Innovation is one of things that fashion talks about, but never really explains.
What is it?
Newness in style counts, of course. And a new line of business counts too — Urban Outfitters Inc., for instance, has quietly developed a growth engine with its Nuuly rental operation. There’s also novel in-store presentation or a new feat of warehouse wizardry and so on.
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Not innovating, of course, is seen as bad to very bad — by Wall Street, by investors and beyond.
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John Donahoe is now Nike Inc.’s outgoing chief executive officer. Most pin his exit on the slowdown in the brand’s famed innovation engine, which led fiscal first-quarter revenues to drop 10 percent to $11.6 billion.
“A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation,” said Matthew Friend, chief financial officer in a statement this week, taking point on Wall Street until Elliott Hill steps in as CEO later this month.
Nike is not alone in trying to get its innovation mojo back.
VF Corp. is still working to recover from Vans’ innovation shortfall, which saw the business gain ground with its classic looks only to lose it again when the fashion trend moved on. Victoria’s Secret is also looking to connect again with a revamped fashion show.
Innovation is easy to talk about, but hard to master.
Ask Jony Ive, who designed the iPhone and a generation of sleek, world-changing technology while at Apple. He just recently stepped into fashion and when he talked to WWD, he talked about innovation.
Ive’s LoveFrom design company partnered with Moncler to make outerwear from high-quality recycled nylon with a new approach. For the project, Moncler had to find a loom to create fabric wide enough to cut a single piece that could then be folded into either a field jacket, a parka or a poncho.
“I honestly think lots of people would say innovation and trying to solve hard problems is virtuous,” Ive said. “Of course, it’s a good thing. But many people don’t have the fortitude and don’t have the commitment to do that, and my intuition turned out to be correct in that [Moncler CEO Remo Ruffini’s] commitment to supporting solving difficult problems was extraordinary.”
The result is a fresh look for Moncler and some buzz to boot.
But innovation takes something more than “fortitude” too.
Innovation doesn’t come from one idea, but from a corporate belief that it’s important to try new things. That and a company culture, thought process and approach to business that brings freshness front and center.
Martha Pease, brand transformation expert and former chief marketing officer at Victoria’s Secret, described innovation as “a higher order awareness that a company has of who their customer is, what their mission is in the world….Innovation is an expression of new ways of thinking about your business and your consumer.”
For Pease, a company’s vision for the future has to prioritize how it’s going to remain relevant to its customers.
“If that’s not the number-one focus of the vision, then how you execute won’t align with being relevant to your consumer,” she said. “If your vision is to expand the franchise of the brand, you will focus internally inside the business to look at where you think you’ve got functional technical things that you can do to expand the business model, but you won’t be expanding your relationship with consumers.
“And the value in a brand is in the relationship, not the product,” Pease said. “CEOs often lose sight of that. Leaders lose sight of that. And let’s also say that the emphasis and the priority of marketing and brand building and true relationship innovation is often missing in companies. It’s innovation. It’s a holistic system.”
It’s a system that Hill will soon be now responsible for at Nike.
Hill, 60, spent 32 years at the brand before retiring in 2020 as president of consumer and marketplace, leading all commercial and marketing operations for the Nike and Jordan brands.
He returns just as Nike claims it is making a turn.
As Friend told analysts on a conference call, “We are working to position new products in the path of the consumer, create scale for new ideas and drive more balanced marketplace growth….As we look to the spring season, contribution from newness and innovation will take a significant step forward with growth in footwear units of mid- to high-single digits versus the prior year. And over the coming seasons, we expect to see sequential gains and the percentage of newness and innovation as a mix of our total footwear business.”
Innovation isn’t just a fresh idea, but a process that encourages those new ideas, loves and nurtures them and helps them become a new reality.
And when Nike talking about innovation, in its products today and for tomorrow, it’s signaling that that process is waking back up.
The Bottom Line is a business analysis column written by Evan Clark, deputy managing editor, who has covered the fashion industry since 2000. It appears every other Thursday.