Case 1. New Business Models Enabled by Digital Technologies

A perspective from the fashion sector

 

1. About

Over the last decade, digital technology advancements and innovative ways of using new web resources and platforms have paved the way for a renaissance in consumers’ online shopping experience, particularly in the fashion sector – a sector where the customer shopping experience usually goes beyond mere browsing.

Challenging the sceptical view that consumers would not buy apparels and accessories without feeling the fabric and testing for size and look, online fashion sales is growing fast. Traditional brick-and-mortar fashion retailers as well as new start-up companies are seizing the digital opportunity by bringing about innovative business models set to improve the customer shopping experience in virtual environments.

In order to improve the customer online shopping experience recent business models in electronic fashion retailing are making use of customer relationship management (CRM) practices and capitalising on the social power of the internet. The business models drawing functionalities from these domains, i.e. CRM practices and the social web, are the main focus of this blog space. More specifically, this space provides a portfolio of new business models examples in the fashion retail sector that are using digital technologies to implement the following functionalities:

1. Personal subscription, these models use detailed subscription information to offer selected products matching customers’ styles, sizes and preferences;

2. Mass customisation, these models allow customers to personalise the products they are buying according to their choice of style, colour, materials and measurements;

3. Social merchandising, these models use customer feedback and reviews to promote products and engage customers; and

4. Collaborative consumption, these models use peer-to-peer platforms on the web to create a marketplace for product swapping, sharing, trading and renting.

2. Business Models

In this area we point out some examples of how fashion retailers are combining some of the current technologies and platforms in order to implement web-enabled business models around concepts such as personal subscription, mass customisation, social merchandising and collaborative consumption.

 3. Technologies and Platforms

The evolution of digital technologies and the pervasive nature of the internet have transformed significantly the way consumers shop. By accessing information and purchasing facilities available on the web, consumers are now able to shop online anywhere and at any time. Currently, online shopping represents a key sales channel for many retailers in general, adding substantial capabilities to organisations that not long ago where operating only with conventional sales channels.

Many companies in the fashion sector are recognising the need to embark into the digital economy world, where global consumers can communicate, share information and shop with the help of technological resources available on the internet. These technological resources are paving the way for a relentless focus on digital innovations in the sector.

In this section, we identify some of the enabling technologies and web platforms that are supporting the development of new business models in the fashion retail sector. From the particular perspective of the study, enabling technologies and platforms are the ones which provide resources and functionalities to allow initiatives based on CRM (Customer Relationship Management) practices such as the capture of customer personalised information, preferences and opinions, as well as provision of peer-to-peer platforms supporting social web integration such as facebook and twitter.

 

3.1 3D-Printing

 

3D-Printing is a process that makes three dimensional solid objects from a digital model designed with the help of animation modelling software and Computer Aided Design (CAD) applications. The digital model is literally printed on a materials printer, which prints successive layers of a specific material until the physical 3D object takes its full shape.

See how it works:

3D-Printing technology is paving the way for new business models in different sectors of the economy such us civil engineering, industrial design, health, manufacturing, etc. and the fashion sector is no exception. Companies such asShapeways and Continuum Fashion are developing new business models based on 3D printing services where customers can design and print to order fashion items such as jewelleries, accessories, footwear and bikinis.

See the N12 bikini 3D printed by Continuum Fashion and Shapeways:

For more information please refer to the following presentation and report (both prepared by Doctor Luciano Batista)