The Fashion Business

Theory and Practice in Strategic Fashion Management

Dario Golizia

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000408904
• Edition: 1
• Topic: Business
• Subtopic: Fashion & Textile Industry
• Index: Business

This book provides a clear understanding of the different business strategies and models across all markets of the fashion industry.

Providing a holistic and practical approach to strategic fashion management and marketing, the book covers brand image, supply chain, communication, price point and social media. Based on examples from international organisations – including Off-White, Nike and Zara, as well as leading luxury brands – the author identifies 13 core market sectors and explores the strategies applied in each: from creativity to their supply chain and sustainability, from segmentation strategy to brand policies and from pricing to distribution. Each chapter includes features to aid student learning, including interviews with a wide range of experts from across the industry as well as student activities and reflection points.

Theoretically grounded yet practical in its approach, this is important reading for advanced undergraduate and postgraduate students of Strategic Fashion Management, Fashion Marketing and Communications, Fashion Merchandising and Luxury Fashion.

1
Fashion business and strategic marketing¹

Reading: managing a fashion company

What’s behind a dress, a T-shirt, a skirt? There’s much more than a designer, a model and a fashion show. There are a company, its strategy and its management. Moreover, a fashion company is characterised by a very complex organisational structure encompassing many professional, creative and managerial roles. From the Chief Executive Officer (CEO) who decides the strategy of the company, to the Head of Designer who is in charge of the creative process. From the Product Manager, who takes care of production, to the Fashion Buyer who is responsible for purchases. From the PR Manager in charge of brand communication, to the Visual Merchandiser who takes care of the shop fitting. Moreover, a fashion company is supported by the work of many people who operate behind the scenes, but having an equally important role. From the Fashion Stylist, who takes care of the style and of the image, to Influencers who contribute to conveying them. Only a synergic and strategic management of all these managerial figures/competences allows the company to achieve excellent economic and social results. The above-mentioned roles, and many more, are briefly described in the following chapters.

1.1 Definition of industry and the strategic business area

The point of departure is “industry”, which Porter defines as “as the group of firms producing products that are close substitutes for each other” (Porter, 1980, p. 5). Of course the boundaries of an industry, especially in fashion, are not always clear and well-defined. However, defining the industry is not the same as outlining “where the firm wants to compete (defining ‘its business’)” (Porter, 1980, p. 32). Thus, the “decoupling industry definition and that of the businesses the firm wants to be in will go far in eliminating needless confusion in drawing industry boundaries” (Porter, 1980, p. 39). Most industries can be subdivided into distinct and strategic business areas (SBAs), each one made up of its own characteristics. An SBA represents a specific area of the market, which becomes the aim of the products sold by the business. Thus, an SBA has the following characteristics:

• it is strategically relevant and it can be managed independently;
• it has similar products and similar prices;
• it satisfies similar needs;
• it has similar distribution and production strategies;
• it presents similar factors for success (Valdani, 1995).

1.2 Definition of strategy, strategic model and strategic group

In almost every industry, there are companies that attain different economic results. The reason why some make higher profits than others is in one magic word: strategy. Companies implement strategies to convince potential buyers to buy their product and not that of their competitors (Porter, 1985). So what is strategy? Strategy implies deciding how to satisfy the needs of potential consumers, how to respond to the competition and the choice of the industries, markets and segments to compete in (Pellicelli, 2005).

Since we’ve explained what we mean by strategy, we’ll explain the meaning of strategic model and strategic group, the two key concepts of this book. The former is defined as the “simplified description of how a company does business and makes money without having to go into detail of all its strategies and processes” (Corbellini and Saviolo, 2009, p. 121). We are now able to understand the meaning of strategic group, which Porter defines as “the group of firms in an industry following the same or similar strategy along the strategic dimensions” (1980, p. 129). Having defined the industry, SBA, strategy, strategic model and strategic group, we will see how these concepts apply to the fashion business in the following section.

1.3 The sectors in the fashion industry, according to the literature

What is fashion business? Does it correspond to or is it different from luxury fashion? How is it possible to segment (luxury) fashion? Let’s consider six books dedicated to the topic and see how their authors dealt with first two questions and then the third:

1. Inside the Fashion Business by Jeanette Jarnow and Kitty G. Dickerson (1997);
2. Luxe… Stratégies Marketing by Danielle Allérès (2003);
3. Luxury Fashion Branding by Uche Okonkwo (2007);
4. Managing Fashion and Luxury Companies by Erica Corbellini and Stefania Saviolo (2009);
5. The Luxury Strategy by Jean Noel Kapferer and Vincent Bastien (2009);
6. Marketing dei beni di lusso by Fabrizio Mosca (2010).

We can divide the authors’ approaches into four lines of research. The first group embraces those who defined only the fashion business; the second group unites those who have distinguished the concepts of the fashion business and luxury fashion; the third group consists of those who have included only luxury fashion and the last group applies the two concepts indifferently.

Jarnow and Dickerson are part of the first line. They define only the fashion business, saying that it is “generally understood to refer to all companies and individual concerned with the design, production and distribution of textile and apparel goods” (1997, p. 2).

Those who distinguish fashion and luxury include Corbellini and Saviolo (2009) as well as Kapferer and Bastien (2009, 2012 reprint).

The first authors maintain that until the beginning of the 1980s, the word “fashion” was only associated with clothing; later on, it “has increasingly spread to additional segments – fur and hosiery, perfume and cosmetics, eyewear, accessories (watches, jewels, pens, mobile telephones), furniture and household goods, and even destinations and domestic pets” (Corbellini and Saviolo, 2009, p. 6). In addition, these same authors clearly distinguished the concepts of fashion and luxury, specifying that “luxury is connected to one or more segments, defined by price” (Corbellini and Saviolo, 2009, p. 19) and that neither fashion nor luxury defines one single industry or product category; nevertheless, they affirm that though the two terms have different meanings, they are often used as synonyms. Kapferer and Bastien also affirm that the relationship between luxury and fashion is “ambiguous and confusing” and “the overlap between luxury and fashion is in practice extremely slight” (Kapferer and Bastien 2009, 2012 reprint, p. 29). However, they add that they “represent two worlds … very different … and they overlap only marginally (limited to haute couture)” (Kapferer and Bastien 2009, 2012 reprint, p. 31).

Mosca and Allérès define only luxury fashion. Mosca (2010), who wrote a book that focuses on the markets of symbolically high-value goods, asserts that there are eight traditional industries for goods with a high symbolic value, and they are commonly defined industries of the fashion system: clothing, footwear, cosmetics, jewellery, eyewear, watches, leather goods and fragrances; he argues that luxury crosses through each industry, adding emerging industries to the eight previously identified: art and cultural heritage, sailing, cruises, automobiles, hotels and restaurants, food and wine, tableware and cultural services. Allérès (2003) defines a luxury item as an object having characteristics of perfection on every level, from its existence to the consumer; regarding what industries are part of luxury, she maintains that the luxury universe comprises a vast number of business industries. Most importantly, the author identifies three types of luxury: absolute, intermediate and accessible, and she dedicates a specific marketing strategy to each one.

Okonkwo seems to use the two terms interchangeably, first writing that “fashion is a strong force that has always played a significant role in the evolution of mankind’s society” (2007, p. 1). A few lines later, she says that “luxury fashion played a prominent role in the social and economic order of previous centuries and continues to influence our modern societies, economies and governments” (2007, p. 1).

Let’s continue to examine whether the authors consider how to segment the fashion business. From the above-mentioned texts, only Jarnow and Dickerson and Saviolo and Corbellini have looked at this.

Jarnow and Dickerson, using the “Standard Industrial Classification (SIC)” (1997, p. 6), subdivide the fashion industry into four segments. Corbellini and Saviolo maintain that “the fashion system is made up of many industries… . Luxury is a segment defined by price within the fashion system but also in other industries… . These industries in turn can be further subdivided into different competitive segments”...