1. An Investigation into How Technology is Disrupting Luxury Brands by Creating a Competitive
Advantage
Alice Ferris Orange
Submitted to Master of Business and Management, School of Business
University of Dublin, Trinity College
July 2016

2. i
Declaration
I declare that this thesis has not been submitted as an exercise for a degree at this stage or any
other University and that it is entirely my own work.
I agree to deposit this thesis in the University’s open access repository or allow the Library to
do so on my behalf, subject to Irish Copyright Legislation and Trinity College Library
conditions of use and acknowledgment.
Alice F. Orange
2016

3. ii
Abstract
This research project examines the effect that technology is having in disrupting the high brand
fashion world. The purpose for conducting the research was to achieve a more in depth
understanding of the interaction between technology, innovation and marketing in creating a
competitive advantage for luxury brands. The study was guided by the following two research
questions: How is digital disruption/technology influencing the evolution of the luxury brand
fashion industry. How are advances in digital technology offering new forms of competitive
advantage? An exploratory framework of technology was adopted and presented. The findings
showed that technology is disrupting the fashion industry and for many brands creating a
competitive advantage. However, this finding was not applicable across all brands with some
brands conducting a more traditional approach. Nevertheless, findings showed that the
traditional approach is becoming vastly outdated and may soon be unsustainable.

4. iii
Acknowledgments
This research is not only a reflection of the authors work, as it would not have been possible without the
contribution of the manyothers who were involved. First and foremost, it is with immense gratitude that
I acknowledge the support and invaluable guidance of Dr. Brian Massey. His confidence in my ability
throughout this research was an overwhelming comfort to me during the entire process of this thesis.
Secondly, Iwould like to thank myparents, James andElizabeth for their unconditional love and support
in everything I do.
Finally, I would like to thank Anne for the love and support she has given me not only during
the process of this thesis but the last 22 years of my life.

5. iv
Table of Contents
Chapter 1: Introduction .......................................................................................................................1
1.1 Introduction:................................................................................................................................1
1.2 Industry Evolution......................................................................................................................1
1.3 Conclusion:..................................................................................................................................3
Chapter 2: Literature Review..............................................................................................................4
2.1 Introduction.................................................................................................................................4
2.2 Disruptive Innovation.................................................................................................................4
2.3 Digital Marketing........................................................................................................................7
2.4 Innovation....................................................................................................................................9
2.4.1 Competitive Advantage: Value Innovation .....................................................................10
2.5 Customer Co-created Knowledge............................................................................................11
2.6 Business Model..........................................................................................................................12
2.7 IT in the retail industry ............................................................................................................14
2.8 Exploratory Framework & Summary:...................................................................................15
Chapter 3: Methodology.....................................................................................................................17
3.1 Research Onion.........................................................................................................................17
3.2 Research Philosophy.................................................................................................................17
3.3 Research Approach...................................................................................................................18
3.4 Research Method ......................................................................................................................19
3.5 Research Strategies...................................................................................................................19
3.6 Time Horizon.............................................................................................................................20
3.7 Data Collection..........................................................................................................................20
3.8 Data Analysing ..........................................................................................................................22
Chapter 4: Findings............................................................................................................................23
4.1 Introduction...............................................................................................................................23
4.2 Interview Findings ....................................................................................................................23
4.2.1 Interviewee 1: Shannon Jennings .....................................................................................23
4.2.2 Interviewee 2: David Woolfson.........................................................................................27
4.2.3 Interviewee 3: Jill McGinn................................................................................................30
4.3 Conclusions:...............................................................................................................................32
Chapter 5: Discussion and Conclusions............................................................................................33
5.1 Data Analysis.............................................................................................................................33
5.2 Implications ...............................................................................................................................41

6. v
5.3 Limitations.................................................................................................................................41
5.4 Future Research........................................................................................................................42
Bibliography:.......................................................................................................................................43

7. 1
Chapter 1: Introduction
1.1 Introduction:
This chapter provides the reader with a brief overview of the literature surrounding the
evolution of technology within the fashion industry. The different area of business which are
most affected by technology are discussed. This chapter guides the reader into the literature
review provided in chapter 2.
1.2 Industry Evolution
Fashion has always been a tough industry to grasp hold of or predict because it is an
environment of continuous change, pace and unpredictability, technology has simply enhanced
these factors further. Technology ‘is as much an architect of our passions and preferences as
it is about our solitudes’ (Turle, 2008:29). The evolution of technology first took place during
the 1960’s and 1970’s, which saw the shift from manual and paper activities to technology
systems. This was followed by the invasion of the internet in the 1980’ and 1990’s (Porter,
2001). The final and current wave of technology was in the last 10 years where technology has
become an integrated part of the product itself. Porter (2014) claims that people have
oversimplified the ability of the internet by saying it ‘changes everything’, he proclaims that it
opens up a whole new range of technological possibilities, the rules of competition and
competitive advantages. The digital era has been described by Sambamurthy and Zmud
(2000:851) as:
“The contemporary digital economy is characterized first and foremost by convergence across
the computing, communication, and content industry. This convergence presents unparalleled
business opportunities for redefining the nature of customer relationships, products and
services, business partnerships, and economic markets within and outside the enterprise.”
Fashion has never been merely transactional, therefore the impact of technology on the
industry greatly exceeds beyond-market terms. The virtual, material and performative aspects
of the fashion industry become more important than size or weight of the industry as consumers
and producers are given greater opportunities to explore and practice fashion through digital
technologies. The endless number of media platforms has meant that customers now have a
high level of technological competence and managers have lost their voice as authors of brand
stories (Kuksov, Shachar, and Wang, 2013). A brand is invaluable to an organisation in the
fashion industry. Retailers create brand stories to enhance the consumer’s knowledge of the
brand (Gensler et al., 2013). This means the future of fashion must be digitally implemented

8. 2
into people’s lives. One of the biggest changes as a result of technology within the luxury
brand industry is the ‘remediating’ and‘re-fashioning’ forms of signification previously used
such as magazines (Boulter and Grusin, 1999 ; Jenkins, 2006). “The internet has opened up
new spaces of consumption that are unprecedented in their levels of ubiquity, immersion,
fluidity, and interactivity” (Currah, 2002; Kenney and Curry, 2001; Turkle, 1995; 2011; Zook,
2000). The new platforms have not come without criticism, with many arguing it is creating a
‘weightless economy’ where consumer’s engagement is with machines and not people.
Previously, a company’s business model emphasis was placed on producing a physical good
with value created often through the sales transaction. However, technology has completely
disrupted this long-standing business model (Porter, 2014). An illustration of a company that
embraced technology in creating a new business model is ‘Net-A-Porter’, their customers can
browse what they have to offer without having to physically enter their stores. The URL goes
beyond shopping through offering their consumers the latest trend styles and magazines. The
website goes over and beyond by offering an augmented reality interactive ‘shop’ called ‘The
Window Shop’, where a customer’s scans a photograph of their desired product using an
image-recognition application and they can have the product delivered by the next day. This
business model has proved hugely successful with over 3 billion female customers logging into
the website monthly. Founder of the company, Natalie Massenet contributes 5% of the
company’s revenue to various fashion bloggers who she claims are a major influence on their
success.
The 21st
century has been described as ‘the era of social commerce’ (Fader and Winer, 2012).
Due to the increase in social media and fashion bloggers there appears to be a shift in who
shapes brand perception between the fashion producers and consumers. With the ubiquitous
wireless connectivity has come a whole new era of competition, which is disrupting value
chains and resulting in organisations re-thinking everything they do both internally and
externally (Porter, 2014). A business must look further than just the technology and into the
competitive transformation taking place (Porter, 2014). Fashion platforms have become
portable creating ‘always-on’ and ‘always connected’ customer communities and are changing
the pace and form of fashion dissemination. The effects of this has been described as
‘relational’ and ‘depositional’ rather than just ‘disruptive’. The internet is more than just a
form of technology it changes the way we interact with the world. As Castells (2001:1) claims
“The internet is the fabric of our lives”. Fashion is no longer captured in a moment or one
single touch point or based on supply and demand (Entwistle, 2000; 2010; Entwistle and

9. 3
Rocamora, 2006; Rantisi, 2006; 2009; 2011). Emerging technologies as a result of this are
reducing the boundaries between brands and customers, producing and consuming, offline and
online, the object and image.
In addition, technology is removing the number of middle men in retailing. Rocamora (2011)
claims that consumer participation is contributing to a more open, democratic and transparent
fashion world. There is no doubt that the internet has transformed consumers from receiver of
brand messages to active participants, ‘brand story tellers’ or ‘authors of their own lives’ (Holt,
2002:87). Consumers are now hugely influencing the luxury fashion markets and play a prime
role in the value creation process. This led marketers throughout the industry to rethink the
connections between creation, sale and end use (Tokatli, 2012). The new formed relationship
between luxury brands and their customers are raging through the market laws and business
models. This will require new understandings of strategies as a process of continuous co-
creation (Benkler, 2006; Von Hippel, 2005). However, the core principles of strategy still apply
throughout the industry. Porter (2014:21) emphasises that in order to achieve a competitive
advantage ‘a company must be able to differentiate itself and thus command a price premium,
operate at a lower cost than its rivals, or both.’ The foundation of strategic success is
distinctive strategic positioning by doing things differently and providing unique value to the
customer.
1.3 Conclusion:
In an ‘era saturated with technological unconscious’, virtual spaces appear to be proving just
as effective as physical ones (Clough, 2000; Featherstone, 2009; Thrift, 2005). The
technological era which is rapidly taking over the fashion industry signals both disruption and
disturbance to the conventional power relations that structure the luxury brand fashion industry.
There appears to be exciting times ahead for all involved in this industry whether you are the
consumer or retailer.
Chapter 2 reviews the literature surrounds the domains of digital marketing, disruptive
innovation, the business model, innovation, competitive advantage and IT in the retail industry.
A description of the exploratory framework used is presented at the end of this chapter. Chapter
3 discusses the methodology used by the researcher, through describing each layer of the
research ‘onion’. Chapter 4 lays out the data findings through a thematic and within case
analysis. Finally, Chapter 5 presents the discussion and conclusions, the implications and
limitations of the research.

10. 4
Chapter 2: Literature Review
2.1 Introduction
This chapter will review the literature surrounding technological innovation which is disrupting
industries worldwide in creating a competitive advantage. Definitions and descriptions of;
digital marketing, disruptive industry, innovation, competitive advantage, customer co-
creation, business model and IT in retail are provided. Each area of business discussed must
be fully assessed and understand as themes directly affecting the disruption of the fashion
industry.
2.2 Disruptive Innovation
Disruption has been translated into the following definition by Christensen, Raynor, and
McDonald (2015:7):
“A process whereby a smaller company with fewer resources is able to successfully challenge
established incumbent businesses.”
However, Danneels (2004) and Markides (2006) have commented that there is still confusion
over the precise definition of disruptive innovation. Disruptive innovation involves a
breakthrough in a product or technology innovation creating new paradigms (Chandy, Prabhu,
& Antia, 2003). Clayton Christensen who is ancestor of the theory of disruptive innovation
defines it as:
“Explains the phenomenon by which an innovation transforms an existing market or sector by
introducing simplicity, convenience, accessibility, and affordability where complication and
high cost are the status quo.” (Christensen Institute, 2015:1)
Clayton Christensen’s theory of disruptive innovation partially originates from classic
grounded theory (CGT). Disruptive innovation threatens existing markets and the way
businesses are operating in them by creating something completely unique in value to
consumers (Simmons et al., 2013). Disruption is said to have occurred when a company’s
mainstream customers start using the new entrants’ offerings to the industry in large volumes
(Christensen, Raynor, and McDonald, 2015). The heart of disruptive innovation is that it
disrupts non consumption (Chulu, 2015).
Strategy is everything in disruptive innovation, Charitou and Markides (2003:4) describe
strategic innovation as:

11. 5
“Innovation in one’s business model that leads to a new way of playing the game. Disruptive
strategic innovation is a specific type of strategic innovation- namely, a way of playing the
game that is both different from and in conflict with the traditional way”.
Furthermore, Porter (1996) describes the heart of strategy is deciding to carry out business
activities in a different way to competitors. Christensen’s (1993) disruptive and sustaining
innovations are constitutionally strategic in the Porterian sense.
Bower & Christensen (1995) claim that new technologies have the ability to form new markets
or disrupt the existing market. Analysing the disruption of an innovation strategy is vital so
that entrants can avoid inimical consequences from missing a disruptive innovation (Nagy et
al., 2016). Christensen has acknowledged disruption to some extent but not all effects of
innovative technologies (Nagy et al., 2016). Creating one concrete definition of disruptive
innovation has been ambiguous. One possible reasoning behind this is because Christensen
has identified two different types of disruptive innovations; Low-end innovations and new
market innovations (Nagy et al., 2016). The difference is new market innovations create a
demand for new technology, whereas low-end innovations supply similar characteristics to
already existing technologies but are considerably less expensive (Nagy et al., 2016). A clear
and concise definition of disruptive innovation that is grounded within innovation is needed by
practitioners worldwide, this is the fundamental criticism surrounding the topic of disruptive
innovation (Markides, 2008, Schmidt & Druehl, 2008). Two definitions of disruptive
innovation has cause confusion throughout industries worldwide. One view focuses on cost
and functional quality, while the opposing view focuses on market characteristics. Typically
low price and quality innovation continues to improve until it reaches a point where it comes
into competition with market leaders, hence disrupting the markets status quo (Bower &
Christensen, 1995). This view of disruption attempts to make price and quality an innate
innovation characteristic, which would appear incorrect as both these are elements of a business
strategy rather than innovation (Nagy et al., 2016).
Other theorists have attempted to stretch the meaning of disruptive innovation and as a result
have made it too broad and misinterpreted the overall meaning in the process. This is evident
when Charitour and Markides (2003) describe the Swiss watch manufacturers as becoming
disruptive innovators through creating different product attributes of the watch, such as price,
functionality and features. The Swiss manufacturers did not try to outperform other watch
manufacturers through improving price or performance, rather they attempted to create a

12. 6
different product attribute style (Charitou & Markides, 2003). However, style is not a trait of
disruptive innovation. This Swiss example is a highly flawed understanding of disruption and
portrays the level of confusion surrounding the topic. Although the definition could be
described as disruption, it is not in line with Christensen’s definition (Chulu, 2015).
Perpetual Betterising puts forward a remarkable view into the ongoing debate surrounding the
definition of disruptive innovation. The argument states that disruption is not synonymous
without fragmentation, rather what is needed is to disrupt non consumption through agency of
a de-complexed architecture (Chulu, 2015). De-complexity can be sectioned into five elements
which are; low cost, simplicity, compactness, portability, and convenience (Chulu, 2015).
Markides (1997:11) describes de-complexing as how managers ‘change the rules of the game’.
Therefore, disruptive innovation constitutes as strategic innovation or Markides’s business-
model. Christensen and Raynor (2003) support Markide’s theory stating disruptive innovations
are best managed when integrated with business model innovation. Nevertheless, Markides’s
theory of the business model is not entirely accurate (Chulu, 2015). Disruptive innovation is
highly concentrated on the pattern of the business model therefore it was essential that
Markides’s got his business model description right. The vital point that Markides (2006)
misses is the crucial role that technology plays in enabling successful disruption. Technology
is the essence of de-complexity (Chulu, 2015). Chulu (2015:48) compares disruption without
technology to a ‘beautiful car without an engine’. Perpetual betterising, through leadership,
reconciles Christensen’s (2006) clarification that disruption is a process with Markides’s
(2006) criticism that disruption could end without achieving replacement of incumbents to an
existing industry. Perpetual Betterising rises conceptually above both Christensen’s (2006)
and Markide’s (2006) descriptive polemic.
Christensen claims that some innovations will be disruptive to some groups but may not be to
others (Adner, 2002). The difficulty is establishing which innovating factors cause a market
to disrupt (Nagy et al., 2016). Characteristics must be identified because it is these that create
or disrupt change in customer’s expectations and new markets rather than a price strategy
(Nagy et al., 2016). Both Markides (2006) and Tellis (2006) claim in order for disruption
innovation to occur, customer expectation must change in a market. This definition now shifts
the focus away from the market strategy and onto innovation characteristics with market
expectations (Nagy et al., 2016). However, the definition fails to specifically list the
characteristics required to disrupt marketplace preferences (Nagy et al., 2016). Innovation
characteristics identified by literature are; radical functionality, discontinuous technical

13. 7
standard, and an innovations ownership (Thomond & Lettice, 2002). Radical innovations
disrupt markets in Christensen’s new market fashion through creating new markets (Nagy et
al., 2016). Christensen claims that radical innovations offer something completely different to
the market that receives a good response from consumers by creating this new demand (Nagy
et al., 2016). The success of a disruptive innovation will depend on the market needs at the
time and other innovations present (Nagy et al., 2016). If an innovation is established providing
radical functionality then an opportunity is made for this innovation to transform into a new
market innovation (Nagy et al., 2016). Discontinuous innovations disrupt markets as described
by Christensen’s low end innovation (Nagy et al., 2016). Low end innovation is created when
an innovation seeks to lower costs through new technical standards or a new ownership (Nagy
et al., 2016). Therefore, businesses still need one unified definition of disruptive innovation
which clearly acknowledges specific innovation characteristics to understand the type of
disruption which will take place within the organisation (Nagy et al., 2016).
2.3 Digital Marketing
Blickle et al (2009:182) describes digital marketing as ‘marketing activities using information
technology and digital instruments.’ Lin (2009) describes marketing behaviours in the digital
world as e-marketing. Digital marketing is affected by technology, economics and marketing,
where a business can conduct marketing in accordance with the trend of networking,
digitalization and personalization (Maw-Liann at al., 2015). A brands identity is told through
marketing and advertising where their best attributes are communicated to the customer (Aaker
and Joachimsthaler, 2000). The key to success in advertising in the digital era is to have the
information highly exposed. Social media is one area of digitalised marketing that is exploding
across the industry as consumers have become authors of brand stories (Gensler et al., 2013).
Kaplan and Haenlein (2010:61) defines social media as ‘a group of internet-based applications
that allows the creation and exchange of user-generated content’ and is a crucial facilitator of
word-of-mouth communication. Studies shows that over 90% of consumers go to online
reviews prior to purchasing the product, with 67% of purchases based on user-generated
content (Leeflang, 2014). Social media has become a favourable source of advertising for
customers because they are inclined to lack trust in other forms of advertising (Nielsen, 2007).
According to Williamson (2011) over 50% of social media users follow brands on social media
platforms. Hence, luxury brands are now investing a large amount of time and finances into
their social media to develop brand fans who reflect positivity and loyalty towards the business
(de Vries, Gensler and Leeflang, 2012). These online conversations mean customers can share

14. 8
their brand experience and views to create a story which gives the brand meaning (Escalas
2004; Singh and Sonnerburg, 2012). Findings have proved that social media achieves customer
retention and adoption (Nitzan and Libai, 2011). However, social media has implications for
retailers as it is an environment where consumers are not only value creators but have the
potential to be value destroyers for a business (Verhoef, Beckers, and Van Doorn, 2013).
In order to achieve an effective digital marketing strategy the characteristics of technology and
marketing must be thoroughly understood by the enterprise (Maw-Liann et al., 2015). Many
brands have voiced concern that digital marketing only appeals to the younger generation (Teo,
2011). However, findings have shown older customers are potentially the fastest-growing
segment of the population in this area as they are portraying similar buying behaviours to
youths (Leeflang, 2014). Furthermore, there are expectations that marketers will be adopting
transformative mobile marketing strategies in the near future. It is not surprising that marketers
are placing extra importance in this area of mobile marketing as more than 1 billion
smartphones were sold in 2013, with mobiles ‘driving a second revolution that is more
profound than the first one’ (Husson et al., 2013:2). The internet should be viewed by retailers
as a favourable transaction and communication channel which assists communications between
the seller and end-users, which help provide a better service to meet the personal demands of
the customers (Maw-Liann, 2015).
(Source: Euromonitor International, 2016)

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2.4 Innovation
There has been much ambiguity around the precise definition of innovation, however one thing
is clear, which is that innovation must be viewed from a marketing and technological
perspective (Garcia et al., 2002). Innovation has been defined as:
“an iterative process initiated by the perception of a new market and new service opportunity
for a technology based invention which leads to development, production, and marketing tasks
striving for the commercial success of the invention” (Garcia et al., 2002:112).
An invention does not become innovative until it is marketed to the consumers and diffused
into the market place (Garcia et al., 2002). Product innovation directly involves marketing
because it often requires new market places to evolve (Garcia et al., 2002). Therefore, it is not
just inventions that need to be innovative but more importantly the way the product is sold to
the market through innovative marketing strategies. Technological orientation and market
orientation can create positional advantages in terms of customer satisfaction and product
differentiation (Kim et al., 2013). These two factors help improve the meaningfulness and
novelty when launching new products in an organisation. A firms marketing and technological
capabilities are shown to have a strong impact on the performance of a business (Harmancioglu,
Droge, and Calantone, 2009).
When creating innovative marketing strategies they must be formed through a macro and micro
perspective. Macro innovativeness involves an external perspective, these factors are felt
market-wide, industry wide or even worldwide (Garcia et al., 2002). Micro perspective
involves a more internal marketing approach, such as R & D strategy targeted at that precise
firm’s end user (Garcia et al., 2002). Many firms adopt an innovation strategy whereby they
imitate and improve on existing products or technologies, this is called ‘analyser strategy’
(Miles and Snow, 1978). Strategic orientation involves the strategic direction implemented by
a firm to create superior performance within the business (Gatignon and Xuereb, 1997).
Grinstein (2008) agrees that strategic orientation should be combined with other strategic
orientations such as technology, in order to fully understand an organisations market
intelligence. Market-orientated industries such as the fashion industry place their strategic
priority on maintaining superior customer value through responding to market information
(Slater and Narver, 1995). This ties in with the belief that “competitive advantage grows
fundamentally out of the value a firm is able to create for its buyers” (Porter, 1985:16).

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2.4.1 Competitive Advantage: Value Innovation
The constantly changing market environment has become a key concern for marketers
(Matthyssens et al., 2006). Digital has become a vital source of competitive advantage in
marketing as the usage of the internet continues to expand globally (Leeflang et al., 2014). The
increase in competition, advancement of technology and commodization have limited the
ability of organisations to branch away from the usual way of carrying out business
(Matthyssens et al., 2006). ‘Value innovation’ or strategic innovation has become recognised
as becoming increasingly important to create and sustain a competitive advantage and to kick
start an organisation (Baden-Fuller and Stopford, 1994; Braden-Fuller and Pitt, 1996). Value
innovation involves redefining a business, where both the relationships and roles of the firm
are redesigned (Matthyssens et al., 2006). The literature on the topic of ‘value innovation’ is
still quite fractured and lacks a solid empirical foundation (Matthyssens et al., 2006).
There are external and internal barriers open to value innovation (Matthyssens et al., 2006).
Successful innovation is fixed in a company’s entire network of relationships, not only within
the organisation itself but the full commitment of external partners too (Matthyssens et al.,
2006). Therefore, value innovation is integrated into the concepts of absorptive capacity and
dynamic capabilities (Matthyssens et al., 2006). Dynamic capabilities are found within the
company’s strategic ability to achieve new resource configurations as markets change
(Eisenhardt & Martin, 2000). Zahra and George (2002) claim that it is absorptive capacity that
leads to producing dynamic organisational capability. Day (2002) states that an industry wide
market sensing is necessary for value innovation. The relations with central accounts and
network partners must be formed (Kothandaraman & Wilson, 2001). The business marketer
must attempt to enter into the world of the consumer (Leonard- Barton, Wilson and Doyle,
1995).
The problem is that firms become embedded in what is called ‘industry recipes’. These recipes
prevent an organisation from recognising or creating value innovation (Matthyssens et al.,
2006). Many businesses are attempting to break away from their existing ways of marketing
by using different marketing-mix tools (Matthyssens et al., 2006). The aim of value innovation
is to create a new market that provides superior customer value, where businesses have the
ability to compete with others rather than out-perform them (Pitt & Clarke, 1999). The
importance of value innovation is not the technological aspects; it is reviewing the business
model to ensure it creates new and exceptional customer value (Matthyssens et al., 2006).
Globalisation has caused value innovation to become increasingly important due to the ‘high

17. 11
velocity playing field’ (Eisenhardt, 2002). Each business model is challenged in different ways
due to the increased rivalry (Stabell & Feldstad, 1998). In addition, cost and efficiency driving
a sustainable competitive advantage, creativity, timing and flexibility are important factors
(Galunic & Eisenhardt, 2001). A guaranteed way to achieve a competitive advantage is through
continuously creating new value concepts and re-inventing how customer value is delivered
(Matthyssens et al., 2006). A business must be fearless and break away from widely followed
industry recipes and create their own unique and innovative way of performing business
(Spender, 1989). Deviating away from these widely established patterns is very difficult for
organisations to achieve (Sull, 1999).
2.5 Customer Co-created Knowledge
Traditionally, consumers were viewed merely as passive recipients but now they are considered
to be active partners in the business. They are recognised as creating value and aid in
developing solutions to address their own needs (Franke, Schreier, and Kaiser, 2010). This
paradigm shift is due to new technologies which allow customers to be highly informed,
providing wider opportunities for firms to integrate customer expertise (Prahalad and
Ramaswamy, 2004). Mahr et al (2014:599) defines customer co-creation as; “customer
coproduction of knowledge that is valuable for the firm’s innovation process.” This is where
customers perform activities during the innovation process that the employees would have
previously undertaken (Mahr et al, 2014). Recently theorists suggested that customer co-
creation during the innovation process is a source of competitive advantage for organisations
(Mahr et al, 2014). Customer co-creation appears to be more successful for relevant but novel
knowledge (Mahr et al, 2014). The knowledge of customers who have a close relationship
with the firm’s innovations produce highly relevant results at a cheap cost (Mahr et al, 2014).
Communication channels are the key enabler to co-creation (Nohria & Eccles, 1992). In
addition to this, marketing and innovation management are two detrimental factors to
successful co-creation (Mahr et al, 2014).
An organisation’s consumers are a company’s greatest external source of knowledge for
innovation (Eurostat, 2008). In order for a business to access the consumer they may often
need to make large investments in top communication channels in the hope that this will result
in a growth in the firm’s size and profit (EIU, 2009). Firms must decide which channels they
want to use to facilitate co-creation. This is a critical skill for managers, on account of the
increase in technology and social media (Daft and Lengel, 1986; Ganesan, 1994). Moenaert
and Souder (1996) state that the outcomes of the communication process is directly dependant

18. 12
on the characteristics of the communication channel used. While these communication
channels are important to external relationships, they also affect internal, buyer and supplier
relationships (Obal and Lancioni, 2013) Face to face channels could prove costly to the point
that they outweigh any benefits created through the channel (Olson and Bakke, 2001). Newly
formed digital channels have now created a lower cost solution, a preferred form of
communication for buyer/suppliers and a faster more efficient way of reaching customers
(McIvor & Humphreys, 2004; Sawhney, Verona & Pandelli, 2005). Organisations can use this
inexpensive source to their advantage to create greater knowledge in the innovation process,
whereby customers actively engage in developing new products (Fuchs and Schreier, 2011).
Nevertheless, these resources cannot be controlled to the extent of internal resources which
may mean mechanisms for knowledge transfer, incentivizing and data protection will be
required (O’Hern and Rindfleisch, 2010). ‘Bit-to-bit’ channels, such as e-mail are becoming
increasingly more popular as a form of communication because they are faster and a less
expensive form of contact (Evans and Wurster, 1997). While bit-to-bit channels are the most
cost friendly, face to face is still the most successful communication technique for creating
novel knowledge (Mahr et al., 2014). This is largely because digital channels are unable to
transfer complex messages which are often needed for discussions with end users, which may
lead to misunderstandings (Ganesan et al., 2005).
According to Bailey and Pearson (1983:542) Knowledge value is decided through “the relative
balance between costs and considered usefulness”, which is in line with the economic theory.
Through co-creation both the customer and company use their knowledge and understanding
to further learn about one another’s needs (Sawhney et al., 2005). Through these shared
experiences, both a united goal and mutual understanding is established (Mahr et al., 2014).
This kind of collaboration helps avoid misunderstandings and conflicts which further creates
trust (Sivadas and Dwyer, 2000). However, Christensen and Bower (1996) contradicts this by
arguing that customers cannot contribute to the innovation process because they do not possess
the imagination required to do so.
2.6 Business Model
Business models have the potential to reshape an entire industry and share value to give new
entrants an advantage (Johnson et al., 2008). Morris et al (2005:727) has defined the business
model as:

19. 13
“A concise representation of how an interrelated set of decision variables in the areas of
venture strategy, architecture, and economics are addressed to create sustainable competitive
advantage in defined markets.”
A business model is composed of complex systems of exchanges and interfaces (Al-Debei &
Avison, 2010). It has been described as ‘a mechanism used to bridge the gap between the
outside-in and inside-out perspective’ (Simmons et al., 2013:744). The business model is a
tool for advancing interconnecting firm, interfirm and marketing by contributing power to them
(Mason & Spring, 2011). Morris et al (2005) research indicates that there are links that business
modelling is directly related to marketing (Johnson, Christensen, & Kagermann, 2008). There
has been criticism over the business model in recent years, with Mason & Spring (2011)
claiming that a new view of the business model is needed. They suggest moving beyond the
dominant firm level of analysis and to involve the network level.
The interaction between internal and external relationships is vital when running a business
(Ford, 2011). Value inscription is the heart of the business model. Wirtz, Schlike, and Ullrich
(2010:274) state that:
“A business model reflects the operational and output system of a company, and as such
captures the way the firm functions and creates value.”
Value inscription involves destabilizing forces and tensions arising from the commercialization
of disruptive digital innovations (Simmons et al., 2013). Teece (2011) claims it is how a
business creates and delivers value to customers. Most previous studies on business models
place emphasis on value creation at firm level and through the consumer perspective (Simmons
et al., 2013). Whereas Mason & Spring (2011), argue organisations need to move away from
a firm level view and view them in light of the wider network of relations involved. Extending
on the traditional view of value, it is clear that multiple roles external and internal to the
organisation shape the company’s business model through manipulation of the meaning given
to technology that grounds them (Bijker, Hughes, & Pinch, 1987). Chesbrough and
Rosenbloom (2002) brings technology into the definition, stating the value created for
customers is based on the technology. Srinivasan (2006) discusses how technology has the
ability to undermine currently trending business models and sources of value. This is
particularly relevant to retail because in order to enable consumers to search and buy online,
an organisation must re-specify their business model (Leeflang, 2014). Organisations must
have a clear understanding of the business model, if they want to commercialize technology to

20. 14
create value, particularly when potential technology opportunities do not fit in with their
current business model (Chesbrough & Rosenbloom, 2002).
In conclusion, value inscription on business model innovation in addition to marketing assists
in overcoming tensions and conflict related to the commercialization of disruptive digital
innovations (Simmons et al., 2013).
2.7 IT in the retail industry
Findings within the retail industry show that IT per se have not created sustainable performance
advantages but businesses that use IT to grasp intangible, complementary human and business
resources have (Powell and Dent-Micallef, 1997). Porter and Millar (1985) link IT to the value
chain claiming its main purpose is to coordinate activities in the chain. Rackoff et al. (1985)
states IT should support competitive gaps such as innovation, growth and cost leadership.
Finally Rockart and Short (1989) claim that IT serves to solve coordination problems between
strategic business units. Previously research focused on advantages from the industry and
competitive positioning, recently resource based research focuses on intangible firm specific
advantages (Hall, 1993). Clemons and Row (1991) argue that inevitably competitive imitation
usually destroys any IT-based advantages resulting in additional returns ceasing.
Keen (1993) argues that benefits achieved through technology within a company rests on
management difference and diffusion of the technology. As previously mentioned, an
organisation’s relationships can hugely affect the way a business runs and what it can
accomplish (Parra-Requena, Ruiz- Ortega, & Garcia-Villaverde, 2011). IT needs to be
integrated into the human dimensions within the firm which involves strong employee
participation, empowerment and cultural openness (Pfeffer, 1995). Zuboff (1998) states IT
integration in a firm often fails because managers do not realise the level of organisational shift
that is required. Boar (1994) has suggested a model which aligns technology with business
process redesign, involving reengineering the existing customer driven business process.
Hammer and Champy (1993) support this approach who make the comparison of integrating
new technology with traditional structures to ‘paving the cow paths’. The fashion industry is
an industry directly related to all the above because it has seen a clear and profound IT change
in the past 20 years.

21. 15
2.8 Exploratory Framework & Summary:
The exploratory framework will be used to guide the empirical data gathering and the analysis.
Themes emerged throughout the literature which appear to be directly influencing the
disruption of the fashion industry. Each theme that emerged was directly related or influenced
by the next theme. Therefore, the researcher established through literature and an exploratory
framework that it is not one factor or theme which influences technological change, rather the
change is influenced by multiple variables.
The 5 features drawn from the literature which will influence the layout of the interviews are:
 Disruptive Innovation
 Business Model
 Technology
 Marketing Strategy
 Creating Competitive Advantage

22. 16
After researching the relevant literature, the researcher has developed an understanding of what
translates as disruptive innovation within an industry. Currently technology is disrupting
almost every industry throughout the world; it is changing both the way a business is run and
how customers perceive a business. Nevertheless, technology per se is not enough as it must
be implemented through careful strategy and innovation. When this happens technology can
become a greater source of competitive advantage open to an organisation. If disruption is
successful it can create a competitive advantage for the business that first reaches the market
with this disruptive innovation. However, innovation involves careful strategic planning and
the strategy of a business derives from a strong business model within a business. Literature
identifies marketing as directly involved with disruption because a product cannot be disruptive
until it is introduced to the market. This would indicate that the marketing of a product is
almost as important as the actual product itself.

23. 17
Chapter 3: Methodology
3.1 Research Onion
The researcher will follow the research ‘onion’ model when laying down the methodology
which will be undertaken. The research ‘onion’ (Saunders et al, 2011) will enable the
researcher to formulate a consistent research method. The research ‘onion’ is a commonly
used metaphoric tool in research. It assists a researcher in deciding the philosophy, approach,
method, strategy, time horizon, data collection and analysis that will be used. The diagram
below illustrates the different layers which I briefly mentioned and how they relate to one
another.
(Source: Saunders et al., 2011)
3.2 Research Philosophy
The research philosophy is used to describe the ‘development of knowledge and the nature of
that knowledge’ (Saunders et al., 2009: 107). There is little ambiguity surrounding the research
question, which led the researcher to adopt an interpretivist approach when conducting the
research. Often it is more appropriate for a researcher to view the philosophy used as a
continuum as opposed to opposite positions (Tashakkori and Teddlie, 1998). There are four
main areas of a research philosophy, which are; axiology, ontology, epistemology and data
collection techniques (Saunders et al., 2011). Ontology is associated with the nature of reality.
In relation to axiology, this is the researcher’s view of the role of values in research. I the
researcher was part of the research carried out and could not be held to be separate, therefore

24. 18
supporting the adoption of a subjective approach. Epistemology focuses on subjective
meanings that motivate actions and social phenomena. The data collection used most often
with interpretivism is qualitative, small and in-depth investigation.
There are two counter parts of ontology which are ‘objectivism’ and ‘subjectivism’.
Subjectivism follows the belief that social phenomena are formed from the perceptions and
actions of people concerned with their existence (Saunders et al., 2011). A subjective approach
was most applicable to the research because it was vital to study ‘the details of the situation to
understand the reality or perhaps a reality working behind them’ (Remenyi et al., 1998). This
derives from the interpretivist philosophy which is required to investigate the subjective
meanings motivating people’s actions and further help the researcher understand these actions
(Saunders et al., 2011). As an interpretivist approach was adopted by the researcher to further
understand the differences between humans in our role as social actors. This highlights the
distinction between research among people rather than objects (Saunders et al., 2011). The
vital requirement during the research was that an empathetic stance was adopted, which is
critical to interpretivist philosophy (Saunders et al., 2011). The researcher must enter the social
world of the subjects and grasp their world from their point of view. This approach was
particularly relevant to the topic because it is of a business management domain and every
business situation is a complex and unique matter (Saunders et al., 2011).
3.3 Research Approach
An inductive approach was adopted to the following research. Data was collected through
various different sources and after analysing the information a theory began to form. Three
interviews were conducted during the research to understand in greater depth the effect
technology was having in the fashion industry and fully grasp nature of the question at hand.
The researcher was aware that by conducting an inductive approach she may not develop an
entirely new theory but rather the same theory as before just with an inductive approach to it,
where the theory follows the data rather than the reverse with deduction (Saunders et al., 2011).
(Source: Saunders et al., 2009)

25. 19
A deductive approach may result in a rigid methodology which would prevent the researcher
from reaching alternative solutions as to what was going on (Saunder et al., 2011). Saunder et
al., (2011) states that researchers who chose to use an inductive approach are concerned with
the context which the event take place in, this directly related to the research question. For the
purpose to the research a variety of methods to collect the data were used in order to research
different view of the phenomena (Easterby-Smith et al., 2008).
3.4 Research Method
(Source: Saunders et al., 2009)
The research method carried out in this study was qualitative. Saunders et al (2009:480)
describes qualitative research as ‘all non-numerical data or data that have not been quantified
and can be a product of all research strategies’. The results of qualitative data is non-
standardised and placed into categories. Qualitative data is helpful when the researcher is
trying to understand the theory behind relationships which are revealed in quantitative data
(Jick, 1979).There are three types of answers to your research question which are; descriptive,
descriptive and explanatory, or exploratory. The answer to your study is dependent on the way
a researcher asks their research question. For the purpose of the research an exploratory
framework was adopted. Robson (2002:59) claims an exploratory study with in-depth
interviews is useful for finding out ‘what is happening; seek new insights; ask questions and
to assess phenomena in a new light’.
3.5 Research Strategies
After careful research, the researcher established that there were multiple strategies available
in this research project. All strategies could be applied to explanatory, descriptive and

26. 20
exploratory research (Yin, 2003). It must be noted that no one strategy is superior or better
than the other. After assessing this, the researcher decided to use the case study strategy.
Robson (2002: 178) describes a case study as “a strategy for doing research which involves an
empirical investigation of a particular contemporary phenomenon within its real life context
using multiple sources of evidence.” Context is an important factor to consider when choosing
a strategy, in a case study the boundary between the event occurring and the context which it
takes place are often not clear (Yin, 2003). The researcher felt the case study was the best
option because it would help achieve a rich understanding of the context of the study and the
process being practiced (Morris and Wood, 1991).
The case study strategy is most often used in an exploratory framework which is why the
researcher felt it would fit in well with this research. This approach is used when the researcher
wants to analyse a research question but is not providing a solution to the problem (Brown,
2006; Sandhursen, 2000). Bryman (1988:90) states that ‘within a case study a wide range of
different people and activities are invariably examined so that the contrast with survey samples
is not as acute as it appears at first glance’. The researcher used multiple data collection
techniques in this exploratory research such as; interviews, observation and secondary
resources. The researcher ensured to let the data lead the research as new perceptions were
created from the new information (Saunders et al., 2009).
3.6 Time Horizon
The research falls into the domain of a longitudinal time horizon. The main advantage behind
longitudinal research is the ability it has to study development and change (Saunders et al.,
2011). By researching phenomenon over time, the researcher is better able to control the
variables being studied once they are not affected by the research process (Adams and
Schvaneveldt, 1991). The core question for the researcher in longitudinal research is whether
‘there has been any change over a period of time?’ (Bouma and Atkinson, 1995:114). There
are two types of longitudinal studies which are prospective and retrospective. A retrospective
study collects data from many different periods but all at once, whereas prospective data is
collected at different times and considered a sequential study (Saunders et al,. 2009). Due to
the time constraints of this research a retrospective approach was adopted.
3.7 Data Collection
Triangulation involves the use of different data collection techniques within a study to make
certain that the data is telling you exactly what you think it is telling you, this is often used
when conducting case study research (Saunders et al., 2011). Using multiple sources when

27. 21
researching not only gives the researcher the ability to study a more expansive range of issues
but inevitably leads to a high level of quality in the findings (Saunders et al., 2009). There are
4 established case study techniques by Yin (1984) based on two discrete dimensions which are;
 Holistic case v. embedded case
 Single case v. multiple case
Yin (2003) states that multiple case studies are often preferable because they help establish if
the results of the first case occur in the other cases. However, the following research will be a
single case with embedded units within it. This will be the fashion industry as the case study
with many different brands studied within the one industry. The three sources of data collection
used by the researcher were secondary data, observation and interviews. Secondary data was
easily accessible through the internet and the library. Secondary data was particularly relevant
to the research as it aided the time constraints which often come with longitudinal studies.
Saunders et al (2009) warns to approach secondary data with the same caution as primary data.
Stewart and Kamins (1993) say that a researcher is at an advantage if they are using secondary
data because prior evaluation is possible due to the data already existing. Therefore, secondary
data is a valuable source for saving time and costs.
Participant observation was conducted, this is qualitative and aims to discover the meanings
attached to people’s actions (Saunders et al., 2009). Observation requires ‘the systematic
observation, recording, description, analysis and interpretation of people’s behaviour’
(Saunders et al., 2009:296). The purpose of the observation was not revealed to the public, nor
group activities partaken (such as buyer behaviour), the researcher merely observed. This type
of data collection is highly relevant to exploratory framework. Delbridge and Kirkpatrick
(1994) categorise the types of data generated by participant observation as ‘primary’,
‘secondary’ and ‘experimental’. The observation conducted by the researcher was secondary
which involves descriptions of what happened or what was said by the public. Robson
(2002:320) suggests that your data may well be classed as ‘descriptive observation’ and
‘narrative account’. In descriptive observation a researcher notes the setting, type of
participants, events, activities and emotions involved in the phenomenon.
The researcher conducted interviews with three interviewee’s who all have job roles directly
related to the luxury brand industry, marketing and technology. The interviews were semi-
structured with a relatively informal list of questions and themes, varying from interview to
interview and depending on the context. All interviews were recorded and conducted on a one

28. 22
to one basis. This is to provide the interviewer with the opportunity to observe the interviewees
facial reactions and other non-verbal cues. All interviews were carried out face to face. Semi-
structured interviews are most commonly used for qualitative studies such as a case study rather
than quantitative studies (Saunders et al., 2009). In addition, it is appropriate to use semi-
structured interviews for exploratory research designs (Cooper and Schindler, 2008). All
recorded interviews will be transcribed immediately after the interview takes place to prevent
bias and provide valid data when analysing.
3.8 Data Analysing
Data analysis is a process involving investigation, testing, classifying and sorting the collection
of evidence to construct empirically based findings (Yin, 2014). Yin (1984) states that a case
study analysis has multiple levels of analysis. This research adopts a comparative case study
analysis, whereby themes were drawn from the literature review which helped researcher
analyse the data. Manipulating data can be considered a constant comparative method. A
constant comparative method involves analysing data whereby the research compares segments
of the research with other segments involved (Thomas, 2011). Through establishing themes,
the researcher was better able to understand the phenomenon being studied. Each of the
findings were compared and contrasted with one another and with the literature collected.
This study involves an embedded design which means it had numerous levels of analysis with
one case study (Yin, 1984). Eisenhardt (1989:534) claims that analysing data ‘is the heart of
building theory from case studies’. A within-case analysis approach was used when analysing
the data, due to the large volume of data collected by the research. As Pettigrew (1988) argues
there is a danger ‘of death by data asphyxiation’ with case study research. The vast amount of
data can often be overwhelming for the researcher, especially because the research problem is
often open-ended.
A within-case analysis usually requires detailed case study write-ups, which are often pure
descriptions but are vital to further insight (Gersick, 1988; Pettigrew, 1988). The idea
surrounding this type of analysing is for the researcher to recognise each case as a stand-alone
entity. This technique enables patterns and themes to surface.

29. 23
Chapter 4: Findings
4.1 Introduction
The purpose of the research over the following case study was to investigate and further explore
the role of technology in disrupting and creating a competitive advantage in the fashion
industry. This research was guided by the following two questions;
1. How is digital disruption/technologies influencing the evolution of the luxury brand
fashion industry?
2. How are advances in digital technology offering new forms of competitive advantage?
The researcher answered these questions through careful observation and semi-structured
informal interviews. The interviews were carried out among three interviewees who are
directly involved with high brand fashion labels and the marketing of these designers. The
researcher studied a broad range of luxury brands in order to compare and contrast different
views and further understand which methods are working best. After the data collection, the
findings were analysed through a constant comparative method, whereby a thematic analysis
was therein applied. This involved extracting common themes which arose through both the
literature and across all three interviews. A within-case analysis was used as previously
mentioned to fully understand the phenomenon of technology in the fashion industry across
multiple brands as opposed to one single label.
4.2 Interview Findings
4.2.1 Interviewee 1: Shannon Jennings
The first interviewee is 25 year old Shannon Jennings. Shannon grew interested in technology
when she studied BESS in Trinity College Dublin not all that long ago. More specifically she
became intrigued with finding out the effect technology within marketing was having on the
fashion industry. This led her to complete her final year project on this specific topic. On
graduating from college Shannon took London by storm where she became a social media
strategist and digital marketing consultant for various luxury brands. She worked for numerous
designers in managing their social media to the best of their advantage. In addition, she is a
contributor to the Huffington Post. Finally, Shannon has also launched her own brand of
handbags called the ‘Cody Handbags’. Shannon has a broad knowledge on this area of research
and was the ideal candidate to further the researchers understanding of the technological

30. 24
changes evolving in the fashion industry. Shannon had a very strong view on the importance
that technology is currently playing in this industry and how she believes that all labels must
embrace these changes in order to sustain a competitive advantage.
Shannon claims that it is not a matter of whether non-technology brands will fall behind in the
future but rather they are already lagging behind other brands which are indulging the digital
options available to them. She discusses top designer ‘Chanel’ and how she remembers the
brand initially said they did not believe in the use of social media, calling it a ‘gimmick’.
However, only recently the brand launched their catwalks live in Time Square, which makes it
evident that the brand has realised that technology was not just a fad.
Business Model
The researcher discussed the business model with Shannon and what she felt were the most
important elements to creating a successful model. Firstly, she mentions the product/service
the business is providing and ensuring that it is perfect. In her opinion the second most
important element has to be technology simply because it is such an enabler. She describes
how businesses which started as a small boutique with one person sitting behind a computer
are now becoming major competitors to other labels.
Disruptive Industry
Shannon revealed that currently there are multiple changes in the high brand fashion industry,
all to do with technology. She specifically mentions marketing within social media and how
there are a number of bloggers who are trending and who are mentioning brands in their blogs
and discussing digital influencers. Shannon describes technology as being disruptive in this
industry. Every brand label is attending technology summits to understand further how they
can help their brand provide a better customer service. These labels are hiring technology
consultants. Take Swarovski which has YouTube technologists; Topshop which has six
employees managing their Snapchat, and Farfetch which has three people hired to look solely
at the future of the store.
“If they don't believe YouTube is going to be the future or technology or social media, they're
wasting a lot of money on these people. Simply put, yes technology is the future of fashion.”
It's all about engagement. “I think if you're missing out on technology, you're missing out on
a huge market… social media is becoming nearly one of the biggest countries they say in the
world because there's so many people on it.”

31. 25
One of the most obvious benefits of social media is that it is cost free and a great way for
organisations to try something new, she calls it a ‘great experiment phase’. A large number of
the digital influencers out there have the money to spend on these brands. No matter who their
target market is for these brands, they must have online social media presence. She claims
that a brand is not the people who buy it but the people who know about it. She quotes ‘I know
about Bentley, but I don't drive a Bentley.’ She exemplifies by describing that many consumers
purchase something because the message gets passed on from someone else. It is our
generation which are renowned for passing on messages to one another through insights from
the social media world and it is our age which are the future for these brands.
If a new idea fails through social media there is no great financial loss for a business. Along
with the financial benefits of social media the number of people a brand can share with is
endless. It just involves a hashtag to create a stream, and then you are reaching out to millions.
The number of people who click into a hashtag and inevitably end up purchasing a product
because they see it on a girl on Instagram is countless. She describes it as complete madness
that some brands have decided not to embrace the free use of social media to help promote
their business and are not providing their customers with the option of e-commerce. In doing
this they are leaving out an ‘entire country’. She claims that you cannot really call your label
a ‘global fashion brand’ if you are failing to go online.
“I think it's really interesting to look at a company that maybe wouldn't be very technical and
see what they're doing because I think they're slowly realizing now that it's not a fad. It's here
to stay. If you're not on board, you're missing out.”
Shannon recognised the phenomenon that social media and other technological innovations
may have with an older generation to whom it may not appeal to. This could prove a greater
problem to high brand labels rather than high street fashion stores, because luxury brands
charge a significantly higher price for their clothing. Shannon states that she recently read an
article that said the majority of luxury brands are finding that the millennial generation have
the same, if not more, finances than the later generation.
Innovation
Shannon further describes innovation and how the core of innovation is technology and
marketing. She claims it is how a business uses these two components to ‘think outside the
box and not do what everyone else does.’ She uses ‘Burberry’ as her example of a high brand
label that have done exactly this. Last September at the Fashion Week in London the brand

32. 26
launched their snapchat where customers could view the show live through their snapchat. The
idea was something entirely new and creative, the brand pretended to have someone break into
the store which had a whole different take on the industry.
“Luxury brands are constantly trying to copy Burberry because the brand takes risks and
thinks entirely differently to any other label out there, that is real innovation”.
Shannon then moves on to discuss Burberrys physical stores and specifically mentions one of
their most famous which is located on Regent Street.
“I think Burberry is a brand, as I was saying before, which does it really, really well. The
reason being, that you walk into the store and you would never know in a second that there's
one piece of technology in the store. The best thing about the Burberry store which I think is
really amazing is that they have no tills.”
The store now have I-pads throughout where customers can make their payments through these.
In addition, the store have staff constantly on patrol to help customers with any assistance they
may require. She mentions that many people have the wrong impression of the store assuming
that because it is technology based, that you will have people walking around like robots
serving you. Shannon describes the store as the complete opposite and a visit to their store is
an entirely ‘seamless experience’. The store has made providing their customer with a better
experience their top priority and have used technology to enable this. It is more than likely the
store imitated this idea from top IT brand ‘Apple’ which also have cashier free stores.
In-Store Technology
Shannon emphasises the importance of a brand to not only have online presence and technology
through marketing but technology within their stores. She describes this as a huge competitive
advantage. Through technology these brand labels can increase their revenue greatly,
especially through e-commerce and connect more with their customers.
The researcher asked Shannon did she think that customers would miss the face to face
interaction that technology is replacing and the physical aspect of retail. She said that
personally she would not because she finds it a burden when store assistants approach her. It
appears that this is likely to be the case for most customers, as up to 65% of customers are said
to be on their phone while in-store looking up sizes. Nevertheless, customers still want the
physical aspect of clothing and to be able to touch their purchase, she proclaims that technology
can still enable that.

33. 27
Shannon discusses how she recently went to a summit where Topshop launched their new
‘queue jumper system’. This is where you tap your phone off the mirror and your purchase is
complete; the shop have interactive ways of knowing whether someone has shoplifted. This
investment is a whole new start-up within Topshop. The retailers bought this idea because they
said one of their main issues was the drop out of customers due to lengthy queues. ‘For them,
that's a problem and they need to fix it. Technology can help that.’
4.2.2 Interviewee 2: David Woolfson
The researcher’s second candidate was 25 year old David Woolfson. David has experience
with both the marketing of luxury brands and creating the best possible customer experience
for high label brands through his 5 years with Brown Thomas. David has worked with some
of the top brands throughout the store such as Tommy Hilfiger, Ralph Lauren, Hugo Boss,
Eton, Grant and Paul Smith. Brown Thomas currently holds the position as the leading luxury
brand department store in Ireland. He describes the superb management and interaction
between the staff at Brown Thomas. In his opinion this ‘feeds down into the customers. They
see the interaction, the bond.’ He describes his fellow colleagues and even his managers as
‘friends’ and that there is not a rigid hierarchy in place. The managers see the level of service
the staff provide to their customers and once the effort is put in by all staff they are free to make
some of their own decisions. All members of staff from manager’s position to floor staff must
actively be involved with the brand and be aiming to achieve the same united goal.
Disruptive Industry
David launches into the interview by describing the fashion industry as going through a
significant change at the moment. He specifically mentions the huge demand for online
retailing and how Brown Thomas have really had to feed this need by creating e-commerce for
their customers. David mentions that Brown Thomas were late to the e-commerce world and
only extended their store to online retailing in the last 2 years. Brown Thomas do not have a
specific target market, rather it is targeted for all ages. This meant that because Brown Thomas
have so many different age groups to please they often have to be careful when creating new
online experiences to make sure it caters for all generations. While David can appreciate the
current shift from physical to online retailing in luxury brands, he claims that:
“With luxury in general, there is a demand for the physical store, but you're starting to see
some luxury retailers now having to go online and change their concepts.”

34. 28
David discusses how this new technological era appeals to many people, however he claims it
is not appealing to all age brackets. He feels it could be more inviting to the younger
generation;
“He'll buy a suit and he'll probably tweet it, or he'll Instagram a pair of shoes he bought today,
because they are all about showing off what they bought.”
David personally enjoys the whole development of e-commerce but while he is “not going to
the physical store like I used to, there is still a need for that physical store.”
He finds that even when luxury brands shift online it is important that they stay true to their
identities and that the customer can really feel a relationship with the brand, which he thinks is
often not as easy to achieve online. He admits that various luxurious brands such as Chanel,
Gucci, Louis Vuitton appear to have achieved it. He emphasises the locations of the stores of
these luxury brands throughout Europe, even Brown Thomas’s location on Grafton Street,
which is one of Dublin’s most prestigious locations. “They don't probably care if they're
making a loss on the store. It's about being seen, and it's about what their image is all about,
at the end of the day”, this is something that customers cannot experience to the same extent
online, therefore this raises the question again of whether luxury brands are more reliant on the
traditional and physical aspects or can they top customer experience just as well online? David
specifically talks about Burberry and how they have turned into an ‘IT Luxury Store’. He
describes this as interesting and very virtual but that he is not entirely sure if this would appeal
to someone in their 40’s or 50’s. He then views the store from another perspective, stating that
perhaps Burberry are right in adapting technology, as it is appealing to the millennials and
young entrepreneurs who are now perhaps the customers with the money. David comes to the
conclusion that it really depends on the customer, whether the technological innovation in
luxury brands is appealing to them.
Innovation
Within Brown Thomas they have started sending out targeted e-mails and other messages.
David makes an interesting remark that the company’s messages are not being sent out on
Facebook. In his opinion this would be a ‘mess’ for Brown Thomas and not very ‘luxury’. The
organisation are therefore promoting and engaging with customers through phone applications
rather than through the use of social media. He explicitly mentions how Louis Vuitton have
an application to engage further with their customers and it is proving hugely successful. David
explains that currently Brown Thomas is neither more dependent on online retailing nor the

35. 29
more physical aspect, but rather an equal combination of the two. He states that perhaps the
company is moving at a slower pace when adapting to the digital aspect of luxury compared to
some of the high street brands;
“It's still in the development stages, so I wouldn't say it's solely dependent on online sales, I'd
say the store itself is probably the main trigger for the interaction.”
Their two years online consisted of the first year involving just their cosmetics and handbags
holding online presences. However, now e-commerce is rolling out throughout the store
reaching into the clothing and kitchenware departments. He further discusses that now if a
customer makes a purchase on their loyalty card, they will receive an e-mail in relation to that
purchase within a number of days informing the customer of events taking place in relation to
that brand. This helps the company keep in constant contact with their customers, even after
the purchase is made.
In-Store Technology
When we discussed changes within the store in relation to technology, David said they are
using less posters throughout the store which they previously would have used a lot of. The
luxury menswear magazine which comes out twice annually is now being moved online
replacing the hardcopies that customers used to receive. BT2 have recently installed mirrors
where you can visualise the clothing you want on you without actually having to waste time
trying on the clothing. This technology is still during the trial stages but it is still a major
technological development for the company. Another new up and coming innovative change
that the store are introducing in the near future, is to make the store a ‘one-stop-for-all’ or a
lifestyle for the consumer. They are creating this through introducing a bar which will join the
restaurant and barbers already present in the menswear department. By introducing these extra
perks for customers they are trying to create a lifestyle within their stores by extending their
customer services far beyond just retail.
Competitive Advantage
Brown Thomas have currently got a system in place for tracking their customers post purchase
called ‘EPS’, David describes it ‘as being like a mystery shopper’. The system involves
sending a personalised e-mail to one out of ten customers daily asking them about their
customer experience within the store. There is no right or wrong answer it is just all about
getting feedback on their experience so that the store can constantly make improvements and

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provide customers with the best possible in-store trip. The store have stopped their paperback
tailoring and now all information is kept on the computer system. All it involves is a swipe of
the loyalty card and they can instantly have all the customer’s information. Therefore, there is
less time wasted on paper work or asking customer’s questions at the counter.
Finally, David states that for him luxury brand shopping is;
“All about the customer service at the end of the day. When you come into a luxury store, you're
coming in for the experience. They might only buy a t-shirt, but they want to be seen with the
BT bag. For them it's just the luxury feel itself.”
4.2.3 Interviewee 3: Jill McGinn
The third and final interviewee was 26 year old Jill McGinn. Jill has extensive knowledge in
all areas of this research through her Masters in Marketing, Fashion Blogging career and jobs
in both Web Summit and Zen desk, both two thriving start-ups in technology and innovation.
Disruptive Innovation
Jill starts her interview by admitting that ‘technology is really the way forward’. Within fashion
she describes the influence that bloggers are having on buying behaviours. She believes that
many brands are recognising this and are investing more of their finances in hiring bloggers to
reach out to their customer base and make the brand more talked about. She claims that they
are using less money on traditional marketing such as magazines and instead are using bloggers
as ‘ambassadors’ of the brand. For Jill blogging has become so successful for brands because
they are paid, which for customers makes it is a more ‘trustworthy’ form of advertising.
“Traditional marketing is biased, you feel its propaganda. Whereas with a blogger it’s like
your friend or your family recommending something.”
This is just one of the many ways that marketing is being changed by technology. Jill strongly
believes that technology is completely changing the way that people shop and which brands
customers are purchasing. While Jill is a big supporter of technology in the high brand fashion
world, she admits that ‘an element of tradition is nice’. She specifically mentions, billboards
at Christmas and the windows of Brown Thomas as something that is traditional and special to
the industry. She discusses how the majority of bloggers will publish their work through a
social media page. Many bloggers will not have an actual blog unless they are really interested,
instead they have an Instagram, Snapchat or Facebook page where fashion will be advertised.

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Competitive Advantage
Jill hesitates on her previous comment because while she admits it is nice to have some
tradition, the retailer must look at what is right in front of them which are people on their
phones, iPads and Laptops. It is through these various forms of technology that brands can
interact with their customers at all times, whether at home, in work or on the bus.
When enhancing the customer experience, Jill believes that the brand must not forget about
making their websites as user friendly as possible before leaping ahead to high-tech equipment.
Simple things like finding sizes, the return policies and prices are vital information that should
be readily available to customers. When customers are dissatisfied with the basic requirements,
they are unlikely to come back. The consequences of a dissatisfied customer can be huge for
a brand, as many customers take to Twitter and other social media platforms to slate the brand.
She believes that real time help on site is an available solution to this and all brands should
invest in it, for example ‘Zocum Chat’.
“The best customer service that technology can give in the fashion industry is never letting the
problem develop. Never let it reach that stage.”
Innovation
Jill states that the customer service of a brand does not stop after the item has been purchased.
The most difficult part is getting the customer to feel satisfied to the point that they want to
return to the brand, this involves building a relationship and being innovative. Jill describes
innovation as ‘doing something a little bit different.’ The person who reaches the market first
is going to be the most successful and everyone will eventually follow.
“It is the brands job to think of innovative ways to do this and keep progressing but technology
gives you those means to progress.”
She claims that within blogging and the fashion industry, innovation would have to be
Instagram for her. In addition, she mentions Snapchat as another favourite, in that it is kind of
‘subdued’ and ‘not pushy in-your-face’.
Technology
Jill discusses a major event which she partook in the fashion industry which was held by Web
Summit only last year. This was a technology event for start-ups looking to invest in
technology. Within the fashion sector of the event, major designers, models and bloggers spoke

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to the various different brands who attended the event. Fashion and technology linked up
together, for example Sonny Vu watches joined with Swarovski to make fashion items which
could monitor the number of steps a person took, your sleeping pattern and more. This was
technology and fashion coming together. Various different phone applications were also
presented at the event, such as ‘Tinder-for-fashion’. This is a new application recently
developed where a person uploads a photo of their outfit and others rate the outfit.
“It shows that technology in fashion is really prevalent today, to the point that there’s an event
actually for itself.”
4.3 Conclusions:
Upon completion of my thematic analysis, multiple themes arose through the three
interviewees. The findings of all three interviews proved to be somewhat inconsistent. There
were mixed views from all three participants on whether they believe technology is creating a
competitive advantage in the luxury brand industry. The common denominator or theme that
emerged through the three interviews is that technology is undoubtedly disrupting the fashion
industry, causing the traditional way of carrying out business to become outdated and
unsustainable. The question remains, whether retailers will embrace this disruption to create a
competitive advantage, and furthermore whether consumers are entirely welcoming of the
change.

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Chapter 5: Discussion and Conclusions
5.1 Data Analysis
After extensively researching literature and conducting interviews across multiple specialists
in the area of technology and fashion, it is clear the internet and technology has completely
changed how customers and retailers interact with brands. It has remodelled the economics of
marketing by making the traditional strategies of marketing extinct. It has made the old way
of carrying out business no longer sustainable (Edelman, 2010). Technology is disrupting
every aspect of fashion from marketing to implementing technology into the clothing itself as
Jill previously mentions.
Ari Goldberg, CEO of Style caster states “Digital is disrupting the way we shop and we have
a lot more expectations”. Traditionally, marketing in the high brand fashion world was simpler
involving one campaign per season which was put in Vogue or the Financial Times for 4
months. However, fashion is no longer an annual marketing campaign but a constantly active
marketing industry unfolding on real -time across a variety of media-technology platforms.
Consumers voluntarily participate in this marketing process and brands can no longer pause
the conversation (Kansara, 2016). There is simply no one blueprint of marketing to fit all any
longer (Edelman, 2010). All three interview candidates acknowledge this as they discuss the
various different marketing options available to brands, however they emphasise that a balance
still needs to be met between virtual and in-store. Brand’s such as ‘Chanel’ appear not to have
realised this and are investing too much in digital without reducing significantly elsewhere
(Kansara, 2016). While more and more luxury brands are coming to the realisation that digital
capability is a necessity for survival, some brands such as ‘Celine’ are still a major ‘digital
laggards’ as earlier described by Shannon. Creative director of Celine, Phoebe Philo is
renowned for announcing that she would “rather walk down the street naked than join
Facebook”, but she may be forced to rethink her strategy in the very near future.
Due to technology the vast majority of luxury retailers from Burberry to Chanel have adapted
a three-stage consumption model. This involves the customer firstly experiencing a need, they
then shop to fulfil the need and finally the consumer uses the product which they have bought
(Reinartz, 2016). This model is continuing to change due to technology, which is enabling
customers to bring their desired product even closer to how they first perceived it. Therefore,
the perception of their need is what marketers should focus on rather than the actual shopping
experience which is virtually impossible to control (Reinartz, 2016). The above shift has made
shopping become a discreet activity that can be executed at any time or place, this has led the

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traditional value-adding functions of a physical store to be called into question. As Shannon
emphasises shopping online would appear to be taking over more than in-store shopping. This
is reiterated in reports from McKinsey stating that in the last 5 years, online sales has soared to
the point that in 2014 almost all growth in luxury brand sales was through e-commerce. A
report by McKinsey & Company said e-commerce sales in high brand labels reached $14
billion in 2014, this was double the figure from 2013 and this figure is set to triple by 2024
(Kansara, 2016).
As the number of CME’s is set to continue growing, it is vital that stores fully understand the
various different shopping contexts from desktop to mobile, digital to non-digital. One very
current trend is in touchless devices and how customers are likely to use them. Hoffoman and
Novak (1996: 53) define a CME as, “dynamic distributed network, potentially global in scope,
together with associated hardware and software that enables consumers and firms to
communicate and access digital content.” Marketers can use the information from these
devices and the level of ‘fit’ with consumers needs in different marketing environments. Most
importantly with the constantly changing technological environment that high brand labels are
working with, it is important for them to consider how consumers integrate each new CME
technology and products into their daily routine (Yadav & Pavlou, 2014).
De Swaan et al (2014) states the question surrounding every successful marketing strategy is:
“What values and goals guide our brand strategy, what capabilities drive marketing
excellence, and what structures and ways of working will support them?”
It is structure that follows strategy. It is important to note that while technology is a core focus
in marketing, it is not solely about technology alone but rather the expansion of technology-
enabled activities of consumers and organisations in the marketing environment (Yadav &
Pavlou, 2014). Marketing is no longer a detached function of an organisation but extends
throughout the company, touching on almost every function. More specifically the role of a
marketer in recent years has increased; they now must be strategists, technologists, scientists
(Joshi & Gimenez, 2014). In addition, an overwhelming amount of new technologies and
digital marketing has made marketing increasingly more complex when delivering messages
and offers to customers rapidly and at an affordable rate for the company (Joshi & Gimenez,
2014). As David mentions in his interview, team work and not having a rigid hierarchy in
place in Brown Thomas is something they pride themselves in. It is often the breakdown of
collaboration between the various different streams that leads to the overall marketing strategy

41. 35
failing. Findings of the De Swaan et al (2014) study show the top marketers engage their
consumers and staff with the brand purpose, as a result these employees express pride in the
brand label. This is something that will lead them to have a united goal resulting in a cutting
edge customer service. Nike are a classic example of this, the company have a marketing team
whose single job is to tell the original Nike story to new staff entering the company. The
fundamental roles of the traditional marketer is to build the brand label, create a demand,
increase sales and establish a strong customer loyalty.
(Source: Joshi & Gimenez, 2014)
The most success marketers adopt an innovative approach, in which they tie marketing in with
many other variables in the organisation such as finance, sales, IT and do not view them as
separate (Joshi & Gimenez, 2014). Therefore, to deliver the best possible experience for the
customer all employees within the organisation must be involved from the floor staff to the IT
specialists, with all members sharing a common vision for the store. Five key drivers were
formed which are needed to be a leader within the marketing industry;
 Connect marketing to business strategy and the rest of the company
 Inspire through engaging the entire organisation with the brand purpose
 Focus of key priorities of the organisation
 Establish cross-functional teams
 Build on the company’s internal capabilities
(De Swaan et al, 2014)

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Many organisations have made the mistake of using digital marketing as their sole way of
marketing simply because everyone else is and because it is an inexpensive way of
communicating (Winston, 2015). However, unless the marketer lays down a clear strategy
before communicating their plan it is unlikely that their digital plan will be successful. Global
retailer ‘Nordstrom’ are constantly evolving their marketing with their strategic goal to
constantly improve their customer experience. The organisation recognised the increased need
for technology within their marketing such as: CRM systems, data analytics and specialised
soft wear. Traditionally a company’s IT department would have controlled this but this is no
longer the case. Nordstrom have integrated their marketing team with IT analytics to build a
holistic view of the customer, which they were previously not doing. The organisation are
clearly using technology to give them both a competitive advantage and provide their
customers with a flawless shopping experience.
Belk (2013) claims there are five current changes emerging for this digital age which are;
 Dematerialization
 Re-embodiment
 Sharing
 Co-construction of self
 Distributed Memory
Dematerialization refers to our possessions which have become free of physical substance,
these goods often remain immaterial until we choose to source them. For example hard copy
CD’s and DVD’s are becoming a thing of the past and are now held inside digital storage
devices. In relation to the fashion industry more specifically, Burberry have embraced
dematerialization in their Regent Street store which has ‘store of the feature’ this allows
customers interested in purchasing a garment to view more information about how it was made
when they try it on and look in the mirror without actually having to try the physical garment
on (Business Source Complete, 2012). Shannon’s view of dematerization is in line with
Dibbell (2000) theory that this new digital way of doing things is ‘magical, thrilling and
enthralling’. Shannon emphasises that she enjoys the freedom of being left to explore brands
herself and does not enjoy being interrupted by floor staff during a visit to a store. Moleworth
(2012) argues against this, stating that the online shopping experience is a passive and lonely
experience. Many authors however compare the experience of the internet shopper to Charles
Baudelaire’s and Walter Benjamin’s Flaneur embracing the cafes, shops and streets of the 19th

43. 37
century Paris (Lehdonvirta 2012, Molesworth 2012). David Lauren, president of Ralph Lauren
preaches that this type of experience is only possible when luxury brands no longer distinguish
between the online and offline world because they implement technology into all major
marketing ideas (Kansara, 2016). Another example is when a consumer ‘window shops’ for
real goods in the digital world. Denegri-Knott and Molesworth (2010) state that e-bay is a
classic example of this, describing the website as a ‘giant shopping arcade’ functioning to fulfil
the shopper’s desires from virtual to real.
A different perspective has been taken by many other fashion retailers who claim they still
prefer the more traditional approach. Founder of Kith, a top street wear retailer in New York
claims digitalisation has not had any affect on the way consumers shop and that he maintains
that it is still all about the in-store experience (Brakebush, 2016). Kith’s goal is to bring back
the ‘golden era’ of shopping where a shopper would come into a store not fully knowing what
they wanted to buy. This would replace the current experience of hunting out goods which
consumers have already researched every detail about. Fieg hopes to achieve this through his
‘unique in store experience’, where it is not solely about the product you are purchasing but
also the place you are purchasing it in. This view is in line with what David and the marketing
team at Brown Thomas are trying to create. Their vision is to establish a store that goes beyond
the product being purchased through making a ‘one stop for all’ establishment. This they hope
will create a competitive advantage over other stores and is a more traditional approach to
marketing which involves little technological innovation.
The number of touch points of customers has increased significantly with 21 touch points
currently existing (Kansara, 2016). The retailer and customer relationship no longer ends with
purchase but this touch point is often now only the beginning of their relationship, as customers
remain engaged post purchase (Gensler et al., 2013). A deeper connection evolves with the
product as new online touch points are used. This increase in touch points comes as a result
of the growing and constantly emerging number of digital channels available to customers. It
is clear that marketers should focus on the consumer’s decision journey throughout their retail
experience, rather than using a vast amount of finance on media such as, television and radio
Lemke, Clark, and Wilson, 2011). Research found that 70%-90% of expenditure in the
marketing budget is put towards advertising and retail promotions that are aimed at the
customer during the consideration and purchasing stages (Edelman, 2010). This is all relatively
trivial toward creating brand value, if the product receives weak reviews or is not even
mentioned online. This echoes Shannon’s statement, whereby she claims a brand is not about

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the people who buy it but the people who talk about it and pass on messages about it. In
addition, the rise of social media is largely attributable to the growing channels, and an
increased need for specialised digital knowledge. Melisa Goldie, EVP & Chief Creative
Officer of Calvin Klein claims there’s no longer such a thing as a one-way advertising
conversation (Elliott, 2016). Some brands such as Diageo, Google and Nike have recognised
the full extent of this and have their employees trained in various forms of social media such
as Facebook (De Swaan et al., 2014). Research shows that social media has the ability to shape
consumer’s perceptions and their purchase behaviour. Thompson and Sinha (2008) found that
when customers engage with the online community it affects new product adoption. A new
approach to social media is being adopted by brands such as ‘Clique Media’ who are a content
and technology company that works with well-known fashion brand ‘who what wear’
(www.whowhatwear.co.uk). They are a leading online platform in fashion, entertainment and
culture. The company are moving away from publishing their content on the website and social
media sites. Instead, they are publishing unique content directly onto social media applications.
Top experts from Interpublic Group’s Magna Global predict that digital media will far surpass
television as the biggest advertising category by 2017 (Sherman, 2016). Burberry has also
embraced the shift of advertising onto social media applications, when they were the first high
brand label to launch an advertorial on Snapchat’s Discover Channel in April of this year.
While most luxury brands need to partner with editorial publications, Burberry do not. They
are a rare exception to this because wherever they go to platform, they have the power of people
following them. This statement echoes Shannon’s description of Burberry during her
interview.
The journey of the customer must be a smooth and enjoyable experience, this is achieved
through a well-executed plan which has the ability to change a customer’s whole perspective
of a brand. The customers experience involves everything from online social media to in-store
visits. Some brands do this through personalised offers while others place emphasis on the
customer touch points. This would appear to be the case for Brown Thomas as previously
described by David, the company focus on personalised e-mails, feedback and loyalty cards.
The value of these variables should not be underestimated as personalised e-mails can increase
click rate of up to 62% (Yadav and Pavlou, 2014). Nevertheless, findings show that the most
successful brands do both of the above which creates a ‘total experience’ (De Swaan et al.,
2014). This creates a consistent experience for the customer across both the physical and digital
touch points. Two of the most successful brands that keep arising throughout literature for