really getting involved.

The uncensored and unpredictable nature of the site goes some way to explaining why. The platform was designed to be a space where like-minded individuals communicate without interference. Reddit is open source and moderated by unpaid volunteers. Users, known as “redditors”, create threads called subreddits, which other members with similar interests can join.

Initially the company had just five rules: “Don’t spam; Don’t ask for votes or engage in vote manipulation; Don’t post personal information; No child pornography or sexually suggestive content featuring minors; Don’t break the site or do anything that interferes with normal use of the site.” The lack of rules and regulations, fostered an “anything goes” culture that still defines Reddit today.

For a brand, therefore, entering a community like Reddit can be risky.

RedditAMA_Intel_RebeccaMinkoff

Frequent changes of senior management has done little to improve Reddit’s volatile reputation. Three different leaders have been in place over the past three years: Yishan Wong, Ellen Pao and Steve Huffman respectively, all with very different objectives. Pao’s 2014 strategy to clean up the darker side of Reddit and remove the less savoury elements for instance – like banning subreddits “fatpeoplehate” and “hamplanethatred”, which focused on shaming overweight people – angered core members who felt Poa’s intentions went against the free-speech ethos of Reddit.

But needless to say, this did make it more appealing on the brand side. Around the same time, Nordstrom created Nordstrom1901, the official Nordstrom subbreddit, to communicate with customers after noticing increased activity surrounding the brand on the platform. Nordstrom’s first post encapsulated the relaxed, genuine attitude Reddit users appreciate. “We are Redditors at heart and can’t wait to get to know the communities better. We’re here to help so questions, comments, etc. are all welcome,” it read.

Focusing on service and avoiding aggressive marketing, Nordstrom received a warm Reddit welcome. AMAs proved particularly popular. Real-time feedback also allowed Nordstrom to navigate any minor issues before they escalated into larger problems. Their venture onto Reddit appeared fruitful, so it’s unclear why Nordstrom1901 has been abandoned (the last official Nordstrom1901 post was 11 months ago). Often such moves come down to the advocate for a specific platform no longer being in the business, but it’s also likely a change of strategy was at play; if ROI wasn’t proving fruitful from the platform, resources could easily have been allocated elsewhere.

Ensuring authenticity

One brand that has converted conversation into revenue through Reddit is Uniqlo. Speaking to Marketing Land, Uniqlo’s e-commerce manager, Arielle Dyda (who manages the retailer’s Reddit involvement), explained that it now drives more traffic and revenue for the retailer than any other social channel.

Its efforts started on the platform in 2012 after traffic from Reddit crashed the soft launch of its e-commerce site. Today, 5% of its referral traffic comes from social media, with 64% of that from Reddit. Of the 3% of monthly sales from social media, 64% is also from Reddit. On a day when Dyda posts about a special deal, it can drive up to 20% of their online sales.

One particular subreddit – r/MaleFashionAdvice – is particularly fruitful, and Uniqlo isn’t even the most mentioned brand on there:

Reddit_malefashionadvice

The key to Uniqlo success surrounds authenticity, transparency and excellent customer service, says Dyda. She focuses on being real, but also on being playful. It helps that she uses her personal Reddit account, midnight1214, tagged as an official company representative.

“So just being able to be a genuine person is important. I joke around with them, I post memes. I’m savvy with the Reddit lingo and that makes me one of them. I’m not just Uniqlo, I’m midnight1214, and I understand the jokes and I understand frustrations, but I’m going to be here to help you when you need it,” she explains. She also leans on the community’s moderators for help so as not to seem too promotional at times.

Spending time getting to know the platform, answering questions and contributing, without imposing corporate strategies or marketing campaigns, distinguished Uniqlo from other companies entering Reddit. Dyda adds: “I think if another band wants to jump in, they really have to take the time and learn and understand first of all what are people saying about your company [on there].”

By comparison, US-based, outdoor apparel company REI, conducted insufficient research when they attempted to join the platform. Misjudging the importance of authenticity, CEO Jerry Stritzke started the conversation by highlighting REI’s decision to close on Black Friday. Seemingly unaware of the distain of brands using the site for advertising and marketing, he wrote: “Hi Reddit. I’m Jerry Strizke, CEO of REI. You might have heard about us recently when we announced that we would be closing all of our stores on Black Friday this year. We’re paying our 12,000 employees to take the day off and we’re encouraging them to opt out of the Black Friday madness and spend the day outdoors with loved ones…Ask me anything!”

His comments were interpreted as a publicity drive, prompting a dramatic backlash of negativity. Redditor phD_in_Random said: “I’ve never even heard of this company and I hate it already. We don’t have one in my city and I hope we never do.”

Strizke also missed a number of contentious questions from current and former employees surrounding a membership sales scheme the company runs. Strizke failed to grasp that leaving the discussion early, didn’t mean the conversation was over, but rather gave the impression he was avoiding tougher issues. One comment in particular got so blown up (there were some 5,000 responses on the AMA in total), that he had to return to Reddit later to address it.

Unsurprisingly, there’s been no further activity on Reddit from REI.

Native advertising

Steve Huffman, one of the original founders of Reddit, returned as CEO in July 2015, shifting the focus from imposing a level of moral decency to expansion. He is in charge of the business side of Reddit, while co-founder Alexis Ohanian concentrates on editorial aspects like Upvoted, Reddit’s new publication.

Here, a small team of editors sifts through the most interesting posts, rewriting stories worthy of further development. It aims to put a spotlight on all the hundreds of conversations that otherwise get lost in the noise of the platform. It also proves an opportunity for Reddit itself to monetise, by offering brands a safer way to enter through its native advertising scheme.

Sponsored posts are likewise written by the editorial team, and designed to fit with the nature of the content rather than through traditional advertising banners. In the interest of transparency, Reddit made its intentions clear from the off: “We will be working with brands on sponsored content, all of which will be visibly distinguished as such.”

Going forward, the introduction of Upvoted reflects the positive changes at Reddit. There’s a deeper understanding that if the site is to reach its full potential, management must act responsibly. Initiatives like providing a help section with advice on “Brandiquette”, for brands thinking of advertising, makes the site much more approachable.

Brands in other industries including food, literature and music have accordingly reported positive results (case studies available). With that in mind, fashion brands and retailers will also look to consider Reddit as a suitable advertising partner in the future.

Needless to say, for any brand thinking about stepping into the Reddit world in the meantime, operating within the context of the site is paramount. With such a large audience available to tap into, and proven revenue drivers at play when handled correctly, the opportunity is almost too good not to.

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business e-commerce technology

Under Armour’s power performance: Athleisure & connected fitness

underarmour1

How important is ‘athleisure’ as a trend that’s impacting sales figures for sportswear companies? Well, sports brands never really own up to that. But the sales growth some of the big names are seeing suggests that it’s a real sales driver. Just look at Under Armour’s latest results.

The company released its Q4 figures this week, turning in an eye-popping 31% revenue rise to $1.17bn. Wow. You don’t get that from just selling to committed sports and fitness fanatics.

Under Armour is one of those companies that has really been benefitting from the athleisure trend and while yesterday’s upbeat news wasn’t all about sportswear as a lifestyle choice (rather than a sports one), the lifestyle factor obviously did loom large. Interestingly, lifestyle is giving a major boost to sports clothing sales. Where once upon a time all the sexy news was about footwear, now apparel is enjoying its time in the spotlight.

Apparel sales for Under Armour rose a massive 22.2% and at $864.8m in the three months to December 31 they obviously make up the biggest chunk of the firm’s revenue, driven by demand for training, running, golf and basketball duds. Obviously, you don’t see 20%-plus growth in each quarter for 25 consecutive quarters by just supplying clothes for active sports. That means a lot of people bought those training, running, golf and basketball pieces for working in, for relaxing, posing and partying in… as well as for getting fit.

womenshoe_UA

Footwear had a good quarter too though, with sales almost doubling to $166.9m as new running shoes and the signature Stephen Curry basketball line proved hugely popular. Again, you only have to look around any group of friends at work or off-duty to see how even the most high-performance shoes have transitioned from the track and court to the bar and office.

And accessories sales soared as well, rising 23% to $97.1m, driven primarily by new bags. Meanwhile online sales grew 25% in Q4 and now make up 36% of total Under Armour revenue, and international net revenues rose 70% (or 85% currency-neutral) to make up 12% of the total. That all helped net profit to rise 20.4% to $105.6m, or 48 cents per share.

Any negatives?

Can this impressive performance continue? Well, the firm expects revenue growth of 25% this year so, yes. That prediction obviously countered any worries investors may have had that the athleisure trend fuelling such explosive growth might end any time soon.

Some analysts and investors were concerned about reports that Under Armour is losing womenswear market share – a particularly disconcerting thought given that women are helping to drive the athleisure trend. The Wall Street Journal quoted data from SportScanInfo saying the company saw a 7.7% drop in womenswear sales in December (compared to a 6.6% rise for Nike). But Under Armour has countered this saying the data captured only represents 40% of its business (it doesn’t include wholesale or online sales, for instance).

Yet there are still some downsides in Under Armour’s performance. The company’s margin slipped in Q4 as it boosted inventory levels to ensure it could meet demand and keep shelves stocked. The negative aspect of this high inventory level is unsold product that ends up being marked down.

underarmour2

And lower margins make analysts nervous, especially when they’re already worried that a fashion trend (athleisure) fuelling massive sales growth could flip suddenly and become yesterday’s fashion news.

But is athleisure really a fashion trend any more or has it evolved into a true lifestyle phenomenon that’s a reflection of society’s increasing move away from formal clothing? I’m inclined to think the latter. In many ways it’s the logical conclusion of a trend that started over 50 years ago and I don’t think it’s going to go away, even when the fashion pendulum swings in another direction.

Future focus

So, assuming that athleisure is here to stay and that the firm’s power growth can continue (for a while at least), what will Under Armour be offering this year to make it happen?

CEO Kevin Plank said the firm will deliver new iterations of signature product across premium price points and distribution throughout this year. It’s doubling its “elevated running” offerings priced above $100 including the launch of its first smart shoe, SpeedForm Gemini 2 RE, and SpeedForm Slingshot, made with a 3D knitting process.

In apparel, it will debut two new HeatGear apparel cooling technologies, Microthread and CoolSwitch, while also launching a proprietary ColdGear insulation story called Reactor.

OK, a lot of people are going to buy into that sport-focused tech for nothing more vigorous than the walk to the bus stop. But the company is also going to offer plenty for the true fitness-focused community, not only with clothes and shoes, but via major developments in Connected Fitness.

Earlier this month at the Consumer Electronics Show, it unveiled the new UA Record, the digital dashboard app for health & fitness, and a suite of new products led by Under Armour HealthBox, which it described as “the world’s first complete Connected Fitness system.”

And while all that can help consumers monitor their fitness, importantly, it can help Under Armour monitor its consumers too! That’s not as creepy as it sounds; the company isn’t watching us. But CEO Kevin Plank did say it could achieve a “more complete picture of [its] consumer”. He added: “We are establishing our data-driven math house that will provide us with real-time information to make better decisions and build even better products. More importantly, it will provide deeper insights, recommendations, and personalised content.”

So there you have it – something for everyone no matter how fitness-focused you are. As for me, I think I’ll stick to the hoodie and leggings for lounging around and watching TV…

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday

Categories
e-commerce

Christmas shopping set for four-day take-off in the UK

christmasshopping

Britons are going to go on a spending binge in the next four days that will blow the Black Friday long weekend’s spending out of the water. And online will benefit as well as physical stores, despite the delivery drawbridge getting precariously close to being pulled up.

Who says so? The analysts at MasterCard SpendingPulse who are measuring both card and cash sales and who think the festive shopping season is finally set for take-off.

They’re predicting a four-day spend starting Saturday (December 19) that will hit £5.9bn. That easily beats the Black Friday long weekend’s £5.74bn. And while those amounts may not look massively different from each when written in billions, in numbers it’s actually £160,000,000.

MasterCard’s Mark Barnett said: “The shift to shopping online is undeniable, but high streets and shopping malls still dominate with four out of five pounds spent offline. Last year, consumers left their shopping late, and we are expecting many to do the same this year. As we get closer to Christmas grocery shopping starts to dominate sales, but gifts of clothing and electronics can expect to see strong growth also.”

He also said that even with the short delivery window for online shopping, e-commerce growth on last year will still be an impressive 24% over the four days.

Apparently that’s a reflection of the fact that shoppers have a lot of confidence in retailers’ ability to deliver on time… Hmmm, good luck with that!

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday. Image via Vintag.es.

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Blocks business e-commerce Editor's pick

Does digital finally have a seat at the table?

Fashion and luxury goods companies are hiring chief digital officers in a bid to integrate digital thinking into core business strategy.

digital_exectable

“A revolution needs leaders,” says Luca Solca, managing director of luxury goods at Exane BNP Paribas, on the digital transformation reshaping fashion and the recent introduction of chief digital officers (CDOs) at some of the largest fashion and luxury companies.

In one of the biggest moves, this summer, LVMH appointed Ian Rogers, Apple’s former senior director of iTunes, to the newly created position of CDO, giving digital a seat at the top table at the world’s largest luxury conglomerate for the first time. “I am happy to welcome Ian into our group to strengthen our digital ecosystem. He will build on the foundations laid by Thomas Romieu, take the houses to the next level and explore new opportunities for the group in the digital sphere. Ian will bring his extensive experience in high-end digital ventures and his innovation-driven spirit to develop LVMH leadership in the digital luxury field,” said Bernard Arnault, chairman and chief executive of LVMH, in a statement at the time of the appointment. (Thomas Romieu is the company’s group digital director, who will remain at the company.)

“This is a signal LVMH has embraced digital for real; [that it] will be more and more integrated in its business,” says Solca. “A very senior role is required to lead the way, promote cooperation and remove roadblocks.”

Rogers is not alone. Senior digital appointments are on the rise across the fashion industry, with chief digital officers now in place at companies ranging from Westfield, one of the world’s largest owners of indoor malls and an early adoptor of the CDO role, to Kering’s luxury fashion house Saint Laurent.

Whereas once digital was relegated to the e-commerce team and a subsection of the marketing team, these moves reflect a newfound need to integrate digital into core business strategy. “There was some digital before, but the difference between now and then is that it was a subset of what people did under marketing and now it’s a department of its own and reports directly to the CEO,” explains Kevin McKenzie, CDO at Westfield. “The company recognised that the consumer was changing in the way that they purchased and the influence that they have from digital, and they thought it would be a good idea to hire someone to help educate them on digital trends, to articulate some thoughts and ideas on what that could mean for the business, and ultimately to develop a strategy for products and services.”

“Previously, the attitude was that we can continue doing great without digital, but that is finally starting to change,” says Perrine Corvaisier, CDO at Maison Ullens, a small Paris-based luxury brand established in 2010 and focused largely on leather and cashmere pieces.

For years, many luxury brands believed they could afford to move slowly on digital, because growth could be found elsewhere, notably in China. “As Patrizio Bertelli [chief executive of Prada] once told me: ‘It’s not that I am skeptical about digital, it’s just that I have many more important things to do,’” recounts Solca. But a slowing China has changed the equation. “[E-commerce] is one of very few ways luxury goods companies can now grow,” Solca continues.

Now, many brands are racing to catch-up with a luxury consumer that is more digitally active than the general population. “Digital is now the engine of the luxury shopping experience,” according to a report published in July 2015 by the Altagamma-McKinsey Digital Luxury Experience Observatory.

While e-commerce made up just 5 percent of the global personal luxury goods market in 2014, it is expected to reach 9 percent by 2019, with a total value of $27 billion, says Mario Ortelli, senior luxury analyst at Sanford C. Berstein. What’s more, online now influences over 60 percent of luxury purchases, making a robust digital strategy indispensible, Ortelli adds.

Indeed, a report by Solca entitled “Digital Frontier: The New Luxury World of 2020,” predicts that digital will become essential to more than e-commerce and marketing, impacting all stages of the value chain. “The development of digital capabilities will be a necessary condition for survival,” says the report.

While the ultimate task of the CDO is evolving his or her organisation towards this deeper and more holistic view of digital, there are often several near-term hurdles to overcome first, including how to define the role, says Ashley Friedlein, president of Centaur Marketing and founder of Econsultancy.

Friedlein points to two different types of CDOs. “Ambassadorial CDOs” are often put into place as an early bid to signal to shareholders that a company is serious about the digital opportunity. But they often have no real operational impact and work in posts that rarely come with a P&L attached, he explains. “The challenge for these people is that if the role is more about a statement of intent, or if it’s just about education or inspiration and they can’t fundamentally change the business, they leave,” says Friedlein.

What Friedlein called “transformative CDOs,” on the other hand, typically have a strong grasp of both marketing and technology (often sitting above or replacing the chief marketing officer or chief information officer) and usually come with an operational background. They frequently control product and pricing, and sometimes customer service and sales as well, and they know how to engender change, he adds. In September 2015, McKinsey published a paper with a headline suggesting that effective CDOs must be “transformers in chief.”

But making change is easier said than done. “You need to be a good internal consultant and a good internal sales person, and at the same time you need to be very analytical,” explains Corvaisier. At Maison Ullens, her objective has been to place digital at the heart of everything the business does. “I’m thinking about digital from the outside in, and the other way round. It’s a very broad role in terms of scope; it touches every part of the company.” Previously, she ran a similar, though much larger, team at Hermès as global digital director for e-business and communication.

Meanwhile, Francesco Bottigliero, chief digital and information officer at luxury Italian fashion brand Brunello Cucinelli, has a role that straddles digital marketing and traditional information technology. Part of his focus is smoothing internal integration. “Typically in our industry, IT is completely kept away from any digital project or decision; digital is more closely aligned with marketing and then there’s cultural clash when they need to work together. So we decided to merge the two,” he explains. But, ultimately, he wants digital thinking to permeate the entire organisation. “It will get into our manufacturing process, replenishment, design and more. We will move from traditional IT legacy systems into digital applications across the company.”

While LVMH declined to discuss the specifics of Rogers’ new role, Ortelli says that, at a high level, his primary objectives will be to help the company’s senior management become more digitally savvy and to share best practices in digital across the group’s brands. “He’ll look to develop synergies and align the brands, and he’ll be there to act as an advisor on digital propositions put forward,” says Ortelli.

For all CDOs, integrating customer relationship management (CRM) systems is one critical area of opportunity. “CRM is the real future opportunity. Anything that helps brands improve this is something they will try to embrace,” says Ortelli. But many smaller luxury companies, lacking their own direct-to-consumer e-commerce channels, don’t have control over their customers’ online data, explains Lindsay Nuttall, CDO at advertising agency BBH, which has worked with brands like Burberry. Much of the initial work to be done as a CDO, therefore, surrounds reclaiming data, she says. “The fact they’ve given part of their supply chain away to third parties like Net-a-Porter could prove an increasing problem over time. It can affect really practical things, like their margins, and really huge things like their route to the customer. By not collecting data on them, you don’t understand how they’re evolving.”

Another issue, she adds, is not being able to connect the dots and identify individual consumers across touch points. “If I’ve spent £5,000 in a Bond Street store, [the brand] doesn’t know that I’ve also walked into the store in New York before that. And they definitely don’t know I’m shopping and spending online the other 90 percent of the time.”

To help address this, Westfield has just hired a chief data and analytics officer, Raqhav Lal, who will work alongside McKenzie and the company’s chief information technology officer, Denise Taylor. “Data is such a core part of digital that it made sense to add that pillar to our organisation, strategy and thinking. We hired a chief data officer to educate us, but also to create applications for how to use this data to better operate our business and create better experiences for the customer and the retailer,” McKenzie explains.

If it is successful, the role of the CDO is, almost by definition, an interim one. According to Corvaisier, who is about to leave her position at Maison Ullens to launch her own digital consultancy, CDOs should aim to make themselves redundant and exit the stage once digital has been adequately embedded throughout a business. “The role is to excite and show the way with digital; to set up a few guidelines and some technical points, so that the organisation can change and continue to lead on its own.”

Indeed, at digitally mature companies, digital strategy is fully integrated into overall business strategy, negating the need for a specific chief of digital. “As in the case of Burberry, the alternative is to have the CDO and the CEO roles coincide,” says Solca.

“In the 1920s businesses had chief electricity officers because it was such a new thing,” adds Friedlein. “This feels like that; a moment in time that will pass.”

This story first appeared on The Business of Fashion.

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Digital snippets: Fabergé, Dior, Gucci, Marc by Marc Jacobs, H&M, J.Crew and Kate Spade

A round-up of the latest stories to know about surrounding all things fashion and tech:

 

  • Fabergé’s NYC Easter egg hunt marks the largest Beacon deployment ever in the US [Fashionista]
  • Dior explores global flower sourcing with interactive map [Luxury Daily]
  • James Franco directs video for Gucci (as above) [WWD]
  • Marc by Marc Jacobs line crowdsources models with #castmemarc campaign on social [Vogue.co.uk]
  • YouTube fashion viral: Miranda Kerr is selfie obsessed in H&M’s spring 2014 campaign [Fashionotes]
  • J.Crew and Kate Spade to foster the next big fashion tech start-ups through new accelerator program [Co.Design]
  • IMG Fashion’s partnership with Tencent aims to boost Fashion Week China exposure  [JingDaily] bit.ly/1ltgJFZ
  • Fashion in the age of Instagram [NY Times]
  • How iBeacon and similar technology will change retail [eMarketer]
  • Five examples of how marketers are using iBeacons [Econsultancy]
  • ‘Showrooming’ hits luxury fashion – lack of e-commerce presence means clients buying elsewhere online [WSJ]
  • Luxury brands are stupid to snub the internet [BusinessWeek]
  • Decoded Fashion founder: ‘Designers need to launch like start-ups’ [The Guardian]
  • New app, Think Dirty, tracks the nasty chemicals in the beauty products you put on your face [Co.Exist]
  • The camera-wielding boyfriends behind fashion’s most famous bloggers [Fashionista]
  • How LiketoKnow.it is changing Instagram by monetising your photos [Pinetop Group]
  • Op-ed: The companies with the best software will lead fashion [BoF]