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My Industry Got Hacked. Yours is Next

Hackers solve problems, and occasionally create them, by identifying weaknesses in long-established systems. They have successfully disrupted industries, from retail and music to transportation and publishing.  Even the residential garbage pick-up business is being hacked.

Sean Parker*, the poster child for Hackers, recently wrote a great article, "Philanthropy for Hackers" for the Wall Street Journal.  He got me thinking.

By definition, hacking is disruptive to companies and industries: So are wildfires to forests and ice-ages to dinosaurs.  By eradicating old growth, disruption promotes new growth in its place.

My industry, that of fashion products sold through retail channels of distribution, has been hacked. I would like to put some flesh on those bones.

Here is a partial list of "hacks" to my industry. These disruptions have been driven by technology, data, radical business models, and exploitation of vulnerabilities in the value chain. These disruptions have caused giants to fall and have created new market leaders.

Ecommerce and omnichannel retail sales. In my industry, nearly 10% of all purchases are now made online, rather than in-store. Apparel & accessories online sales continue to capture an increasingly greater share of total retail sales.

Channels defy traditional definitions: Off-Price retailers create omnichannel presence (see Marshall's, Ross Stores and Burlington Coat Factory's new ecommerce sites); while "Full-Price" retailers open off-price stores and shops (see Kohl's "off-aisle" and Macy's "backstage").

Manufacturers selling directly to consumers:  Alibaba and Etsy are two highly visible examples.  Alibaba has a $204 Billion market cap, as of last week.  That's $200,000,000,000.  No middlemen, disintermediation, disruptive indeed.

Wearable TechnologyTory Burch + FitBitLevi's + Google, and the "Ralph Lauren Polo Tech" shirt that features sensors knitted into the core of the product to read biological and physiological information. 

Same-day delivery. Next-day delivery is so last year.  In my Manhattan neighborhood Amazon Prime Now offers "one hour" delivery on "thousands" of items. 

Mass-customizationNikeID is only one great example of the convergence of technology, data, and supply-chain to create a new deliverable. You might consider this an "old" deliverable, product made to a custom specification, until you realize that this is "mass" customization at play. 

3-D printing.  This technology affects not only rapid-prototyping, and therefor speed-to-market, but also mass-customization and same-day delivery. Shapeways, and other 3rd Party providers, allow any designer to 3-D print their apparel and accessories, on demand.  And, the Design Studio  Nervous System has created "a novel process that allows a 3-D printed dress to move and sway like real fabric. The bespoke software behind it, called Kinematics, combines origami techniques with novel approaches to 3-D printing, pushing the technology’s limits." - Wired  

Solving the problem of fit: "TrueFit, which works with Macy’s and Nordstrom, leverage algorithmic solutions to analyze fit data and recommend which size. Metail and, have developed digital fitting rooms that use virtual mannequins to mimic a shopper’s dimensions and display what a certain garment might look like when worn. - BOF

Shopping avatars and assistants: Personal shoppers, virtual avatars, body image, persuasion... just a taste of things to come. Trunk Club meets Google meets Siri. Fitle will let you save clothes in your “virtual closet” and then try them on your avatar when looking for a new piece. Basically if you buy a shirt from H&M, you can try it on with a pair of Levi’s next month. 

This... is only the tip of the iceberg.  You can be an ice-breaking hacker, or you can re-arrange deck chairs on the Titanic.  

7 Ways to Think and Act Like a Hacker.  Before It's Too Late.

  1. Challenge the status quo.
  2. Look at your company, industry and business model with brutal honesty, warts and all.
  3. Share information, instead of protecting it.
  4. Find weakness and vulnerabilities and, rather than building moats around them, tear them down.
  5. Seek out and embrace technology and impactful innovation.
  6. Information is your friend; seek out big data and use it.
  7. Think big... beyond your walls, beyond your current model, beyond your current market.
Hack or be hacked.

(c) 2015, David J. Katz - New York City

*Sean Parker co-founded Napster at 19 years old and was the "founding" president of Facebook. Napster has been called the fastest growing business of all time. Depending on your point of view Napster either reinvented, or destroyed, the music industry. He's probably looking at your industry right now.

This article was originally published on LinkedIn.

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