Value Innovation and Demand Chain Management - keys to future success in the fashion industry

Abstract

Value innovation is a key in developing competitive advantage in most industries. Value innovation is both related to the physical products and accompanying value-adding services. Logistics has evolved from an order qualifier – that is a necessity – to an order winner. Increased focus on the consumer and co-creation with the consumer as a vital partner lead to alignments and rethinking of the channel structure. The supply chain evolves into a demand chain! Deeper knowledge about the why, how, and when of consumer buying behaviour is a main ingredient in demand chain thinking, and the starting point in designing and developing segmented demand chains in the fashion market. These chains are built on partnership and trust oriented relationships. The game of power is increasingly replaced by the game of trust. This is a necessity when the competition shifts from rivalry between companies to rivalry between chains. In this position paper we discuss visions of the fashion future, and how to develop innovative concepts that deliver added value to the consumer. The “old school” of distribution economy, and the concept of convenience, are the basic theoretical grounds, and we argue that innovations could be reached when investing in consumer insights and closer relationships in the demand chain.