We started out as an incubator of ideas for the transitioning of the culture of fashion companies online. We provide them with a set of tools that allow them to be independent. But, they are not experts in E-Commerce and we devise together a strategy for the online world. âCEO, Digital Moda, NYC, 2012
On a crisp winter morning in January of 2012, a lively discussion took place at the New York regional headquarters of Digital Modaâan e-commerce fashion company. 1 In the conference room before me the North American CEO, the Head of Merchandising, the Director of Marketing and the Chief Branding Officer discussed how to best approach collaboration with one of the worldâs largest publishers of monthly fashion media. The talk revolved around a partnership proposed by the conglomerate and its likely effect on the partners of Digital Modaâestablished luxury fashion companies. Skeptically evaluating the online selection of fashion content on one of the largest fashion magazines owned by the publisher, the Head of Merchandising at Digital Moda frowned, âcurating content to the max, such as presenting merchandise from brands that happen to be this or that bloggerâs favorite, is unlikely to drive recognition or revenue for us, unless the shopping site that is supposed to sell this curated content also happens to be the site of a well-known brandâ. The North American CEO sighed, and noted that âthe media industry has started to realize that it is productive to link product and content. But, what we want is in any collaboration for customers to be led to [our] content. All this interaction needs to occur online.â The Director of Marketing had assessed how the publishing conglomerate approached collaboration with other e-commerce fashion companies and was not impressed. âIn their initial proposal, thoughts and progression-wise, they were far beyond others,â he noted. âStructurally, however, they still act as paper media publishers. As much as this old player wants to view [Digital Moda] as a partner, they are also trying to indeed impress us with their digital knowledgeâ. The Chief Branding Officerâa longtime fashion industry editorâsettled the discussion. She noted that the online selection of fashion brands featured on the largest in the conglomerateâs portfolio of fashion magazines was â⊠so overcurated. We donât want to niche-fy all of our brands into one property. This is my biggest concernâ. The CEO completed the collective thought process of the small group: âPublishing firms think: how much can we charge for content, instead of what content should we feature? They will never change, however they progress, unless [Digital Moda] tells them how it worksâ.
The above discussion at Digital Moda is a fascinating snippet of data illustrating the struggles for legitimacy by online fashion organizations (e-commerce and social commerce) in the institutional field of fashion over the past decade. e-commerce fashion companies, like Digital Moda, ShopBop.com, and Asos.com, are retail technology organizations that own and develop electronic commerce and marketing technologies to support their operations. E-commerce fashion companies acquire, promote, and sell branded fashion apparel through an electronic medium and without maintaining retail stores to display their merchandise. Social commerce companies, such as Polyvore.com and ShopStyle.com, are the main partners of e-commerce fashion entrepreneurs. These companies engage in a form of e-commerce that links consumers with curated fashion product, displayed in dedicated online galleries where consumers compete with each other to create looks, and âclick-to-buyâ fashion product (Khosrow-Pour 2018). E-commerce and social commerce fashion companies are involved in collaboration that combines two ubiquitous institutional advantages in the fashion industryâthe aesthetic and the commercialâenjoyed previously only by brick-and-mortar s in the industry, such as Neiman Marcus, and fashion magazines, like Vogue.
Since 2006, Digital Moda has operated the e-commerce design, operations, and aspects of digital communications and marketing, for over two-dozen global luxury fashion companies, turning into more than three-dozen brands and growing in 2017. Started by people with no insider knowledge of the fashion industry and driven by the entrepreneurial action of âsimply the doing of new things, or the doing of things that are already being done in a new way (innovation)â (Schumpeter 1947, p. 151, emphasis added). Digital Moda and other e-commerce fashion companies have become accepted as institutional partners by luxury fashion companies, exposing, in the process, traditional fashion companies and their fashion product to a wider global audience, lower price points, and new economic and aesthetic practices. The founders of these new companies frequently referred to their businesses as a new generation fashion companies. Their executives typically arrived from financial and investment banking backgrounds and frequently reported to have been culturally influenced by early digital pioneers, like Amazon and eBay. During their fledgling developmental phase, in the beginning of the aughts, these Internet entrepreneurs used e-commerce technology to start their technology-driven fashion businesses, grappling with competing ideas of validating themselves as brand destinations and marketing channels without any direct access to fashion organizations, fashion media publications, or fashion retailers. For the first time in the history of fashion as a creative culture industry, e-commerce and social commerce entrepreneursâcompanies with limited formal practice in any of the areas of deep institutional expertise of fashion companiesâmerchandising, communications, or retailingâand no prior existing ties in the industry, have gained responsibility for operating the e-commerce of established luxury fashion companies, including marketing, and advertising of their branded apparel product.
The case of these new entrepreneurial organizations is a distinctive study that addresses one of the least understood aspects of institutional legitimation in creative culture industries: the mechanisms by which new organizations achieve legitimacy and garner influence in deeply institutionalized culture industry contexts, where incumbent organizations maintain significant gaps between their strategy formulation (i.e., âthinkingâ) and their behavior (i.e., âdoingâ) and exhibit low aspirations for learning (Meyer and Rowan 1977; March 1991). What are the means by which new creator organizations achieve legitimacy and influence over such culture industry behemoths, as fashion companies? Finally, how have long-standing creatures of ritual in culture contexts, like fashion companies, resolved artistic versus commercial conflict that represents for these mature organizations a chief hurdle to accepting new paradigms in their organizational practice?
In laying out the latter inquiry, I should briefly acknowledge that the conclusions of earlier comparative studies in innovation by Christensen (1997), Tushman and OâReilly (1996) and Christensen and Raynor (2003) still stand. Incumbents across established industries can suffer from dissociative behavior and can exhibit slowness to change in the context of maladaptive practice. Existing players in an industry indelibly fail to appreciate how novelty will affect them, due to the different institutional and business logics operating in these organizations. Newcomer entrepreneurs are, therefore, enabled at least in part, to take advantage of the disruption by creating a viable niche, where they could test new practice that eventually becomes requisite for existing players in a given field. However, creative culture industries present a more complicated reality of adaptation to change than manufacturing contexts do.
This is because fields of cultural production are first, located at an intermediary position âbetween the artistic field and the economic fieldâ (Bourdieu and Delsaut 1975, p. 22). Second, the classic boundary maintenance between art and commerce across culture industries is but a metaphoric representation of organizational reality in these contexts, as the formal structure of organizations in these domains tends to be loosely related to their actual work repertoires, yet closely related to artistic rhetoric and ritual (Meyer and Rowan 1977; Powell 2012). Finally, against this institutional backdrop, cultural fields are increasingly exposed to interrelated processes of erosion of their external boundaries and to ongoing âtransformation of [their] internal hierarchiesâ (Pedroni and Volonte 2014, p. 102; Crane 2012; Entwistle and Slater 2014). The current evidence for a dynamic transformation occurring in cultural industries can be, in part, attributed to the erosion of the institutional advantage of âartâ in these contexts (de-artification); a situation that in some settings field-level constituents attempt to accordingly fortify (re-artification) (Shapiro and Heinich 2012). Artification occurs when cultural industries face changes in opportunity spaces, institutionalization, and legitimating ideology that render the existing boundaries between commercial and aesthetic intent untenable. The ambiguity resulting from these ongoing processes of transformation is potentially detrimental to incumbents because constituent organizational actors in these creative culture contextsâexecutives at various organizational levels, for oneâare averse to challenging the uph...