The B2B Opportunity
The fashion industry has been notorious for hesitating to embrace and apply technology. While mindsets are shifting quickly within fashion and retail C-suites, their capabilities will not. This presents a rich opportunity for B2B start-ups in the fashion space who focus on meeting one or more of those three pillars.
Building a large or loyal customer base and a strong brand often takes more time and investment than Angels or VCs typically can support. Like trends, B2C fashion players come and go every season - hardly comforting to a would-be investor.
In contrast, B2B players typically fly under the radar in the fashion industry and attract less competition. They face different challenges - they need to be equipped to survive longer sales cycles and to build connections to the decision makers of their target clients.
C-Suite fashion executives who feel growing pressure to keep their operations trim will be searching for contract solutions that are force multipliers for leaner staffs. Those solutions will increasingly come from start-ups with expertise in areas like data science and machine learning.
With the help of those start-ups, the efficiencies companies build today will lay the foundation for an iterative culture and flexible capabilities needed to compete over the long haul. Gone are the days where one competes with similar specs, product mix, and revenue. In fact, given some of the more recent acquisitions (e.g., Walmart of Bonobos, Hudson’s Bay of Gilt) it seems increasingly difficult to tell exactly who your competition is day to day. Technology is key to agility and agility is the key to surviving competition.
Stitching Together A Fragmented Ecosystem
Wherever you look across the value chain, from sourcing raw materials, to design and manufacturing, to discovery, point of sale and distribution, a different company is rewriting the way things are done for their particular corner of the ecosystem.
Mature industries never get the opportunity to reorganize from scratch, but this may be fashion’s best chance. Fashion’s digital renaissance, as it may come to be known, is being built before our eyes, and we have a unique opportunity to re-engineer how all its components fit together in a way that avoids future painful retrofitting (saving us all time, energy, brainpower, and money).
Investors must understand how the three pillars: data, supply chain, and future commerce intersect and support one another to identify the firms that will be there when it’s all rebuilt.
Don’t be Fashionably Late
Investors in the fashion space can be forgiven for feeling overwhelmed by the confluence of disruptive forces at work in the industry today: AR/VR/AI, 3D printing, wearables, outsourcing, insourcing, ethical sourcing, accelerating trend turnover, fit solutions, visual search, customization, personalization, contextual commerce, sustainability, fast fashion, and of course, data data data.
While almost everything about fashion is changing, like a savvy shopper, investors need to distinguish the fads from what’s here to stay.
Don’t wait until the winners take all.
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