Levi's jeans denim technology

Increasingly inspired by Silicon Valley, many of the world’s most recognizable apparel and beauty brands are trying to make tech’s “fail fast” and “fly by the seat of your pants” approach work for them.

Historically, fashion and beauty have been more like frenemies with big tech than collaborators. But that’s changing swiftly in a commercial market that’s being reordered by e-commerce, data and Amazon. To adjust, fashion companies are taking on the hallmarks of the technology industry, including “agile” workflows, incubators and tech acquisitions. Levi Strauss & Co., Gap, L’Oréal, Nordstrom and others are trying harder to transform themselves into innovation hubs.

“The approach we’ve taken, particularly over the last year and a half, is much more of an agile test-and-learn approach to our roadmap and to our development of solutions and experiences,” said Sebastian DiGrande, Gap Inc.’s executive vice president of strategy, in an interview with WWD.

DiGrande is a Silicon Valley executive with a degree in electrical engineering, a stint at a telecom under his belt and experience consulting for the consumer electronics industry. His experience with agile, a popular software-development workflow that breaks linear processes, informs his team at Gap Inc., which works on different phases of a project at the same time.

“So we are running simultaneous tasks,” DiGrande said. “We built the testing infrastructure, and we’re running simultaneous proofs of concepts and tests in stores online across a number of different types of experiences and solutions.”

The goal, beyond test and learn: Fail fast, a classic mantra in the Valley.

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A view from Gap Inc.’s San Francisco headquarters.  Courtesy photo

But the move to a tech footing is a profound change from business as usual in apparel, especially for long-standing companies that often take a wait-and-see approach to new tools. For operations that have years, perhaps decades, of tradition defining their brand, latching onto new platforms isn’t easy. And yet, some of the household names that have thrived for generations are now reaching for the future with both hands.

They don’t see technology as optional anymore, especially with Amazon flexing its tech muscle across logistics, electronics, artificial intelligence and more, raking in over $50 billion in revenues in the first quarter alone. The e-commerce company is becoming more obsessed with fashion, and now it’s honing its focus and significant resources to lay a bigger claim on the sector.

What Amazon already gets and others are learning is that technology is merely a tool, and it’s the thinking behind it that really matters. Experts interviewed by WWD said organizations that breed a culture of innovation are the ones best positioned to succeed.

Put another way, companies that treat tech adoption like a chore are doing it wrong.

Not that it’s easy to embrace. Prioritizing technology can require big changes in thinking and tough decisions on when to move quickly and where to spend, not to mention convincing investors that new approaches will pan out. But the big benefits at stake might well make it all worthwhile.

Ultimately, better tools lead to better customer experiences, which should be the goal of all retailers and brands, particularly in apparel and beauty. What people wear, as outward expressions of who they are — or want to be — are intimate choices, and so consumers crave positive interactions as they refresh their wardrobes. That can come from many areas. Better back end processes can free up resources to explore new programs, and chat bots can help customers with basic tasks more efficiently.

Take the jeans business. Gap’s innovation team constantly evaluates new technologies, partners and start-ups. And just a few doors down from AutoDesk’s creative and technical workspace in San Francisco — where fashion designers, footwear companies, tech groups and others come to try out new concepts and materials — Levi Strauss & Co. runs an experimental workshop called the Eureka Innovation Lab.

levi's jeans eureka lab tech

Levi’s Eureka Innovation Lab created digital design tools that can place rips and wrinkles with precision and at scale.  Adriana Lee

The lab might be best known for its Commuter Trucker Jacket, a smart notifications garment powered by Google’s technology, but its latest efforts birthed a new digital workflow, with a laser-finishing process that’s faster and more eco-friendly than hand-finishing. The new program marks a radical departure from the way the jeanswear company has handled denim for years.

Both Gap and Levi’s have the benefit of being based in the white-hot center of technology in the Bay Area. But proximity to Silicon Valley isn’t a necessity, and they are not the only ones getting into the game.

L’Oréal, whose sprawling beauty empire is based in Paris, recently made its first tech acquisition, acquiring Toronto-based augmented reality company Modiface. The beauty brand has been dabbling in AR tech for hair and makeup try-on via partnerships, including one with Modiface, before it bought the company in March.

Earlier that month, Jennifer Tidy, Modiface’s senior vice president of partnerships, said at South By Southwest that “having this technology is almost expected now.” She discussed the company’s partnership with Samsung — which was its biggest news at the time.

“For them to put it right into the [Galaxy S9’s] camera, it’s instantaneous,” she said of Samsung. “You already have it. It’s on your phone. There’s no extra bells or whistles required, and it’s a place where multiple brands can be.”

Modiface works with a variety of partners, such as Estée Lauder and Sephora, and despite having a new owner, it promised that this won’t change. However, over time both L’Oréal and Modiface might discover that post-acquisition, old relationships and alliances can get rather sticky.

For L’Oréal, the tech buy is new territory, but that doesn’t mean technological innovation is a foreign concept. The beauty giant has a dedicated technology Incubator that has spawned a variety of projects, from UV skin detection products to custom hardware capable of mixing individualized skin-care serums and foundations.

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Guive Balooch of L’Oréal’s Technology Incubator.  Adriana Lee

Guive Balooch, the incubator’s global vice president, shared his insights from five years running the group: “I’ve learned so much and had a lot of successes — and a lot of test-and-learn situations, where things didn’t go the way that we thought.” For the record, Balooch does not consider L’Oréal a tech company, and he stated unequivocally that it will never be. However, “now I feel that we, as an organization, understand more about where technology can bring value. That would never have happened, if we were a traditional team that was only thinking about product launches and waiting [to adopt tech].

“No, it has to start — it had to have started yesterday to make it for tomorrow,” he added.

New-era brands such as NYX and Glossier already know this, as they explore virtual reality concepts and new ways to extend their social media virtuosity. Health and cosmeceuticals giant Johnson & Johnson sustains a specialized innovation group called JLABS and Quickfire Challenges, its own version of tech’s hackathons.

Department stores and designers have gotten the memo as well. Macy’s and Nordstrom are racing to innovate, with the latter going deeper into tech by recently buying digital start-ups BevyUp and MessageYes.

Designers, at least some of them, are known to have a techie side.

Diane von Furstenberg, for instance, has a long-standing fascination with technology. She was an early booster of Google Glass, introducing the tech at her runway show, wearing it in promo videos and releasing designer frames for the face gadget. Her company regularly tests tools and platforms for augmented reality, virtual reality, customization and other initiatives.

For the past year, DVF has been testing interactive e-mails with partner Rebelmail, which provides something like an e-mail equivalent of mini webpages. “We’ve basically taken that browser experience that happens on a site and moved it to the inbox,” said Manisha Shah, vice president of customer success at Rebelmail. The messages can feature product previews, styling advice, shopping cart features and even the ability to handle transactions. No web site visit is necessary.

The results have been impressive, added Felipe Araujo, DVF’s senior director of e-commerce. His team recently a/b tested Rebelmail’s messages against a control group and discovered that the souped-up e-mails actually garnered a 72 percent higher average value.

Such tests are a regular part of the job for Araujo and his team, a small cross-functional group that explores new technologies. “Before we were living in a retail world, and the digital was fitting into it,” he said. “Now we’re living in a digital world, where stores are a part of it as well.” When asked about his company’s approach to tech, Araujo said the fashion house has a particular advantage: It’s a family-run business, which means it can be nimble and act responsively, like many tech start-ups.

The competitive dynamic of the marketplace seems to be moving in two directions, covering large brands that have found religion on digital and big data, as well as new players that have technology baked into their DNA.

stitch fix data scientist fashion apparel

In Stitch Fix’s San Francisco’s headquarters, fashion designers and merchandisers regularly collaborate with data scientists.  Adriana Lee

At Stitch Fix, the signs are evident in the start-up’s culture: “We have data scientists in the same room as fashion designers,” said Eric Colson, chief algorithms officer. “It’s interesting — [this is] a special place that can accommodate a wide spectrum of people. We have Ph.D. mathematicians who work here and fashion designers, stylists, merchandisers…all these people come together to solve a common problem.” Some of those technologists hail from the buzziest tech companies in the Valley.

Newer contenders like Stitch Fix, which announced revenue of $296 million in its latest quarterly report and has a current market cap nearing $2.2 billion, have plenty of funds to scoop up the right talent and tools to succeed. But there’s one thing older brands have that the new players cannot replicate — history.

In digital terms, that means customer data. A lot of it.

Companies that have served millions of people for many years have a wealth of data, and the information can feed everything from online fitting services to artificial intelligence for product suggestions and more. They also tend to have the resources to compile and crunch that data.

“We benefit from the fact that many of our customers have shopped with us multiple times over many years,” said Gap Inc.’s DiGrande. “If we can look at the data alone from what they’ve kept, what they’ve returned — in any of the feedback they’ve given us — we’ve already moved the ball forward dramatically on understanding how to optimize fit. And we’re starting to leverage a lot of that data, applying machine learning tools, and then applying additional technologies on top, like augmented reality and 3-D modeling tools.”

The savviest of the established brands know the value of their data and are already working to tap into it. The question is, who will be able to grow their tech-savvy fast enough to turn it into real strategy. Amazon has plenty of its own data and is rapidly refining its approach to fashion.

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