Entrepreneurialism is about tackling fundamental problems and trends that the world faces today, says billion dollar investor and leading internet entrepreneur, Kevin Ryan, on the latest episode of the Innovators podcast.
Ryan has founded and sold several billion dollar businesses, including Gilt Groupe, Business Insider and MongoDB. He credits his success with taking a problem-centric approach, directing his attention next to crystal meth, autism and maternal health with his new ventures. He advises entrepreneurs and business leaders to do the same – focusing on long-term trends, great products and consumer needs, as opposed to short-term pressures, something he believes traditional retailers have failed to address.
“Creative destruction is an important part of our economy. And it’s working,” he explains. “If you’re in football, and you’re down two touchdowns, you’re gonna have to throw the ball. You may not win, but it’s the right move to start throwing the ball. And Macy’s didn’t throw the ball. And so I think they really deserve where they are.”
Moreover, during a time when we’re surrounded by stories of retail’s struggle to adapt – it’s easy to feel despondent. But as long as you focus on creating a great product, you will win in the long term, he notes.
“The number one priority is don’t run out of cash. […] The reason that traditional retailers don’t win is their products are not very good. And so that’s what they didn’t focus on – the basics. Batten down the hatches, get through a difficult year, because next year, we’ll be back.”
During this conversation, Ryan explains why, in light of the global pandemic, creative destruction is an important part of our economy, how businesses can survive by focusing on building better products, and despite feeling like life is contracting, we’ll actually end up with more choice.
“[The fashion industry] is 60% larger than it needs to be relative to the actual quantity of demand,” says Paul Dillinger, Head of Global Product Innovation at Levi’s, on the latest episode of the Innovators podcast by the Current Global.
He is referring to the fact six out of 10 garments produced every year are being discarded to landfill or incinerated within the first year of their production. The result is that those working in this world need to either think about how you can eliminate overproduction, or instead build new business models around only making and selling the four that are actually wanted, he explains, even if it affects business growth.
An alternative response to that concept is the so-called “circular economy”, whereby items are not discarded but put back into the system, which to overly simplify matters, enables businesses to continue with growth while aiming for lesser impact. But Dillinger believes such moves are merely providing brands with a guilt-free alternative to keep overproducing at a point when the technology for a truly circular system isn’t yet scalable. He instead refers to the idea of credible “circular industrial ecologies”, which are much more complex to operate and achieve.
“One of them is a corporate compliance officer selling a new shiny penny to a board of directors in the C-suite, and the other one is a studious and scientific approach to really tackling a real challenge,” he explains.
At Levi’s, Dillinger is otherwise looking at key areas like reducing the brand’s use of water. “I think people’s right to drink fresh water should be prioritized above a company’s right to access fresh water for production,” he explains.
In this conversation, hosted in front of a live audience at the Current Global’s Innovation Mansion at SXSW 2019, he explains what that looks like through the innovative work he’s been doing with hemp. He also gets technical with host Rachel Arthur about the many ways in which Levi’s is working to make its supply chain responsible in one of the most complex industries in the world.
Consumer demand for more responsible products is clearer than ever, and companies – from legacy names to newer players in the field – are evolving their business models to incorporate more sustainable practices.
To hit their ambitious sustainability goals, the approach is diverse, from using blockchain in the supply chain to finding new ways to bioengineering innovative textiles.
Last year, TheCurrent Global’s Innovators podcast spoke to some of the world’s top brands and companies on what it means to be sustainable at this day and age, and how to create a more responsible future that will enable them to still be around in decades to come.
H&M has some of the fashion industry’s most ambitious goals: by 2030, it aims to use 100% recyclable or sustainably sourced materials. Nina Shariati, who leads transparency at H&M, spoke to TheCurrent Global on how the group’s size in the fast fashion space could work in their – and everyone’s – favour: “We see it as a positive thing that we are a large company where we have [these ambitions], and we see that with the help of our size we can drive this change that we want to see.”
For example last year already, 36% of H&M’s total material buy was recycled or sustainably sourced. “What we want to do with transparency is to set a measuring index that harmonizes the industry so that you can compare your product across brands,” adds Shariati. “We are far from the time where it’s OK to work in silos.” The ultimate goal, she notes, should be to empower consumers by enabling them to make more informed decisions.
For Matt Scanlan, CEO and co-founder of the disruptive cashmere brand Naadam, being sustainable means transforming your supply chain into a community. The brand was conceived after he spent a month with local communities in the Gobi Desert learning about their lifestyles. He eventually returned with $2 million in cash to buy tons of raw cashmere directly from herders, thus allowing them to earn 50% more profit than in a traditional fashion supply chain. His ambition to disrupt the cashmere industry has grown rapidly since.
But Scanlan still holds some skepticism about reaching 100% sustainability in the supply chain, which he thinks is both fake and impossible to achieve. Speaking to Innovators co-host Liz Bacelar, he also talks passionately about the human side of the industry which, after all, is built on relationships.
Ikea is focusing on creating products and services that can support consumers to live more sustainably, and more healthfully, every day.
According to Joanna Yarrow, head of sustainable and healthy living at the Swedish giant, to achieve its sustainable strategy, the company’s approach is threefold: look at its use of energy and resources – by 2020, it will be generating at least as much energy as it is consuming in their operations; focus on its people and its supply chain; and lastly, work on how to improve its customers’ lives overarchingly.
Since the original episode was published, Ikea has opened what it claims to be its most sustainable store in the world in Greenwich, London, featuring solar panels, rainwater harvesting and a geothermal heating system. It has also introduced a furniture leasing pilot in Switzerland.
Blockchain has an emerging and important role in sustainability, and UK-based designer Martine Jarlgaard was one of the early adopters of the technology in order to investigate a more sustainable supply chain.
In 2017, her namesake label teamed up with London-based startup Provenance to register and trace each step of the journey of a garment on a blockchain platform, which consumers could access by scanning a QR code found on its label.
Speaking to co-host Rachel Arthur last summer, Jarlgaard weighed in on how brands need to redefine the value of a product to change the way in which consumers shop, and emphasized the huge responsibility that sits on the industry’s shoulders to start driving sustainability ahead. “We are such a closed, centralized system. Being open and transparent is the only way forward.”
San Francisco-based bioengineering startup Bolt Threads is arguably one of the most known names disrupting the fashion industry, largely due to its relationship with eco-luxury label Stella McCartney. Working with the brand, it has so far launched pilot products such as a dress made of of lab-grown spider silk, as well as most recently, a ‘leather’ bag constructed out of mushroom leather, or mycelium.
Sustainable innovation and the power it now carries are a direct response to a shift in consumer behavior, he says. “Ultimately it is up to the consumer. [We’re] seeing the speed at which consumer taste is changing – 2017 was a transformative year for sustainability,” adding, “It is getting big really fast and it’s becoming one of the issues at the forefront of the industry because it touches everyone.”
The head of the Neiman Marcus iLab, one of most established retail innovation programs in the world, no longer believes internal teams can deliver the results needed to drive the industry forward.
Incubation units dedicated to innovation through technology are held back by the culture of the legacy organizations in which they have been built, and the cumbersome procurement processes that surround them, Scott Emmons highlights.
Emmons is backing his statement by departing the lab he founded in 2012 to take up a new position as Chief Technology Officer at TheCurrent Global, a consultancy transforming how fashion and retail brands intersect with technology.
“Corporate innovation programs seem to start strong and sharp, but over time, they are devoured and diminished by surrounding day-to-day business processes, making it nearly impossible to maintain momentum. It’s one thing to talk to agility and risk, but when you’re not built for either, measured by cost reductions and operating within a silo, results tend only to be incremental. It’s time for that to change. For fashion and retail brands to succeed, they need to shift from an internally driven culture to one focused on open innovation with the world’s top technology and talent,” says Emmons.
The move marks a new era for retail innovation. Traditional businesses introduced internal innovation teams at a time when digital transformation was the primary goal. Increased competition from nimble digital players, or those willing and able to take risk, resulted in a need for experimentation.
The promise of these incubation units was around driving change from an operations, marketing and corporate culture standpoint in the context of toughening market conditions and ever-increasing consumer expectations. But with the majority of retailers focused on solving and building solutions internally – instantly limiting them on resource and breadth of expertise – successful results have been relatively sporadic.
Neiman Marcus has always been a frontrunner in the retail innovation space, largely thanks to the work Emmons has done. This has included a memory mirror, 4K touch table lookbooks, store associate IOT communicators, intelligent mobile phone charging stations and new fitting room technology.
But Emmons now believes corporate culture and processes are counterproductive to recruiting, onboarding and maintaining relationships with startups or innovative solution providers. He joins TheCurrent Global to focus on that aim alongside founders Liz Bacelar, Chief Executive Officer, and Rachel Arthur, Chief Innovation Officer. Founded in 2017, TheCurrent Global has worked with clients including Gucci, Burberry, Tiffany & Co, Mulberry, Shiseido, Swarovski, LVMH and the British Fashion Council to bring open innovation and actionable insights to fashion and retail brands.
“I am honored to join the team at TheCurrent Global to integrate top technology solutions from around the world into a multitude of retail and brand partners. This methodology is what the industry needs – an agile workforce that can act as an extension of your team,” says Emmons.
Liz Bacelar, CEO, TheCurrent Global, comments: “Real innovation can only happen today by tackling problems in a new way. We all know it is insanity to expect different results using the same approaches. With the help of outside experts, businesses can achieve growth in a new way, with both speed and efficiency. What TheCurrent Global brings is the ability to take the incredible work Scott has done at Neiman Marcus and take it to CEOs who want to lead the innovation conversation. We do that by relying on our industry expertise and access to an ecosystem of thousands of curated startups, technologies and entrepreneurs from around the world.”
UPDATE: Emmons’ story has hit headlines this week, including in WWD, The Business of Fashion, Glossy, Fashion United and more. Before this amazing press coverage, we sat down with him for our Innovators podcast to discuss his reasons for leaving Neiman Marcus, and exactly what he’s going to bring to TheCurrent Global. You can listen to it here or via the links below.
Ask any direct-to-consumer brand and the answer is clear: the death of retail is greatly exaggerated.
Throughout the year, the Innovators podcast by TheCurrent Global spoke to some of the top businesses disrupting the markets they’re in to uncover the secrets to their success.
The one thing they seem to have in common is finding an industry that has long been left untapped, and focusing on a single product category – whether it be shoes, luggage, underwear and more. But they’re also winning by bringing in strong elements of community, having a sustainable story at their heart and launching into physical retail.
Here are our top ones from this year’s podcast episodes:
In April, TheCurrent Global spoke to Toby Darbyshire, CEO of UK-based hosiery brand Heist Studios, on how the brand is innovating such a traditional category. “It struck us that in the age of Harvey Weinstein, the fact that my wife, who is a pretty modern woman, walks into Selfridges’ underwear section and it says ‘listen love, put this on – one of sort of four or five societal normalized views of sexy – and then you can fulfil your purpose’. That seems like an industry at its fundamental that is both broken from a brand point of view but also totally out of kilter with the cultural discourse,” he said at the time.
Heist plans on fixing the industry by placing a large focus on its product development, which begins at the customer and how they feel about tights, to product innovation that takes cues from other industries, such as sports, to better understand the performance and wear of textiles.
Mattress brand Casper is arguably one of the category’s biggest success stories, said to be worth over $750m today, with plans to open over 200 retail locations over the next three years. Today, brands should be deploying three different tools to achieve a successful retail experience, said chief experience officer Eleanor Morgan: trial, service and entertainment.
The brand, which introduced the mattress-in-a-box experience to American homes and beyond in 2014, now paves the way for digitally-native brands that are transitioning from online to offline spaces. Its stores, most recently the Dreamery space in NY, don’t focus on inventory availability and convenience. Instead, the focus is giving customers the ability to enjoy moments with the brand, which involves more practical elements such as try-on and expert consultation.
Cashmere brand Nadaam has built its entire business on relationships, said founder Matt Scanlan. “There are fundamental shared experiences across the human experience that we don’t think about when we’re making clothing; that we don’t think about when we’re trying to look nice” he told co-host Liz Bacelar earlier this year.
Since inception, Nadaam has focused on building a strong bond with the communities that trade raw materials that become its products. That was an important factor to establishing a more sustainable supply chain, and part of a plan to build the biggest platform he could in order to share his message. Consumers are ready for this, he said, which only helps drive his message forward. During the conversation, Scanlan also talked about why 100% sustainability is both fake and impossible, and the challenges of growing such a brand.
These days, Away’s mindset of creating a lifestyle rather than a single-product brand is exemplified by a travel magazine called Here, several successful collaborations with everyone from model Karlie Kloss to basketball Dwayne Wade and a slew of physical stores that sell beyond the simple suitcase.
Footwear label Allbirds was conceived on the idea of creating a simple shoe that had two main focuses: sustainability and comfort. The aim was two-fold because according to co-founder Tim Brown, people don’t buy solely based on a brand’s sustainability credentials, but whether the product itself does what it says on the tin.
During this podcast conversation, Brown also honed in on the importance of businesses taking a responsibility in ensuring a greener future, rather than expecting the consumer to do it themselves. He also talked about the fact the brand has been making strides in product development that aligns with its ethos of sustainability: it recently launched a new flip flop range made with renewable sugarcane soles, the “recipe” of which is open source so other industry names can join in.
Soon after the episode was initially published, Allbirds took its mission online with Meet Your Shoes, a platform that showcased the provenance of the wool and tree styles. For wool, for example, users can read the ‘sheep dossier’ and even pet individual sheep as they stroll across the screen in a video.
Big issues such as sustainability, rising technologies and the changing role of the consumer were major topics of conversation in 2018, as evidenced by the top shows on TheCurrent Global’s weekly Innovators podcast.
Throughout the year, we explored far and wide what those leading the industry are doing to tackle some of the most pressing issues it faces today. Here, we highlight 10 of the most interesting conversations had as we look forward to 2019 and providing even more food for thought for our listeners.
Ian Rogers, chief digital officer, LVMH
Speaking to co-host Liz Bacelar at The New York Times International Luxury Conference in November, LVMH’s Ian Rogers rang the death knell for the chief digital officer, a role he himself holds. The title, he argued, is merely a transitional one as brands become accustomed to a future where there is a digital layer to every consumer interaction. He also talked about how it makes sense that luxury took so long to jump into e-commerce; why CEOs don’t need to know technology intrinsically; and what he’s driving at LVMH to keep up with the level of experience the customer expects online.
“We only have one planet, and the toll [the fashion industry] has on resources today is simply unsustainable,” H&M’s Anna Gedda told co-host Rachel Arthur. With that in mind, the Swedish group is pushing towards an ambitious goal of being 100% circular by 2030. The sustainability expert also talked about how collaboration in the industry is critical and the important role artificial intelligence will play in this field.
A leading woman in the STEM industries, Laurence Haziot, global MD at IBM, believes blockchain will have the same long-term impact that the internet has had on commerce. During this conversation, she broke down what this technology means for fashion, why she is bullish on the efficiencies it could drive throughout the supply chain, and how it’ll play a major role in sustainability and transparency.
“When you’re trying to do something that really creates an impact and is somewhat revolutionary, then you’ve got to put all the chips on the table,” said Tommy Hilfiger’s Avery Baker. For the chief brand officer, who has been with the company for 20 years, risk, authenticity and understanding your consumer are the keys to innovation. She also talked about how the brand has translated its American roots and values to a global audience, how it overcame the unexpected lull, and why magic and logic need to work together.
Lego seeks feedback from six year-olds, and often breaks into moments of play in order to shift siloed thinking. That, believes Martin Urrutia, is how the company remains focused on the relationship between the user and the brick. In this passionate chat, the head of retail innovation also spoke about the importance that technology and a knowledgeable staff both play in creating elevated retail experiences.
Direct-to-consumer luggage brand, Away, received its first round of funding without even having a product, which is a testament of how clear its vision was from the get-go. Co-founder Jen Rubio talks about how she built a brand based on making travel more seamless, how they overcame their first major hurdle, and why listening to customer feedback and constantly iterating is key to innovation.
The future of e-commerce may not be about a traditional website at all, but about existing on multiple other platforms, said NET-A-PORTER’s Matthew Woolsey. One of the luxury retailer’s most expensive sales, a watch, was completed entirely on WhatsApp, for instance. This shows the importance of a customer centric strategy, he explained, from what platform to use to how to integrate data and AI into every process.
“Design is best when it serves people,” said Walmart’s now former VP of design, Dan Makowski. He spearheaded the world’s largest retailer’s e-commerce redesign, explaining that it all came down to focusing on elevating the shopping experience for the changing customer of today. With so many brands now under its umbrella, such as ModCloth and Jet.com, there was a new focus on having a wider conversation in order to cater to different types of consumers, he noted.
Sandrine Deveaux, MD of Store of the Future, Farfetch
The store of the future will solve consumer problems in innovative and meaningful ways, said Sandrine Deveaux, MD of Farfetch’s division dedicated to such a cause. Technology, she said, should not be deployed just for the sake of it, but to create better shopping experiences driven by personalization. She referred to the experience of Apple, but the convenience of Amazon, and why she’s on a quest to change the way luxury brands think.
Guive Balooch, global VP of L’Oréal’s tech incubator
L’Oréal is on a mission to marry technology and beauty in order to enhance customer’s lives, said Guive Balooch, global VP of the beauty group’s tech incubator. From the connected hairbrush to the customized formulas or augmented reality makeup apps his team has created, the key is thinking about how to personalize all interactions and solutions for consumers, he explained. “In 10 years time there’s no question to me that every person will have the ability to have the perfect product for them,” he noted.
The future of e-commerce may not be about a traditional website at all, but about existing on multiple other platforms, expresses Matthew Woolsey, managing director at online luxury retailer, NET-A-PORTER, on the latest episode of the Innovators podcast by TheCurrent.
The company sees many of its big customers making purchases over platforms including Whatsapp, iMessage and WeChat, which have become their primary entry point to e-commerce through their relationships with personal shoppers, he explains.
“We want to be in the platform where our customer is engaging with content, seeing the product or speaking with the personal shopper. It’s about what’s best for her. We never want to be in a position where we are forcing or imposing a platform or methodology on our customers, because that’s the opposite of customer centricity,” he explains.
“It’s very easy to imagine a time when NET-A-PORTER doesn’t even have a website, in the traditional sort of desktop sense, and really what it exists as is more of a concierge, on-demand, service offering. I think that’s the future of where this industry is headed and it’s something we are really well suited for because we have that infrastructure, we have that service component but we also know a lot more about our customer than just what she is buying.”
Data is central to being able to personalize the experience for individual customers in this way, he explains, outlining how the company is constantly looking at how to give its personal shoppers greater tools through technology.
The company is currently experimenting with how it can use artificial intelligence to merge data between purchase history and fashion trends to give personal shoppers recommendations and ideas in advance that are personalized to the customer, for instance.
Eventually the idea is for this to be scalable across the seven million consumers NET-A-PORTER talks to, but hitting its EIPs, or extremely important people, is the core focus, given the fact this 3% of its customer base, make up 40% of its revenue.
Speaking with Rosanna Falconer at a FashMash event in London, Woolsey also reveals why the most expensive item ever bought via a messaging app is so significant, whether NET-A-PORTER would ever think about physical retail, and how to manage the modern day tension between algorithms and inspiration.
Successful retail experience today is about trial, service and entertainment, says Eleanor Morgan, chief experience officer of direct-to-consumer mattress brand Casper, on the latest episode of The Innovators podcast by TheCurrent.
Speaking to Liz Bacelar at The Lead Summit in New York, she says the company really focuses on designing experiences that are optimized for those three things rather than inventory availability and convenience. What’s key is giving customers the ability to try out products, get consultation from experts in house and enjoy moments with the brand.
Casper has grown from an online retailer to a brick-and-mortar business with 20 stores across the US, along with an innovative sleep bar. The Dreamery, as it’s called, is a new napping space in New York built around experiential aims. It offers nap pods in a peaceful lounge along with a Casper mattress where consumers can pay $25 for a 45-minute snooze.
It also serves as an extension of the brand’s aim to drive a cultural change around sleep. “The Dreamery is a provocation and a way to essentially say, it’s not only acceptable to take a nap during the day and take a break, but it’s celebrated, and we can actually build a community of people that really value this and feel like it’s a socially fun behavior,” Morgan explains.
Casper was founded in 2014 with the mission of bringing great sleep to more people. With the diet and exercise industries booming, the founders saw a gap where sleep was completely ignored. Today, Casper is worth over $750m and has plans to open 200 store locations within the next three years.
Morgan attributes much of the brand’s growth to staying customer centered and focused on data. The company opened 18 pop-up stores in four months to test consumer engagement before opening its first permanent location, for instance. Through feedback and reviews from its consumers, it has been able to understand what their needs are, how they purchase their products, and how to improve their shopping experience.
During the conversation, Morgan also talks about the secret sauce to creating successful pop-up stores, what a modern sleep community looks like, and where Casper will be headed in the future.
Catch up with all of our episodes of the Current Innovators here. The series is a weekly conversation with visionaries, executives and entrepreneurs. It’s backed by the Current Global, a consultancy transforming how consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.
The role of the chief digital officer shouldn’t exist, says Ian Rogers, who is himself the chief digital officer at LVMH, on the latest episode of the Innovators podcast by TheCurrent.
Speaking to Liz Bacelar in Hong Kong during The New York Times International Luxury Conference, he argues that for any large company, the role should be merely transitional as brands become accustomed to a future where digital is simply embedded within everything that they do.
“The word digital and the insinuation that this transformation is about technology is really misleading and it makes people make the wrong decisions. So what I really want to convince people of is that this is not a technological change, it’s a cultural change,” he explains. Instead, the role should evolve into a chief technical officer who sits at the executive table alongside more established players like the CFO and the CEO itself, he notes.
Rogers joined LVMH in 2015 at a pivotal time for the group, which like many luxury players was navigating a new consumer demand for more digital experiences and introducing e-commerce to its more traditional brands.
Since taking on the role, he has helped LVMH launch multi-designer e-commerce platform, 24 Sèvres, invest in affiliate shopping platform Lyst, and scale LVMH’s presence on China’s TMall platform from zero to 12 portfolio names.
Rogers big focus is on the customer, he explains. He brings that learning from his previous career in the music industry, where he led the launch of Apple Music after it acquired Beats Music and Beats Electronics for $3bn. Understanding every customer touchpoint, which now begins with digital, is key for a successful experience that navigates seamlessly across all channels, he explains.
During the conversation, Rogers also talks about how it makes sense that luxury took so long to jump into e-commerce; why CEOs don’t need to know technology intrinsically; and what he’s driving at LVMH to keep up with the level of experience the customer expects online.
Catch up with all of our episodes of TheCurrent Innovators here. The series is a weekly conversation with visionaries, executives and entrepreneurs. It’s backed by TheCurrent, a consultancy transforming how consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.