Fashion is a leading indicator of dramatic changes underway across the consumer economy. We asked the man known as the father of modern marketing, Philip Kotler, to tell us more
Your latest book, Onlife Fashion, is about high-end fashion brands. Why did you focus on this sector?
In the past, when miners went down into a coal mine, they brought a canary with them. The bird was much more sensitive to poisonous gases than they were, so if it died in its cage, it meant they needed to escape. Today, the phrase ‘canary in the coal mine’ is used metaphorically, referring to something that serves the task of sending an early warning signal. Fashion is like a canary in the coal mine. It serves the task of sending an early warning signal of a change in society.
The consumer society is evolving, and what is happening today in fashion will happen tomorrow in many other sectors. I believe that this book can aspire to speak to both insiders and anyone else who is curious to understand the direction in which consumer society is evolving.
Online Fashion was being written in the midst of a global pandemic. How has the pandemic affected the fashion industry? Will it have a short-lived or longer-term impact?
The Covid-19 pandemic deprived us of offline experiences and forced us to temporarily transfer our lives online, migrating from the biosphere to infosphere. This book was written in a period of great suffering, profound changes and maximum uncertainty, when we were anxiously awaiting a return to the free flow of normal life.
In moments of discontinuity like this, humans tend to make the mistake of prefiguring and then trying to build the future with the categories of the past. This is a trap to be avoided: we cannot interpret the ‘new’ with only the mental categories of the ‘old’. The future is built on the past, not with the past.
That is why looking at digital change only as a burden, an obligation and a cost is wrong. This view leads people and organizations to resist rather than embrace the innovation and opportunities that digital offers. The quest for success cannot be limited to a reluctant adaptation to the context – it must be based on the search for what can be done to make an impact in that context, to do better by innovating, not to do the same by resisting.
What is needed is a profound change: in our interpretation of the reality surrounding us and that which we are constructing; of the operating models, including business and management models, that we want to implement; and of the strategies aimed at achieving these visions.
In short, we need to change our attitude and be open to designing innovation.
What are the trends that have been transforming the fashion industry in recent years?
In the first chapter of Onlife Fashion, we state that there are five driving forces influencing the future of fashion.
Acceleration is a necessary condition. Our world changes at the speed of an algorithm. In the fashion industry, the very concept of time has changed: past and future are compressed, crushed into an ‘instantaneous’ accelerated present.
Hybridization is the sum of our physical and digital presences, the evolution of the customer journey. It’s the blend of what happens ‘onland’ and online – what we have defined as ‘onlife’.
Disintermediation is about the changing dynamics of the industry. We have seen the reshaping of entire business supply chains over recent years, giving rise to new concentrations of power and creating the conditions for new
Sustainability is the idea that the company, whilst pursuing legitimate profit, must explicitly take into account a series of internal and external impacts that are inescapably connected to its activities – and assume responsibility for them.
The fifth driving force, democratization, is inherent to digital culture. Digital democracy makes knowledge accessible to all, through simplification and gamification.
The compass points used by managers in the fashion industry to guide strategic decisions in recent decades have been challenged, if not overturned, by these five forces.
What strategies should high-end players implement for the next ten years and beyond?
In this increasingly volatile world where change seems to be the only constant, we have created ten guiding principles which we hope will guide the decisions of those working within the field of high-end fashion in the coming years.
We urge maisons to be inclusive, a symphony, a vibration, timeless, inspired, relational, purposeful, a service, collaborative and antifragile. We think of it as a handbook of the new rules for a world that has been defined as ‘without rules’.
Do fashion players need to redesign their business models? What are the foundations for future success?
I believe that if a company does not change its business model within five years, in five years it will have no business model.
In a world that changes at the speed of an algorithm, that flows seamlessly between analogue and digital, between offline and online, and that we provocatively describe as without rules, it would be a serious mistake if we did not take responsibility for finding new interpretive keys to establish new rules.
We need to set aside that typically human characteristic of seeing the facts of the world from a selective perspective at a selective time.
What does the fashion industry tell us about how consumers’ expectations of brands more generally are changing? What lessons can other high-end/luxury businesses take from your insights on fashion?
The hybridization between physical and digital has primarily involved the younger generations, who have proven to be more naturally inclined to embrace the opportunities offered by digitalization. Now, however, this change involves progressively larger segments of the population, at least in the most economically advanced societies. In particular, during lockdown periods there has been a noticeable acceleration in the migration towards the use of online services. This has led the fashion sector to review the user experience of their sites and applications in order to better respond to the needs of a wave of novice customers with less digital literacy.
We are increasingly witnessing hybrid purchasing and consumption behaviours, in which people are browsing on their smartphones while visiting a physical store, or entrusting entire stages of the customer journey to digital, only to then pop into the store to try on a piece of clothing and check the quality of the fabric. This is the essence of the onlife hybrid, where digital and physical merge and fertilize each other.
On the supply side the situation is quite complex. Traditional companies have been struggling with digital transformation for over a decade, with all the complexities of having to initiate a cultural change even before a technological and operational change.
And of course they have the added pressure of facing a plethora of new digitally native players who do not have the same burden of having to update the skills of their employees, or reviewing their operating models, rethinking the supply chain, acquiring the latest technology, or even taking action to address the changing mindsets of their employees.
Ecommerce has spread over the last 25 years thanks to the initiative of companies such as Amazon and Ebay, followed progressively by countless others. Established companies first viewed ecommerce as a timid rival – nothing to worry about too much – then as a competitor to be monitored, because of its ability to erode market share; and then finally as a threat to take measures against.
Traditional companies have only fully grasped the scope of the phenomenon in its recent stage of maturity and are now struggling to seamlessly integrate it into their value chain, in order to align all the touch points around the needs of the end customer, under the banner of what is known as omnichannel.
What can we learn from fashion about how the role of marketing is evolving?
The role of marketing is fundamentally shifting, from ‘making people want things’ to ‘making things people want’.
Thanks to the availability of data and the exponential progress in computational power, the paradigm is finally changing, from pushing to pulling. Marketing is the most important function in this regard as it can provide the rest of the company with the most relevant insights, allowing it to create products, services and experiences that are aligned with the zeitgeist.
So today, the marketing task is to determine the needs, wants and interests of target markets and to achieve the desired results more effectively and efficiently than competitors, in a way that preserves or enhances the consumer’s or society’s well-being.
Ultimately, organizations need to start being more customer centric – to think about the customer journey and really focus on what the customer wants.
There needs to be a shift in companies’ attitudes, away from asking what they can make and sell, to asking what they can do for customers.
In recent years you’ve written powerfully about capitalism’s problems and the role of brand activism. How has that agenda been affected by the pandemic?
Brand activism has arisen as a result of societies being saddled with social problems and governments seeming unable to act.
Companies are now in a position to make a declaration that they want to take some social responsibility to advance the common good. The risk of doing nothing far outweighs the risk of standing up.
It means that companies now need to start focusing on additional priorities. They should no longer focus solely on their profits and shareholders: they should start to integrate sustainability, social and environmental factors into the very core of the company. One of the risks we face is that companies could go into survival mode as a result of the pandemic, where they stay still and will not invest, and these priorities become less relevant.
There has been widespread research suggesting that consumers’ values and priorities in life have been changing as a result of the disruption created by the pandemic, and the opportunity for greater reflection that it afforded many people. Do you agree that consumers’ priorities have changed? Will those changes be long-lasting?
Consumer’s values and priorities have absolutely changed due to the global pandemic and yes, these changes will be long-lasting.
Consumers and companies are redefining their priorities and revaluating the way they live, especially young people who are in ‘yolo’ – you only live once – mode. The agenda of institutions is also changing. Not all changes will be long-lasting, but hopefully we will take this opportunity to learn from our mistakes.
How do you see the role of marketers in the post-pandemic era? What would you say to those who think ‘Those are issues for business leadership, not for marketing’?
The role of the marketer in the post-pandemic era has changed hugely. It is no longer possible to build a competitive advantage based solely on logistics, production or product innovation. Instead, companies need to focus on understanding and anticipating customers’ needs and desires, exceeding expectations, and delivering a superior customer experience.
If we assume that the role of marketing is to understand the customer and inform the rest of the company about what products and services might be most successful, then marketing will almost coincide with the overall business strategy of companies and brands.