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How can retailers be more entrepreneurial?

Entrepreneurial online

A spirit of innovation can help retailers to survive in tough markets, so learn from the brands that are putting it at their core

When times get tough, the temptation for fashion retailers to batten down the hatches and concentrate on the day-to-day grind of running a business in a challenging economy is strong. But, at the same time, the ability to innovate, take risks and encourage an entrepreneurial mindset is what separates the very best in the business from the rest.

Fashion is, after all, an industry built on entrepreneurs with a clear creative vision. Only those who can offer customers something new and different – whether they are competing on product, price or service – will weather difficult trading conditions unscathed. Drapers speaks to retailers and brands that are making innovation and entrepreneurship a central pillar of their strategies to see what lessons can be learned.

The Amazon effect

For many across the retail industry, etailer Amazon has become a watchword for doing things differently. The US giant has already revolutionised fulfilment and delivery, is pioneering voice technology through its digital assistant, Alexa, and is experimenting with cashless concept stores that use artificial intelligence to record what shoppers buy.

Alexa Echo Look

Alexa Echo Look

Despite its size – quarterly profits broke the $2bn mark for the first time in the three months to 30 June, and the etailer now employs more than 500,000 people worldwide – Amazon has hung on to a start-up mentality of experimentation.

Speaking in London at last month’s Wired Smarter conference, Amazon chief technology officer Werner Vogels stressed the etailer’s commitment to innovation: “At Amazon, we are strong believers that if we stop innovating, we’ll be out of business in the next 10 to 15 years. You have to align yourselves with your customers, instead of your shareholders, if you really want to build a successful business.”

If things fail, they can still be successful if the lessons learnt drive the next generation of ideas

Werner Vogels, Amazon

Vogels warned that business leaders must make bold decisions and move quickly if they are to remain entrepreneurial: “At Amazon, we continuously experiment. Remember, something is not an experiment if you already know the outcome. You have to have a high level of risk associated [with the experiment] and uncertainty about whether it will be successful or not.

“The learning part is the most important bit of any experiment. If things fail, they can still be successful if the lessons learnt drive the next generation of ideas.”

Vogels also urged businesses to move quickly and build an internal culture where failure is recognised as much as successes: “It is important to move fast. If you have to wait for loads and loads of information before you start your experiment, then you are probably too late.

“There are very few decisions that are not reversible. You might as well start with 70% or 80% of the information, instead of waiting for everything to be perfect.

“If failing costs you in your career, then you won’t try something entrepreneurial again. But if being involved in something that was new, but failed, is a badge of honour and improves your standing in your organisation, then you will try again.”

You can’t suddenly decide that your business is going to be about innovation

Toby Darbyshire, Heist

Zeit Heist

Lingerie label Heist is another business putting entrepreneurship and innovation at the centre of its operations. The brand, which claims to have created the “perfect” pair of tights by using a seamless waistband and 3D knitting, received investment from Imaginary Ventures – the venture capital firm started by Net-a-Porter co-founder Dame Natalie Massenet – earlier this year.

Heist tights

Heist

“You can’t suddenly decide that your business is going to be about innovation,” chief executive Toby Darbyshire tells Drapers. “There isn’t a shortcut and it doesn’t happen overnight. From an organisational point of view, we have made our innovation team the engine of our business. We start with a problem – like uncomfortable tights – before using science to solve that problem.”

Vogels agrees: “You can’t just wake up in the morning and say we’re going to be an innovative company. If you’ve been hiring people to be conservative for a number of years, then you cannot blame those people for not being entrepreneurial. You have to hire for it, and you have to decide what kind of innovation you want to pursue. We want to be earth’s most customer-centric company and that drives the direction in which we innovate.”

Growing pains

Maintaining an entrepreneurial mindset can be easier for nimble start-ups with small teams, but becomes more difficult as businesses grow.

“It is intrinsically hard to keep an entrepreneurial spirit [in a business] as you scale,” Darbyshire adds. “True entrepreneurs are happy to take a risk and work for a business in the very early days, when you might not have the nice office and all the perks.

“We spend a lot of time culturally encouraging our team to really push themselves. A good example is that usually it can be anything from 18 to 24 months to bring a completely new product on to the market. We gave our product team six months. You’ve got to question things, throw out the traditional, accepted way of thinking and try to make that a cultural attitude.”

We need to find innovations – disruptive innovations – that will really change the way that we are doing things

Marie-Claire Daveu, Kering

An entrepreneurial mindset and a focus on innovation is also necessary to solve some of the key challenges facing the fashion industry. Large businesses need fresh thinking and new ideas.

High-end etailer Farfetch, for example, launched tech accelerator Dream Assembly this spring in a bid to go back its “founder-driven, entrepreneur-led” culture. Similarly, luxury brand house Kering has partnered with retailers C&A and Galeries Lafayette Group on start-up accelerator Plug and Play, which supports businesses in the world of sustainable fashion.

farfetch os store of the future

Farfetch is innovating with tech

Innovation is key when it comes to helping the fashion industry become more sustainable, Kering’s chief sustainability officer, Marie-Claire Daveu, tells Drapers: “Our sustainability goals are linked to innovation, which for us is key to the future. If we put at scale today all our pilot projects, we know we would only reduce our footprint by 20%. So, if we want to fill the gap between that 20% and our target of 40%, we need to find innovations – disruptive innovations – that will really change the way that we are doing things.” 

Being entrepreneurial in challenging times is not easy. But it is now, more than ever, that the fashion industry needs to delight and entertain customers with new ideas and innovation. Established retailers looking to drive innovation need to create a culture that celebrates trying something different – even if it does not work. Hiring individuals with an entrepreneurial mindset and a drive to create change are also key.

 

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