{"id":4095,"date":"2019-03-26T12:01:28","date_gmt":"2019-03-26T06:31:28","guid":{"rendered":"https:\/\/www.vue.ai\/blog\/?p=4095"},"modified":"2024-04-30T10:08:46","modified_gmt":"2024-04-30T04:38:46","slug":"self-disrupting-their-way-into-innovation-how-brands-are-resuscitating-loyalty","status":"publish","type":"post","link":"https:\/\/www.vue.ai\/blog\/leaders-in-retail\/self-disrupting-their-way-into-innovation-how-brands-are-resuscitating-loyalty\/","title":{"rendered":"Self Disrupting Their Way Into Innovation: How Brands Are Resuscitating Loyalty"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-transparent ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a37217478332\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a37217478332\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.vue.ai\/blog\/leaders-in-retail\/self-disrupting-their-way-into-innovation-how-brands-are-resuscitating-loyalty\/#self-disrupt-or-get-disrupted\" title=\"Self Disrupt or Get Disrupted\">Self Disrupt or Get Disrupted<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.vue.ai\/blog\/leaders-in-retail\/self-disrupting-their-way-into-innovation-how-brands-are-resuscitating-loyalty\/#legacy-vs-challenger-in-fashion-retail\" title=\"Legacy vs. Challenger in Fashion Retail\">Legacy vs. Challenger in Fashion Retail<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.vue.ai\/blog\/leaders-in-retail\/self-disrupting-their-way-into-innovation-how-brands-are-resuscitating-loyalty\/#what-makes-a-brand-a-%e2%80%98challenger\" title=\"What Makes a Brand a \u2018Challenger\u2019?\">What Makes a Brand a \u2018Challenger\u2019?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.vue.ai\/blog\/leaders-in-retail\/self-disrupting-their-way-into-innovation-how-brands-are-resuscitating-loyalty\/#preserving-brand-and-embracing-the-power-of-newness\" title=\"Preserving Brand and Embracing the Power of Newness\">Preserving Brand and Embracing the Power of Newness<\/a><\/li><\/ul><\/nav><\/div>\n<span class=\"rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\">6<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p><span style=\"font-weight: 400;\">Blockbuster, the US-based movie rental service provider was at its peak in 2004. They had over 9,000 stores across the world, with 4,500+ in the US alone. But a short-sighted decision taken in the year 2000 eventually led to its bankruptcy in 2010.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Back in 2000, online video streaming company Netflix\u2019s founder Reed Hastings had approached Blockbuster\u2019s CEO John Antioco with a business proposal in hand. The crux of the deal was \u2013 Blockbuster should buy Netflix for US $50 million and promote it in its stores. And, Netflix would build and manage Blockbuster\u2019s online arm. Antioco rejected the offer because he <\/span><a href=\"https:\/\/variety.com\/2013\/biz\/news\/epic-fail-how-blockbuster-could-have-owned-netflix-1200823443\/\"><span style=\"font-weight: 400;\">considered<\/span><\/a><span style=\"font-weight: 400;\"> Netflix \u2018a very small niche business\u2019 which is \u2018losing money\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Blockbuster ceased its operations in 2013 (<\/span><a href=\"https:\/\/twitter.com\/TIME\/status\/1103480419020877827?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1103480419020877827&amp;ref_url=https%3A%2F%2Fnews.theceomagazine.com%2Fnews%2Fblockbuster-last-store-worldwide%2F\"><span style=\"font-weight: 400;\">except one store in Oregon<\/span><\/a><span style=\"font-weight: 400;\">) and Netflix has made its presence felt in 192 countries. <\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"self-disrupt-or-get-disrupted\"><\/span><b>Self Disrupt or Get Disrupted<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Blockbuster\u2019s journey to bankruptcy from its peak or Netflix\u2019s path to digital dominance wasn\u2019t a straight one. It <\/span><a href=\"https:\/\/www.forbes.com\/sites\/gregsatell\/2014\/09\/05\/a-look-back-at-why-blockbuster-really-failed-and-why-it-didnt-have-to\/#1cb843001d64\"><span style=\"font-weight: 400;\">wasn\u2019t as simple<\/span><\/a><span style=\"font-weight: 400;\"> as one company\u2019s failure to predict the future of online streaming and another\u2019s ability to bank on that. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">It really was about the ability to self disrupt at the right time and stick by it. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Netflix started as a service that delivered DVDs via postal service to people who wanted to rent it. Despite steady growth and popularity, the losses kept swelling up, which is what compelled the company to approach Blockbuster. After that attempt failed, Netflix decided to disrupt its business model by introducing \u2018video on demand\u2019 and invested in developing video recommendation algorithms, around 2006-2007.<\/span><\/p>\n<figure id=\"attachment_4096\" aria-describedby=\"caption-attachment-4096\" style=\"width: 1000px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-4096 size-full\" src=\"https:\/\/www.vue.ai\/blog\/wp-content\/uploads\/2019\/03\/shutterstock_648266626.jpg\" alt=\"Netflix\" width=\"1000\" height=\"667\" srcset=\"https:\/\/www.vue.ai\/blog\/wp-content\/uploads\/2019\/03\/shutterstock_648266626.jpg 1000w, https:\/\/www.vue.ai\/blog\/wp-content\/uploads\/2019\/03\/shutterstock_648266626-300x200.jpg 300w, https:\/\/www.vue.ai\/blog\/wp-content\/uploads\/2019\/03\/shutterstock_648266626-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-4096\" class=\"wp-caption-text\">Netflix<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">On the other hand, when Antioco identified Netflix as a threat and proposed to make changes like launching Blockbuster Online and getting rid of \u2018late fees\u2019, one of the board members reasoned that the $400 million needed to make these changes would affect the company\u2019s profitability. Antioco was later fired but the rest of the board members couldn\u2019t stop the company from getting bankrupt. Things might have been different if the board had agreed to disrupt its existing business model and embrace the new changes. <\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"legacy-vs-challenger-in-fashion-retail\"><\/span><b>Legacy vs. Challenger in Fashion Retail<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Disruptive innovation has always been part of tech-centric industries. Be it Amazon, Uber or Apple, each of these companies have been fearless when it comes to facing changes and hitting the reset button before their competitors do it. But with the growth of digital technology, evolving demands of new-age consumers and growing reach of social media, it is slowing spreading to other industries like the fashion and beauty industry. This is primarily because in this day and age every company is either a tech-company or a tech-enabled one. \u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to The Business of Fashion and McKinsey &amp; Company\u2019s analytical report \u2018<\/span><a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Industries\/Retail\/Our%20Insights\/The%20State%20of%20Fashion%202019%20A%20year%20of%20awakening\/The-State-of-Fashion-2019-final.ashx\"><span style=\"font-weight: 400;\">The State of Fashion 2019\u2019<\/span><\/a><span style=\"font-weight: 400;\">, self-disruption is emerging as one of the top trends of this year. The report pointed out that social media has created a level playing field for all \u2013 decades-old luxury \u2018established brands\u2019 as well as up-and-coming \u2018challenger brands\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The years of competitive lead accumulated by established brands doesn\u2019t necessarily have the strength and ability to inspire brand loyalty because the rules of brand engagement have changed. The new crop of consumers wants something distinct to stand out from the crowd. By newness, we don\u2019t only mean designs and aesthetics but brand value and culture as well. Gen Z favour challenger brands like Reformation, Warby Parker, <\/span><a href=\"https:\/\/www.vue.ai\/blog\/trends-and-analysis\/how-the-nerdy-sneakers-climbed-its-way-up-to-high-fashion\/\"><span style=\"font-weight: 400;\">Kith<\/span><\/a><span style=\"font-weight: 400;\">, and Everlane over Prada, Gucci and Zara as they are easily accessible on social media, constantly adapt to new technology (and shed the old one), come minus the heavy price tags and are vocal in their opinions without being politically correct. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">The BoF-McKinsey report explained this with its findings about social media growth of established brands as compared to challenger brands. It <\/span><a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Industries\/Retail\/Our%20Insights\/The%20State%20of%20Fashion%202019%20A%20year%20of%20awakening\/The-State-of-Fashion-2019-final.ashx\"><span style=\"font-weight: 400;\">stated<\/span><\/a><span style=\"font-weight: 400;\">, \u201cIf performance were measured by social media growth alone, the big incumbent fashion players would already be in trouble. Brands such as H&amp;M, Dior and Zara grew their Instagram fan base by less than 30 percent in the year to September. Many disruptors saw their Instagram following expand by more than 130 percent over the same period, and some by more than 300 percent.\u201d<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"what-makes-a-brand-a-%e2%80%98challenger\"><\/span><b>What Makes a Brand a \u2018Challenger\u2019?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">When we look at companies that are called \u2018challengers\u2019, the common thread running between all of them is that they have a very clearly defined goal that might not appeal to everyone. They tirelessly work towards achieving that goal and design their brand ethos centred on that objective. When compared to the revenue figures of retail giants and established brands, these goals might not look profitable. But new-age consumers recognize the contribution of challengers in building a modern, inclusive and thriving society and hence, these brands are able to disrupt the market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For clothing retailer Everlane, it is <\/span><a href=\"https:\/\/www.everlane.com\/about\"><span style=\"font-weight: 400;\">\u2018radical transparency\u2019<\/span><\/a><span style=\"font-weight: 400;\">. They only partner with ethical factories that guarantee fair wages, sensible hours and conducive work environment. \u00a0The company believes in sourcing best-quality materials and are transparent about the cost of manufacturing, be it material cost, labour, and transport.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Warby Parker too started with a single objective \u2013 offer designer eyewear at affordable prices. Rihanna\u2019s Fenty Beauty stands for beauty inclusivity by offering 40 foundation shades. Challengers embrace disruptive innovation by identifying their niche, optimum use of technology, boldly communicating their beliefs, confronting the current mindsets and never backing down. <\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"preserving-brand-and-embracing-the-power-of-newness\"><\/span><b>Preserving Brand and Embracing the Power of Newness<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">As it isn\u2019t practical for established retail brands to change their brand identity and associate themselves with business models that challenger brands\u2019 follow, they have found a way to follow the self-disruption path without diluting their brand value. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Many big labels have started unveiling more than two <\/span><a href=\"https:\/\/www.vue.ai\/blog\/trends-and-analysis\/building-seasonal-wardrobes-fashion-rules-for-different-seasons\/\"><span style=\"font-weight: 400;\">seasonal collections<\/span><\/a><span style=\"font-weight: 400;\">. Besides the usual Spring\/Summer and Fall\/Winter, the fashion world is also invited to Resort Wear Collection, Pre-Spring, Pre-Fall, Cruise Collection and similar themes. This trend gained traction to meet the demands of globally aware consumers that travel frequently and need \u2018season-less wardrobe\u2019. The growing popularity of street-wear and minimalism also fuelled the demand for affordable luxury that has timeless appeal. While we get to see designers showcasing avant-garde dramatic pieces of clothing during spring\/summer and fall\/winter shows, the \u2018pre shows\u2019 feature wearable pieces that are most in-demand.<\/span><\/p>\n<figure style=\"width: 2732px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.vogue.com\/photos\/5c3efcbb63f8482d552fbf7e\/master\/pass\/00013-Victoria-Beckham-London-Pre-Fall-19.jpg\" alt=\"traditional brands\" width=\"2732\" height=\"4098\" \/><figcaption class=\"wp-caption-text\">Source: Vogue<\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">London-based designer Martine Rose\u2019s Spring\/Summer 2019 collection <\/span><a href=\"https:\/\/hypebeast.com\/2019\/3\/napapijri-martine-rose-spring-summer-2019-lookbook\"><span style=\"font-weight: 400;\">NAPA<\/span><\/a><span style=\"font-weight: 400;\"> featured season-less pieces. <\/span><a href=\"https:\/\/www.vogue.com\/fashion-shows\/pre-fall-2019\/victoria-beckham\"><span style=\"font-weight: 400;\">Victoria Beckham\u2019s Pre-Fall 2019<\/span><\/a><span style=\"font-weight: 400;\"> collection was simple, sharp, unpretentious and practical. Vogue <\/span><a href=\"https:\/\/www.vogue.com\/fashion-shows\/pre-fall-2019\/gucci#coverage\"><span style=\"font-weight: 400;\">described<\/span><\/a><span style=\"font-weight: 400;\"> Gucci\u2019s Pre-Fall collection as \u2018presented without the fanfare\u2026 a rather straightforward affair\u2019.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Luxury brands like Louis Vuitton, Balenciaga, Gucci and Yves Saint Laurent are catering to millennials and Gen Z by hiring designers that bring a fresh perspective. Balenciaga hired Georgian designer <\/span><a href=\"https:\/\/www.highsnobiety.com\/p\/balenciaga-fw18-demna-gvasalia\/\"><span style=\"font-weight: 400;\">Demna Gvasalia<\/span><\/a><span style=\"font-weight: 400;\">, who is known for designing minimalistic, contemporary clothing minus any gimmicks. Alessandro Michele made <\/span><a href=\"https:\/\/www.businessinsider.in\/Millennials-and-teens-are-making-Gucci-cool-again-heres-how-the-brand-nearly-doubled-its-sales-in-2018\/articleshow\/67084598.cms\"><span style=\"font-weight: 400;\">Gucci cool again<\/span><\/a><span style=\"font-weight: 400;\"> with pop culture references. <\/span><a href=\"https:\/\/www.highsnobiety.com\/2016\/04\/01\/how-hedi-slimane-changed-saint-laurent\/\"><span style=\"font-weight: 400;\">Hedi Slimane<\/span><\/a><span style=\"font-weight: 400;\"> modernized the traditional Yves Saint Laurent and doubled its revenue after he was hired as the creative director in 2012. And Louis Vuitton infused luxury street-wear into their brand by hiring the current hot favourite designer and founder of label Off-White, <\/span><a href=\"https:\/\/eu.louisvuitton.com\/eng-e1\/la-maison\/virgil-abloh\"><span style=\"font-weight: 400;\">Virgil Abloh.<\/span><\/a><\/p>\n<p><span style=\"font-weight: 400;\">This is a huge step for luxury labels that used to scoff at street-wear a couple of decades back. \u201cLuxury brands would look so far down on this 20 years ago. Now today, the people who shop at Chanel on Rodeo Drive feel just as validated in an Off-White long sleeve. There\u2019s no more division between luxury and streetwear,\u201d <\/span><a href=\"https:\/\/digiday.com\/marketing\/streetwear-infiltrated-luxury-fashion\/\"><span style=\"font-weight: 400;\">asserted<\/span><\/a><span style=\"font-weight: 400;\"> street-wear reservation app Copdate\u2019s CEO Andrew Raisman.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Other established brands are investing in disruptive innovation by backing incubator programs (<\/span><a href=\"https:\/\/www.plugandplaytechcenter.com\/Kering-plugandplay\/\"><span style=\"font-weight: 400;\">Kering<\/span><\/a><span style=\"font-weight: 400;\"> Sustainable Innovation Award in association with Plug and Play) and through mergers &amp; acquisitions. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">By hiring the right talent, acquiring companies, and diversifying portfolio, established brands are able to self-disrupt in a controlled environment and protect their legacy. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Self disruption doesn\u2019t only apply to established and traditional brands. \u00a0It applies to digital-first and online-only brands as well. While most conversation about this trend focus on how the old companies need to adapt to the new changes or perish, sometimes the new brands too have to introspect and find solutions in the old methods. For instance, retail industry\u2019s \u2018<\/span><a href=\"https:\/\/www.vue.ai\/blog\/trends-and-analysis\/the-curious-case-of-halo-effect-in-retail\/\"><span style=\"font-weight: 400;\">Halo Effect\u2019<\/span><\/a><span style=\"font-weight: 400;\"> highlights the positive impact of opening experience stores on online businesses. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">This emerging trend is really about listening to what consumers want and using (or acquiring) the available tools &amp; resources to meet that demand. The tools could be foresightedness, fresh voices, growth mindset, social media or the latest artificial intelligence technology, whatever it takes to disrupt strategies that aren\u2019t aligned with customers and assist in staying relevant in a changing world.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\">6<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span> Blockbuster, the US-based movie rental service provider was at its peak in 2004. They had over 9,000 stores across the world, with 4,500+ in the US alone. But a short-sighted decision taken in the year 2000 eventually led to its bankruptcy in 2010. Back in 2000, online video streaming company Netflix\u2019s founder Reed Hastings had  &#8230;<\/p>\n","protected":false},"author":23,"featured_media":4097,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1160,1522],"tags":[251,106,23],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Self Disrupting Their Way Into Innovation: How Brands Are Resuscitating Loyalty | Vue.ai Blog<\/title>\n<meta name=\"description\" content=\"Exploring how brands navigate the shift in consumer loyalty through self-disruption and innovation. 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