Not typically considered an industry of futurists, fashion’s leading companies have often lagged behind in the tech race. Now – and not a moment too soon – Prada is the second of traditional luxury retailers to sponsor an accelerator program, an initiative run in collaboration with Startupbootcamp Milan. As in-house incubation programs continue to grow, this could spark a bigger rush towards innovation in fashion— a move that could drive real change across the industry as they (finally) become leaders with technology.
Of the legacy houses still around today, it’s often these heritage brands that have been the slowest to adopt the benefits of technology. Prada, along with a handful of others including Chanel, lagged years behind some of their counterparts to join online retail, sticking with the idea that their consumers want a classic, intimate way of shopping for their product. It’s not that they were wrong in addressing these experiential marketing demands, but perhaps they didn’t see the limitless possibilities of enhancing these aspects through tech, and the added benefits that accompany it.
One of the groups that’s been quick to the mark is LVMH, who launched their own accelerator in 2018 that would see 50 new startups a year run through their program. Located at the current startup hotspot in Paris at Station F, this innovation program offers a unique, “multi-sector approach, encompassing entrepreneurs whose innovations are relevant to LVMH’s different business groups: Wines & Spirits, Fashion & Leather Goods, Perfumes & Cosmetics, Watches & Jewelry and Selective Retailing.”
On top of taking an outside approach to spurring innovation, LVMH also runs DARE LVMH, an initiative to develop intra-preneurship, encouraging the best current employees to take risks and pursue projects seen as beneficial to the conglomerate. This is one of the most well-rounded approaches to a global luxury brand seen yet, and is likely to influence many other brands to finance programs of similar value, if not scale.
What will be interesting to see over the next five years is what effect these types of innovation programs will have on the competition between legacy brands and tech-first companies. Will they be on the same page, or will Prada and LVMH be lightyears ahead given the combination of their heritage title and growing tech channels?
As far as tech-first brands go, the YNAP group (Yoox x Net-a-Porter) still owns the largest market share of online luxury sales, proof that ignoring the advantages of technology will likely lead to long term losses. Last year, the brand added to their online advantage by investing nearly USD$560 million into “technology, warehouses and delivery systems”. Of the technological developments, they are heavily focused on mobile-first solutions after having had great success with purchases through programs like WhatsApp, and owing to the fact that 40% of their purchases are made through smartphones. They are also looking into AI to help with client personalization and augmented reality to allow for easy try-ons of accessories.
This new model of innovation being driven by the top companies is telling of big shifts occurring right now in the industry. The choice to create and collaborate on in-house accelerator initiatives focusing on fashion-tech demonstrates a realization that the best way forward is to be the first to discover and effectively implement tech-based solutions. Tech has the ability to help brands adapt quickly to changing markets and tastes, it can solve issues of social interest including sustainability and human rights, and it can create new avenues for ROI and growth. With Prada’s latest move, it’s only a matter of time before the rest of the industry follows suit.