Innovation in the Fashion Industry: A Study of Four Cases

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Table of Content

Introduction

Page 3 Page 3 Page 3 Page 5 Page 6 Page 6 Page 8 Page 10 Page 12 Page 13 Page 14

The history of fashion Major trends and developments in fashion Company Selection Analysis of the Companies House of Einstein Zara Fragile TOMS Conclusion Teamwork References Appendix

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Introduction
The history of fashion
In order to fully understand where the fashion industry stands today in terms of organizational forms and strategies, we first look at the transformation this industry has gone through. This paragraph will analyze the changes that have occurred in the fashion apparel industry in the past century. We will also discuss some of the major trends that are visible in the fashion industry today. Up until the 1960s, the fashion industry was roughly divided into two groups. First there were firms which were based on mass production, with low costs and standardized styles that did not change frequently (Bhardwaj & Fairhust, 2010). During this time, a large group of consumers was less sensitive to fashion and had a preference for practical, basic apparel. Secondly there was the luxury fashion industry, which originated in France. A small group of French traditional players set up a special association called the Chambre Syndicate de la Haute Couture (Djelic & Ainamo, 1999). With this association they controlled the luxury fashion industry by setting specific rules. Under these rules the label ‘haute couture’ could be granted only to the organizations that met the requirements. The criteria were set high, which made it hard for foreign companies to acquire the label of Haute Couture. In the late 1960s, global trends redefined the environment of the fashion apparel industry (Djelic and Ainamo, 1999). The middle­ and upper­middle class was growing in mass and in buying­power. Individuals within this group of people were looking for ways to distinct themselves. The education­level of the western consumers was getting higher and their level of expectation increased with it. These new consumers were not only looking for perfect quality, service, and design, but also expected lower prices and immediate satisfaction. This upcoming group of consumers created a window for new competitors in the fashion industry. By acting upon these environmental changes and using them to their own advantage, the new competitors in fact reinforced the developments already occurring. A number of companies were not looking to acquire the label of haute couture, but instead made the most of their marginal position and created an entirely new industry: the luxury ready­to­wear (Djelic and Ainamo, 1999). These companies tapped into a growing group of middle­ and upper­middle class customers that were benefiting from a significant period of economic growth. In order to compete, these new competitors tried to forecast consumer demand and fashion trends long before the actual time of consumption (Bhardwaj and Fairhust, 2010). Recent years have shown a new way of competition in the fashion industry, which is called “speed­to­market”. A speed­to­market strategy starts with a firm’s ability to provide rapidly the fashion trends revealed by fashion shows and runways (Bhardwaj and Fairhust, 2010). Organizations no longer try to predict trends, but wait until they can know for sure and then quickly start manufacturing and distributing.

Major trends and developments in fashion
The highly competitive and fragmented nature of the fashion industry today pushes organizations to constantly

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innovate by being creative in their offerings in order to maintain a competitive edge. Many retailers have extended the number of ‘seasons’, which means that the entire merchandise of a store changes more frequently. Growing concerns with the way that clothes are produced give rise to reassessing organizations’ supply chain and production methods, online stores create and offer new distribution channels and experience becomes an important part of a brand’s presence. We have made an overview of several sources on the trends currently in play in the fashion industry (Appendix). Overall we can conclude that the meta trends in fashion are; a growing concern about sustainability, growth of e­commerce, as well as interaction and engagement (I&E). Businesses try to identify trends and use them to innovate.

Sustainability
In the 21st century people started to have a worldwide awareness of the detrimental effects, the result of the consumption economy, which is a problem in many industries. Especially in fashion, since the child labor was a big issue in the 1990s when it was brought to our attention in the media (Lagerie, 2013). Nowadays there is an increased connectedness of consumers through online media, which means that companies with skeletons in their closets have no choice but to address these kind of issues before they are ousted by the public. A very recent example is the use of Angora wool in fashion garments. This soft and warm wool from the Angora rabbit is not collected by shaving, but by plucking the wool from live rabbits, inflicting so much pain that they are screaming during the process in the factories (CNN.com, 2013). Due to the economic crisis, tighter wallets have lead consumers to reevalute the way they buy clothing. As a reaction to the wasteful fast fashion, emerging in 2010, a new “slow fashion” movement is gaining popularity (Pookulangara & Shephard, 2013). This way through ethical consumerism, attention is paid to the entire value chain of a product to make sure that all processes, such as supplies and labor wages, occur in fair humane conditions. To really make a difference on a global scale, large clothing corporations should focus their efforts in rethinking their processes (Brito et al., 2008). One non­profit platform that hopes to inspire new ways of thinking, Forum for the Future, works together with large organizations in shaping the world of tomorrow across many industries. Levi Strauss & Co participate in the joint project Fashion Futures 2025, which is aimed at making the fashion industry sustainable in an economical, social and environmental way (Forumforthefuture.org, 2013). Although the trend of sustainability is clearly visible within the fashion industry, it is questionable whether consumers really care for ethics. According to Young et al. (2009), there is an ‘attitude­behavior gap’, where 30% of all consumers indicate that they are very concerned with environmental and social issues, but struggle with translating this in their buying behavior. The reason for this, besides a possible lack of availability, is that consumers are not always willing to pay more for a sustainable product. De Pelsmacker, Griesen, and Rayp (2005) analyzed whether consumers were willing to pay a premium price for a fair­trade product. Only 10% of their respondents was prepared to pay more for a sustainable product. People will say that they care for the environment, as this is a socially desired answer. But it has been proven that price, quality, convenience, and

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brand familiarity are often the most important factors affecting the buying decision (Pelsmacker, Griesen, and Rayp, 2005). This explains why firms like H&M and Primark are extremely successful, even though they are not known as being sustainable. The low prices and convenience are more important for a large group of customers.

E-commerce
This is a global phenomenon of buying and selling products online dates back to when Amazon started selling books through this new distribution channel in 1994. Brands benefit from this form of selling because they are able to acquire the entire margin between cost and retail prices, adding up to 20 to 30 percent more profit (Reuters, 2013). While electronics and books were the first to claim an online presence, fashion has just propelled into this market. This online presence will become the new standard in the industry, which has prompted many new players to join the market. Globally, around one third of internet users buys or tries clothing with just a click of a button (yStats.com, 2013). Online media are not only used for purchasing, but also for reviews and comparison of goods. Fitting in with busy lifestyles, online stores are a perfect solution for allowing customers to buy and compare merchandise from literally anywhere. A few barriers still exist that are important to fashion, namely the touch/feel and the size fit of a garment, which is hard to estimate through looking at an image. Since most stores offer free returns for items that didn’t meet buyer expectations, coming up with new ways to reduce these barriers can give stores the benefit of higher profit margins (Shear, 2006). The explosive growth of online retailing doesn’t necessarily mean that physical stores will disappear from the fashion landscape, rather the so­called clicks and bricks will go hand in hand (The Economist, 2013). It will be interesting to see how the synergy between physical stores and online retailing will evolve over the next decade.

Interaction and engagement
To be able to compete in the fast­changing and growing fashion industry, companies cannot withstand with just their products on offer. Connecting and engaging with the customer to create added value is vital in the Experience Economy: “Although experiences themselves lack tangibility, people greatly desire them because the value of experiences lies within them, where it remains long afterward” (Pine & Gilmore, 1999). The best way to do is by pursuing niches, where a close community can be cultivated to fit the needs and wants of the customer. Customers will share concepts of a brand with their network when they can experience a brand through meaningful ways. Creating a (positive) online buzz through different social media channels, creates Word of Mouth (WoM), and can have inherent viral effects (Camarero & San José, 2011). The role of data will become more important, companies that are able to derive useful information and processes from the data will thrive, as smarter technology is able to anticipate customer preferences and fits for example. Augmented reality is another addition where in­store and online fashion retailers can benefit from.

Company Selection
In the introduction a review was given of the past and current fashion industry, including current trends. To analyze the current trends, we focused on four companies within the fashion industry. Every chosen company has an

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innovative but different business model. The four companies that were chosen are House of Einstein, Zara, Fragile and TOMS. Each company was chosen for a different reason. House of Einstein with its online focus, a company based on personalized fashion advice for men. Secondly Zara, a large multinational with online and brick stores. Zara focuses on low prices and the ability to quickly adapt their assortment according to the latest trends of the high fashion industry. Third is Fragile is a fashion company that designs high­fashion for pregnant women, focussing on shape so that clothes can be worn during and after the pregnancy. This company was chosen because it addresses a very small niche market. And finally TOMS, a company where fashion, social development, and profit come together. As a buyer of the shoes, you support children in a (developing) country and the individuals who produce the product. In the following paragraphs these companies will each be analyzed using of The Innovation Radar (Sawhney, 2006) and the above mentioned current trends.

Analysis of the Companies
House of Einstein
General information
House of Einstein was founded in april 2012 by Jantien Herfst and Mei Ling Tan, both alumni of the Delft University of Technology. The two had met at various intervals throughout their studies with a passion for innovation and entrepreneurship through events at the university’s incubator. Jantien graduated in 2008 and started her career as a consultant. After a year she was drawn to the world of entrepreneurship and startups, and started working as an Incubation Manager at Dnamo Rotterdam. Mei Ling also joined Dnamo as well in September 2011. Through the insights they gained from working at the incubator they eventually came up with their own idea for a company ­ a personalized online shopping experience for men ­ and decided to put all their efforts towards realizing the idea. Within a week they had finished their business plan, and the next two months they gathered high class brands that were willing to cooperate in their venture. They used the approach “fake it till you make it”, called directly to the offices of local CEO’s of brands such as Bjorn Borg and Ralph Lauren to pitch their business idea. They told the CEO’s that all the other big brands had already joined and that they would miss out if they did not. It was very convincing and they were able to go live. The name of the company was inspired by the beautiful castle­like house where they worked, since it was rumored that Einstein stayed there back in the day. Initially they set out looking for customers through their own network, male friends and fathers of friends. The unique combination of Skype intakes and fittings in the comfort of your own home was a concept that soon reached more men through positive WoM. In just a little over a year they have reached several important milestones and continue with high aspirations for the future. For example, to access more capital to further develop their company they recently won the second round of the New Venture competition and have a good shot at winning the final round as well.

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The business model
The way the business model works is explained in six steps: 1. a new customer has a 15 minute intake with one of the outfitters on Skype; 2. the outfitter assembles several complete outfits based on the customer’s tastes and preferences; 3. the outfits are sent to the customer in an ‘Einstein Box’; 4. the customer is able to try on the outfits in the comfort of his own home and keeps the items that he likes (and pays the same price as he would in a retail store where the clothes are also sold); 5. items that he doesn’t like are returned free of charge; 6. and the customer is asked to provide feedback regarding the returned garments (for example, was it because of personal taste). The dimensions of the Innovation Radar (Sawhney, 2006) that House of Einstein excels in are; Offerings, Customer experience and Process. These will now be discussed. Offerings What House of Einstein offers is a “super personal outfitting experience” ­ for men ­ in the form of pre­assembled complete outfits based on each customer’s personal taste and style. This target group was selected since most fashion sites focus on women and because of the problem that a lot of men need advice assembling clothes to make up an outfit (for instance, color blindness is known to affect men more than women). Taking the guessing work out of shopping, the outfits are sent to the male customers after a personal online intake. Customer experience Each individually packed Einstein Box comes with a handwritten note from the outfitter as a personal touch. Another part of the experience are the ‘Einstein Borrels’ (Borrel is Dutch for drinks) they organize as a way for customers to get to know the company, the concept and the outfitters in an informal way. Usually these take place in a cafe in a city centre. They also bring the shop to the offices of, for example, large consultancies where they set up a mini store in the building and potential customers are able to try the concept. Process Playing in on the trend of digital fashion, the company is building their own IT code that will eventually create better matches between items selected by the outfitter and the customer. Automation of processes and reduction of errors of course leads to greater efficiencies, which is beneficial to the company.

Innovativeness
The meta trend of e­commerce has reached many industries over the past couple of years. With complete assembled outfits, House of Einstein taps into the trends of e­commerce and I&E. The concept of free personal tailored shopping advice is one which House of Einstein was first to offer in the Netherlands. However, the concept is not new to the world. In the United States, The Trunk Club started the same concept in 2009, three years prior to House of Einstein. In Germany they have Outfittery, which launched around the same time as House of Einstein in early 2012. The success of the concept is apparent, since House of Einstein no longer holds a monopolistic position in the Dutch market. In March 2013, The Cloakroom has also

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imitated the concept. The fact that all these companies are receiving large amounts of venture funding means they’re on to something and the way they each claim a spot in the market is an ongoing process. Maintaining a first­mover advantage by making sure that what they offer is of greater value than that of competitors will be crucial to survival as more companies will catch on. House of Einstein hope that the development of their IT code will create the best possible matches between outfits and customers, creating maximum customer satisfaction, reducing the amount of packages returned and in turn they will benefit from higher profit margins. Engaging and interacting with customers through social media and also offline through their social events and pop­up stores is where they can make a difference in how they are unique and provide extra value to customers. The very personal attention received from the outfitter adds value for men who are looking for some help deciding on what to wear. As a small company it is easy to add those little extra touches that make the overall experience very personal. However, with ambitions of becoming a large player and expanding to other countries, keeping a focus on this dimension is key to maintaining their competitive edge. Although the concept is perhaps innovative, it is not very unique and can easily be copied. Therefore, innovating along more dimensions in the Innovation Radar can provide extra strength and raise barriers to proponents. A niche approach works well in creating focus, doing something very well for a relatively small group of people, slowly building and creating a strong brand.

Zara
General information
Zara originated in Spain in 1975 and is part of the investment group Inditex. In addition to Zara, Inditex Group owns seven other clothing chains, such as Bershka, Massimo Dutti and Zara Home (zara.com). Zara is a multinational company with more than 1750 clothing stores all around the world and aims to offer affordable clothes, following the latest fashion trends. Zara’s has two main competitors in terms of market share, these are H&M and Gap. Although these leading fashion stores have a lot in common, they also differ in their business models. While Zara controls its entire production chain, Gap and H&M outsource all their production. Advertising is a strong communication tool for both Gap and H&M, while Zara does not focus on advertisement. The location of the store is a key principle for both the H&M and Zara business models (Lopez et al., 2009). One of the main streams in fashion is ‘fast fashion’, of which Zara is an example. Fast fashion is described by Zull and Turconi (2008) as follows: “In fast fashion customer preferences can shift literally overnight, product lifecycles are measured in weeks, and the value of your product will drop immediately if you miss the latest trend”. This is exactly why it is interesting to see how Zara organized its business model, considering they are able to keep up with this fast fashion while being the multinational they are.

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The business model
In this next paragraph the business model is described using the innovation radar of Shawney (2006) as a guide. Offerings and supply chain Zara has been widely recognized for the way in which they are able to offer the latest fashion trends to their customers via their lean and fast supply chain (Tokatli, 2008; Lopez et al., 2009; Ghemawat et al., 2003; Mustonen et al., 2013). Because of this supply chain Zara can be seen as innovative on two dimensions of the Innovation Radar; on the consumer side for their offerings; always able to offer the consumer the latest fashion trends. From a company structure point of view they are innovative in their supply chain and were unique because they own the full chain. This business model is not that innovative anymore these days, but is still very profitable for Zara. Because of the lean supply chain they are still able to innovate in their offerings to the consumer and can therefore be perceived as innovative in this dimension. Customers and presence From observing the development of Zara, a change in the business model can be identified. Up till 2008 their strategy was to not be online, but to focus on their brick stores. This has changed now and Zara does not only has an online shop, but is also present on many different social media channels (for example Facebook, Pinterest and Twitter). What makes them stand out here are their lookbooks. Basically these are ‘online runways’ where the clothes are shown in different combination and styles. This change made a difference in the way Zara met consumer needs, since they are served online now as well. By going online their presence has broadened, from brick only to brick and online.

Innovativeness
When looking at the innovativeness of the model, similarities with two of the meta trends can be identified. First I&E can be seen in the way Zara approaches her customers. An example of this is the Fashions Night Out Zara organizes in collaboration with the magazine Vogue. The concept is that on a particular date, a party is organized all around the world. Customers of Zara can go to these parties and of course show up in the latest fashion and Zara clothes. Media coverage is given to this by Vogue and also online via social media. This is an innovative way of engaging with the customers, outside the (online) stores. The second trend followed by Zara is e­commerce, where they are definitely no early adopters.Our opinion is that Zara is not a front runner in following the trends that we identified. They have been widely recognized for their innovative and agile supply chain and they are still benefitting from that. However, in following the current trends, we would classify them as followers. Although being a follower might be perceived negatively, the contrary could be argued as well. Zara is a large company, which does not want to jump on any trend that appears. They need to be selective and only anticipate on trends that are here to stay.

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Fragile
General information
Fragile was started in 1990 by the Belgian entrepreneur Nathalie Vleeschouwer. Vleeschouwer was a student at the fashion academy in Belgium. She didn’t feel much for the glamorous fashion world and started looking at the maternity fashion that was offered at that time. She found that the maternity clothes were very practical, but that it was not pretty or fashionable and not many stores offered it. When Fragile was founded, the firm presented a small collection of fashionable pregnancy clothing. By doing this it dissociated itself from the tent dresses and dungarees that dominated the pregnancy clothing industry at that time. Nowadays, Fragile is known all over the world. It has numerous outlets in France, Italy, Germany, The Netherlands, Spain, Switzerland, Austria, Denmark, Great Britain, Poland, Japan, Korea, Jordan, America and Iceland. Fragile’s customers are women who love the brand and even after their pregnancy keep enjoying their fashion that adjusts itself to the body. The brand invests its profits in higher quality fabrics, nicer stores, better employees, and a better work­environment in the Fragile­lab. In 2010 Nathalie Vleeschouwer was awarded the title of Female entrepreneur of the year by UNIZO (the Belgian union for entrepreneurs). At that time the firm had 14 employees. Revenues in 2009 were 4,2 million euro’s.

The business model
Fragile delivers high fashion maternity clothes that enable pregnant women to feel comfortable, free and attractive. The designers focus on shape, and make the clothes wearable for both during and after the pregnancy. This solves an issue for pregnant women, who normally didn’t want to spend too much money on clothes they could only wear for a limited period of time. Fragile is the first to design maternity clothes that are also wearable after pregnancy. Their offerings are really innovative. The clothes of Fragile are fashionable and adjustable to every type of body. Fragile uses high quality fabrics specifically chosen for sensitive skin. This is especially important for pregnant women, since they often can’t endure a lot of materials on their skin. Fragile targets a very small niche market, which exists of pregnant (business) women that still want to look their best. This is a consumer group that had not been served until Fragile entered the market. So Fragile is also very innovative in the dimension of “customer”, as described by the innovation radar. Fragile discovered that a lot of its customers are not pregnant but love the design, which led to a line with non­maternity clothes. One could argue that Fragile used the strategy of entrepreneurial Judo: it found a niche and created a stable set of customers (Drucker, 1985). From there on the company tries to conquer the rest of the market. Fragile’s flagship stores offer an unique experience. In these stores there is an emphasis on personal contact with the customer. The organization attempts to build steady and calm relationships with its customers. The idea behind this is that pregnant women often need a little bit more attention and assistance when picking out

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new clothes. The flagship store’s offer a complete offering of maternity products, which is convenient for Fragile’s customers. The company is quite innovative in creating the best customer experience in their stores. Besides the customers, Fragile also emphasizes close contact with the producers, suppliers, and boutiques where their clothes are being sold. The organization chooses local producers as often as possible. The advantages of local producers are speed, convenience, and creating goodwill within the local society. The firm noticed that 50% of the customers of Fragile were not pregnant, but loved the brand and wanted to have the clothes. There were many requests for non­maternity clothing. The first collection with non­maternity clothes was presented before the fall of 2011, under the new brand name of Nathalie Vleeschouwer. One could argue that Nathalie has, deliberately or not, used the strategy of entrepreneurial judo (Drucker, 1985). This means that the company starts targeting a niche market, which is not yet addressed by the current dominant market players. This way the firm establishes a stable basis of customers and can, from there on, start taking over the rest of the market. When we look at the current trends in the fashion industry, there are two trends that Fragile acts upon. The first trend is sustainability. Fragile claims to use only sustainable fabrics. It should be noted that there is no prove of this to be found on the internet. Another way in which Fragile attempts to be sustainable is with the focus on shape in their designs. Women can wear the clothes during, but also after pregnancy. This way the maternity clothes don’t have to be thrown away, and the life cycle of a piece is claimed to increase. However, it is not uncommon for pregnant women to give their maternity clothes to friends or second­hand shops after their pregnancy. One should not assume that the adjustable shape increases sustainability. Where clothes used to be passed on, they are now kept by the person who bought them. So maybe sustainability increases only for the person who bought the clothes. The second trend Fragile is acting upon is I&E. Online shopping is becoming more and more popular and a brick­and­mortar store should add some sort of value to the face­to­face presence of the customer. Fragile places great emphasis on personal attention for every customer, and attempts to create a unique experience in its own flagship stores. It also tries to influence the different boutiques where Fragile is being sold in giving the customer extra attention and in trying to provide the best service. Customer experience is increasingly important. However, Fragile only engages and interacts with customers offline. This is in line with the argument that Fragile does not act upon the trend of e­commerce. Online, Fragile has a Webshop and a Facebook page, but it is all one­way communication. There is no dialogue between Fragile and its customers, and customers are not encouraged to engage. This is remarkable, as we noted earlier that targeting a niche market can help create a close community that can be cultivated to fit the needs and wants of the customer. Online presence can be a point to improve for Fragile, as an online community can be a great added value to a brand.

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TOMS
General information
TOMS was founded in 2006 by the American Blake Mycoskie. There were two things that inspired Mycoskie to start with TOMS. First, as he was traveling through Argentina he noticed that many children did not have anything to protect their feet. Secondly, he discovered a unique farm shoe that locals wore, the Alpargata. Through founding TOMS Blake wanted to give a solution to the shoeless feet. This is a for­profit company that matches every pair of shoes purchased with a pair of new shoes given to an impoverished child, using the foundation One for One (a non­profit). In 2006 TOMS started giving shoes in Argentina and now TOMS gives in 60 countries. After the success he realized that he could use this movement to serve other basic needs and to expand its offerings, always using the One to One principle. In 2011 TOMS Eyewear was launched. For every pair that is sold, TOMS will give sight to someone in need. TOMS also started selling apparel, including sweatshirts, t­shirts and caps. One pair of shoes is provided for a child in need for every TOMS item that is sold, excluding eyewear. TOMS now has a new way to shop on www.TOMS.com: the Marketplace. Marketplace features companies that have been hand picked by the TOMS team, because of their devotion to give back to communities all over the world. Items sold on Marketplace do not give a child shoes or restore sight to a person, but they do benefit the specific cause of that brand partner. Nowadays, over 500 retailers carry TOMS shoe collections, which can be independently­owned small businesses or big retail stores like Bloomingdale’s and Urban Outfitters. TOMS now sells in 35 countries and is still growing.

The business model
Organization TOMS uses the trademarked “One for One” concept, which refers to the sell one and give one principle. This principle can be seen throughout the business model and the organization. Within TOMS for­ and non­profit comes together, which is a form of ‘philanthrocapitalism’. This is when an individual of significant accumulations of financial capital to address social problems so as to effect social justice, thus from the successful capitalist to the disenfranchised poor (Lorenzi & Hilton, 2011). For this business model to work both sides are interdependent. Non­profit does not have to fundraise and can rely solely on the profit to provide the money to give shoes and sight. The sales of the products (for­profit) are probably higher because of the philanthropic side of TOMS. Supply Chain & Offerings As with other big companies, there are issues you have to work through to get the products to the customer, but that is not innovative. What is innovative about the supply chain is the way they determine which children in need will receive shoes or sight. TOMS chooses organizations to become partners in humanitarian, health, and educational fields. Those partners are mostly based in the third world countries and help find out where the shoes

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are most needed. TOMS has five criteria which those organizations have to meet before they can become a partner. Than they use ‘Shoe Drops’ to give the shoes to the children and the shoes are given to the children by putting the shoes on their feet. Research about the area is done, so that the shoes which are offered to the children are most useful. For instance, the rubber sole will be thicker in an area with monsoons and most of the times the shoes are black, since having black shoes is a requirement for going to school in some countries. Networking TOMS has no marketing budget, but uses other ways to network. WoM is used for much of its sales, where corporate social responsibility is the main focus. TOMS also only hires people that are passionate about its mission, which probably has a positive effect on WoM. Furthermore, TOMS uses social media to get their message to many people, like viral videos, Facebook, Twitter and their website. They use the campaign ‘Take a picture of how you use your TOMS’, which people can upload onto the website. And finally, TOMS does different promotional activities, such as the “One Day Without Shoes” campaign, university campus marketing, style your shoes parties, high profile events, fashion shows, and temporary pop­up stores.

Innovativeness
The three trends sustainability, e­commerce, and I&E are all incorporated in the business model of TOMS, but in different degrees. Sustainability is part of the core of the business model of TOMS. Over the years they have found new ways to keep their focus centered around this. For instance, they expanded from shoes to sight and apparel, adapted the offered shoes to the area where the shoes are given, and selling products on their website (the Marketplace) of partnering companies that give back to communities all over the world. This shows that they find new and innovative ways to incorporate sustainability in more and more ways in their business model. Secondly, the products of TOMS are sold on their website and websites of other retailers. Even though TOMS did not start selling their products through their own website from the beginning. All the information about TOMS can be found on their beautifully designed and clear website. Finally, I&E is a big part of TOMS, which encompasses almost all their marketing. Social media is their main marketing tool, where WoM is also used on the internet.

Conclusion
We started with a review of the fashion industry and current trends, then we analysed four companies which had different innovative business models. The analysis of the business models was based on the Innovation Radar (Sawhney, 2006). This model gave us a clear structure to analyse the models and therefore helped us to understand the innovativeness of the different business models. The dimension that stood out, and was recognized in all four companies, was offerings. All four companies were innovative in their offered products, although all in a different way. Looking back, this might also be why we chose these companies and indicated them as ‘innovative’; after all the offerings is what we, as consumers, see. The second analysis of the business models was based on the meta trends that we identified: sustainability, I&E and e­commerce. Here I&E, whether or not via online tools,

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stood out and was recognized in all four companies. For the fashion industry as a whole we draw the conclusion, based on the four companies, that the trend of I&E is the one followed by most companies and therefore important in the industry. Although we realize that our research only analyzed four companies and is therefore limited, we believe that this trend is important when looking towards the future. Interlinked with e­commerce, which enables consumers to share and gain information whenever and about whatever they want, this trend has the ability to become even more important.

Teamwork
The teamwork went well, this paragraph consists of a short depiction on how we worked together. During the first lecture the team was assembled and after the first tutorial we got to know each other. Preferences for a subject were retail and we started thinking about companies we could use. After a while we found that we could not choose which subject, but good fortune gave us Retail and furthermore Fashion and Apparel. Everybody choose a company with an innovative business model within the industry. The proposal was written and others gave feedback. Everybody compiled information about their chosen company, and the other parts were divided among the group. In the end we worked together on the paper to make sure nothing was forgotten, to give feedback, revise some parts and to make sure that we incorporated all our knowledge. Thus, the main way we worked together is that we divided the work, then we worked quite individually, after which everybody gave and received feedback which we incorporated. We worked together on the final version of this paper, to make sure that all our views were incorporated well.

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IBIS World. (2012, 6 1). Trends Outfitting the Fashion Retail Sector. Retrieved 11 28, 2013, from IBIS World: http://www.ibisworld.com/media/2012/06/01/trends­outfitting­the­fashion­retail­sector/ Mustonen, M., Pal, R., Mattila, H., & Mashkoor, Y. (2013). Success indicators in various fashion business models. Journal of Global Fashion Marketing, (ahead­of­print), 1­19. Lagerie, P. B. (2013). The wages of sweat: A social history perspective on the fight against sweatshops. Sociologie du Travail , 55(1), 1­23. Lopez, C., & Fan, Y. (2009). Internationalisation of the Spanish fashion brand Zara. Journal of Fashion Marketing and Management, 13(2), 279­296. Lorenzi, P., & Hilton, F. G. (2011). Optimizing Philanthrocapitalism. Society, 48(5), 397­402. De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do Consumers Care about Ethics? Willingness to Pay for Fair‐Trade Coffee. Journal of Consumer Affairs, 39(2), 363­385. Pine, J., & Gilmore, J. (1999). The Experience Economy. Boston: Harvard Business School Press. Pookulangara, & Shephard. (2013). Slow fashion movement: Understanding consumer perceptions—An exploratory study. Journal of Retailing and Consumer Services , 20(2), 200­206. Reuters. (2013, 9 29). Online Retailers Go Hi­Tech to Size up Shoppers and Cut Returns. Retrieved 11 28, 2013, from The Business of Fashion: http://www.businessoffashion.com/2013/09/feature­online­retailers­go­hi­tech­ to­size­up­shoppers­and­cut­returns.html Sawhney, M., Wolcott, R.C., & Arroniz, I. (2006). The 12 different ways for companies to innovate. MIT Sloan Management (2011). Top 10 Lessons on the new business of Innovation, 28­34. Shear, H. (2006, October 1). Managing Product Returns for Competitive Advantage. MIT Sloan Management Review . Sull, D., & Turconi, S. (2008). Fast fashion lessons. Business Strategy Review, 19(2), 4­11. The Economist. (2013, March 23). Mixing bricks with clicks. Retrieved November 29, 2013, from The Economist: http://www.economist.com/news/business/21574018­some­online­retailers­are­venturing­high­street­mixing­bri cks­clicks The institutional YES ­‐‐ interview with Jeff Bezos – ceo of Amazon – Harvard Business Review October 2007 Tokatli, N. (2008). Global sourcing: insights from the global clothing industry—the case of Zara, a fast fashion retailer. Journal of Economic Geography, 8(1), 21­38. Young, W., Hwang, K., McDonald, S., & Oates, C. J. (2010). Sustainable consumption: green consumer behaviour when purchasing products.Sustainable Development, 18(1), 20­31. Zott, C., & Amit, R. (2010). Business Model Design: An Activity System Perspective. Long Range Planning, 43, 216­226.

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Appendix
To gain an overview of all the trends in place, we have identified several sources and the trends they have analyzed and placed them into the table below: Source: (Forbes, 2013) Retailing 2013: Fashion and tech trends to watch. (Ziv, 2013) Fashion 2.0: Season of Change: A Forecast of Digital Trends Set to Disrupt the Fashion Industry Trends: Online; Big Data; 3d printing developments; Brick and mortar shopping; Increased attention to service. Group consciousness and crowd sourcing; the shift from search to discovery; the power of suggestion; the monetization of influence; personal style as a commodity; personalization; interaction and engagement; efficiencies; data. Forum for the Future in cooperation with Levi Strauss & Co. (Ibis World, 2012) Trends Outfitting the Fashion Retail Sector Sustainability Personalization & customization; Going mobile; Social connections; Catering to a changing consumer demographic; Flash sales; Organic, sustainable and locally made;

These trends can roughly be placed into 3 ‘meta trends’ in Table 2: Sustainability Group consciousness & crowdsourcing Organic, Locally made These ‘meta trends’ are used in the analysis of our companies. E­commerce Online, Data, Efficiencies Mobile devices Interaction & engagement (I&E) Brick and mortar shopping, Increased attention to service Personalization Social connections Other 3d printing developments Personal style as commodity Flash sales

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