Fashion and Lifestyle businesses are including innovation inside their core business operation strategy. Today we share some knowledge about innovation, and how to integrate it into your brand or service.
You have probably heard about innovation, the buzzword inside all businesses and the service sector. If you are thinking of launching a brand or developing a business idea, we recommend you dig into innovation frameworks and theories, to get fresh ideas to rethink, and improve your business model.
Innovation is more than a fad; it fosters creative solutions and alternatives in a complex world. Business models should respond to three main dimensions of the company’s activities. Value creation, value capture, and value delivery are interconnected areas that can change a business model framework as value is perceived differently by the organization, the market context, and consumers.
According to economist David Teece, the business model defines how the company creates and delivers value to clients and then captures a portion of this value to make a profit and grow.
An innovation and economic history authority, Joseph Alois Schumpeter in The Theory of Economic Development defined innovation as “the commercial or industrial application of something new -a new product, process, or method of production; a new market or source of supply; a new form of commercial, business, or financial organization”.
The Oslo Manual, developed jointly by Eurostat and the Organization for Economic Co-operation and Development (OECD), is part of an initiative devoted to the measurement and interpretation of data, relating to science, technology, and innovation. According to The Oslo Manual, a crucial part of innovation is implementation; “new processes, marketing methods, or organizational methods are implemented when they are put into practice use in the firm’s operations”.
Types of Innovation and Today’s Innovation Context
Besides its implementation, industries worldwide are undergoing a paradigm shift due to the Internet of Things (IoT), pushing another industrial revolution where man and machines are co-working to develop human-user-centered products and services faster than ever.
The Industry 4.0 is characterized by a digitalization perspective with connected devices, Big Data and data analytics, electric vehicles, 3D printing, artificial intelligence (AI), all evolving to a new frontier.
The concept of this evolution in Industry 5.0, it is defined by authors Skobelev and Borovik in On the Way from Industry 4.0 to Industry 5.0: From Digital Manufacturing to a Digital Society. A new industry “characterized by digital smart society, the integration of virtual and physical spaces, IoT, robots, augmented reality, innovation ecosystems, brain-machine interface and human centrality of technology” that will rule future innovations and human-centered business models.
The Industry 5.0 perspective intersects human intelligence with cognitive computing systems for extreme personalization. The new idea should be technically feasible, financially viable, and marketable products that can create value. We cannot claim innovation if the process does not create real value for users or customers.
Integrating Innovation Frameworks to Improve Your Business Idea
We previously discussed the relevance of fostering innovation inside the business model aligned with the future perspectives. You can integrate some innovation frameworks to analyze the Unique Value Proposition (UVP) of your brand and detect if you are complying with innovation criteria.
Your type of innovation will depend on two main factors: the market and the used technology. If you focus on the market, you must determine if your innovation proposition creates a new market or address the existing one. If you decide to focus on technology, the criteria is the same; does your innovation use a new type of technology (or even create it)? Or does it use an existing technology?
The Ten Types of Innovation framework created by Doblin Consulting can be a diagnostic tool to identify your internal approach to innovation. This framework works to analyze competitive environments and research how your competitors deal with market changes and ongoing innovations. In addition, it can help you to foresee potential opportunities.
You can improve the configuration of the business system (profit model, network, structure, process); your offering (product performance, product system); the experience you deliver (by service, channel, brand, or customer engagement).
According to Fast Company, some 2021 brand innovation cases came from brands, such as Farfetch, Lulemon, Goodee, or Renewcell.
Some of the breakthroughs are: digitizing inventory to help thousands of brick-and-mortar stores to deliver service during a pandemic; establishing new ways of creating brand community through streaming fitness classes; selling worldwide-curated design through an e-marketplace for a social cause; fabricating new clothing materials based on discarded textiles replacing wood-based fibers at large scale.
Innovation can act as a catalyst to improve your business development, establish a balanced purpose, and unleash creativity.
Do you want to learn more about this topic? Find more in the Master in Fashion Marketing program.