Category Archives: Operations

The Need For Speed

Written by Áslaug Magnúsdóttir, co-founder and CEO of Moda Operandi for The Business of Fashion.

When founding a company, one of the most important decisions you will make is how and when your company grows. Growing a young company is not an involuntary, linear process, like how a baby grows. Growth tends to happen in sizeable, step-up increments, like a set of stairs, based upon deliberate decisions you and your team make. The key is to balance careful planning with speed of execution.

The implications of this tricky balance are multiple and very real. Do you “get it right first,” subordinate growth to perfecting your product or service, or do you “get big fast” and shun polishing the decks while it’s full speed ahead?

As you will hear me say often, there is no right solution to this kind of puzzle. But as co-founder of Moda Operandi (M’O), I mulled this balance carefully and decided I needed to “get big fast.” I saw an opportunity for M’O to be first to market with our unique “pre-order luxury goods” concept and I knew that meant aligning myself with key people and companies to help me do it quickly and cleverly. In short, I felt the need for speed was a critical competitive advantage that outweighed hoarding equity and control. This decision had significant implications for how I thought about taking on a partner, where to raise financing, and how much. And since, 16 months later, M’O remains the only store in the business with our dedicated pre-order model, this decision has turned out to be one of the most important I’ve made for the company to date.

TO PARTNER, OR NOT TO PARTNER

One of the first decisions to make when you come up with a business idea is whether to do it alone or with a partner. You have probably heard that entering into a partnership around a company is like entering into a marriage, and it is true. Partnerships, like marriages, are exciting because the whole is greater than the individual parts and together amazing offspring can be born. But also, like marriages, partnerships require work and compromises and they have real costs. Decision-making and control is shared; equity and wealth potential is diluted. So just like getting hitched on a whim in Vegas is not necessarily a great long term idea, you shouldn’t pick a partner unless you think you need to. And if you do need to, make sure that person is kick ass.

I knew Lauren Santo Domingo, my co-founder, would be the perfect partner. Why?

    • Lauren got it immediately (Warning: if you have to explain the concept twice, it’s probably not a good fit.)
    • She added to it immediately (i.e. “We should do this as well, we should call them as well,” etc. Her complementary experience was apparent from the get-go.)
    • She threw herself into it immediately (“When do we start?” No dilly-dallying, this was a partner who wanted in yesterday, already.)

After our first chat about it, I knew there was nobody else I wanted as a co-founder of the company. But we can’t all be this lucky. And taking on a bad co-founder can kill your business before it is born. So here are a few things you need to think about when making the decision about partnering-up or going solo:

    • Is there a sizeable hole in what you bring to the table (skills, relationships, experience, etc)? If yes, would that void be better filled via a partner, or a contractor, consultant or temporary hire? In short, do you need a partner?
    • Do you generally prefer to work in teams or alone? Put bluntly: can you have a partner? (What does your significant other think? Always a good reality check.)
    • Is the scope / complexity of your business idea robust / complicated enough that you need a partner during those crucial initial months? In other words, does the company need a partner?
    • Is the size of your business big enough to support an additional partner? Can all mouths be fed? Can your company support a partner?

Divorce is a mess, not least because it will really slow you down. So only pick a partner if you need to. And if you need to, pick someone who will help you get there faster and smarter. The last thing you need is the old ball and chain.

INVESTOR EXPECTATIONS

Investors are your friends. They give you money, you build cool things, consumers spend money, everyone is happy. However, there are different kinds of investors and each has pros and cons. Specific to speed to market, here are a few things to consider:

    • Angel investors are typically more flexible and hands-off, but often lack industry expertise. They are your rich uncle who ponies up cash and wishes you the best, but doesn’t really want or know how to help you do your thing. This is not always the case — some angels are brilliant and available — but this is what you should anticipate.
    • Venture capital investors (VCs) typically have deeper pockets, can provide good advice and resources, but require a lot of control and hand-holding. They’re professional money makers, so understandably, they want to know what the hell you’re doing. This can be a good thing but it also takes up valuable time. Again, there are exceptions, but this is a general rule.

The key point: if you believe you need to get your company to market now, make sure you match your expectations with those of your potential investors. You may not have the luxury of options. But you don’t want to take on an investor who wants you to get it right first, when you’re focused on getting big fast.

HOW MUCH MONEY IS ‘ENOUGH MONEY’?

Another common question I am often asked is, how much money should I raise and how quickly should I raise it? Fundraising is painful and time consuming. Some founders prefer to raise just enough to get something to market now. On the other hand, some founders prefer to go the extra mile and aim for a bigger raise so they won’t have to suffer through the process all over again in just a short while. There are pros and cons to each approach.

At M’O, we went the extra mile. While we were fortunate enough to have some seed money to get our proof of concept going, we parallel-tracked the fund raising process in full swing until we secured our first round of venture capital. Grabbing market share was critical. We had to build the car while driving it down the highway.

This may not always be the right decision. A young company might be better served in its early days focusing its attention on perfecting the product rather than on fundraising. And depending on the economic environment and the appetite of the investment community, raising more early on might mean giving up more equity to investors than if you wait. But you probably will need more money than you think. And it is always good to stash away cash today for a rainy day tomorrow, like a sudden downturn in the market or the unexpected arrival of a formidable competitor.

During our latest fund raising, I had a meeting with a Chinese businessman, one of the most successful retail tycoons in the world. He said, “You guys are hot. Everyone is talking about M’O. Raise as much money as you can now.”

The point? If capturing market share is of the essence, raise as much money as you can now. Having too much money is a good problem, even if it means dilution, giving up control and sharing the throne. But get to market. Raising all the money in the world means nothing if you aren’t open for business.

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The Business Plan Is Your Roadmap

This article is a blatant copy and paste job from The Business of Fashion but upon reading it I thought it was such golden information I had to drop it here for future reference.

Written by Áslaug Magnúsdóttir, co-founder and CEO of Moda Operandi.

NEW YORK, United States — Early stage entrepreneurs often ask: is a business plan really that important or can you get away without one?

The quick answer is: yes, it’s really that important, and, no, you cannot get away without one. If you’re looking to third parties to raise capital, they’re understandably going to want to see a plan for what you want to do and how their money is going to be spent, with some very specific topics addressed along the way.

Certainly, there are exceptions to the rule. Friends and family sometimes just want to fund your business no matter what, or maybe you’ve found an angel with such an understanding of your concept that a plan isn’t necessary to get the checkbook out. My partners and I at TSM Capital sometimes invested in fashion brands that did not have business plans, but did have management teams with very clear ideas about growing the business. But even in those situations, our first order of business was always to sit down together and map out a plan. A business plan, at its core, forces the entrepreneur to clearly articulate the business in writing so that the entrepreneur, key team members and investors all stay on the same page in terms of product, strategy and financial expectations.

In short, you’re most likely going to need a business plan to get funded. And if you’re lucky enough to get funded without one, you’re still better off having one as it will serve as a roadmap for your early months.

So beyond wanting exceptional management to be pioneering a high margin, scalable business that takes advantage of an exploding industry trend, what else are investors looking for in a business plan? Here are a few general rules to keep in mind in terms of the presentation of the plan itself:

Be brief. Professional investors like short business plans, generally no more than 10 pages and certainly no more than 20. Remember that you are catering to a short attention span, since these people see lots of plans. Get in, make your points and get out. Yes, there can be exceptions: The investor deck for Moda Operandi’s last round of financing crept up to nearly 70 pages, since we had multiple investors with numerous requests, and, thankfully, we ended-up being oversubscribed. But honestly, what do you accomplish with 70 pages that you can’t with 20?

Be visual. If a picture is worth a thousand words, in a business plan, a picture might be worth a million dollars. Your goal is to make sure your potential investor understands and is focused on the beauty of your concept and good graphics help convey good ideas. I learned this the hard way: an ex-lawyer and a McKinsey alum, I drowned M’O’s first business plan in a sea of microscopic data, lists and charts with very few pretty pictures. One investor, gasping for air, (who, fortunately, did come in on our Series A) asked whether I came from McKinsey’s German office! Your business plan needs to let investors breathe so they can digest what is going on. I now always balance key data with gorgeous visuals, and I have a brilliant art director who helps create this precise aesthetic.

Be numerical. As you might imagine, financial investors are particularly focused on — you guessed it — the finances. Not only do they want to see financial projections, they want to see these same financial projections twisted and contorted into a baffling array of numerical analyses: P&L projections, cash flows, unit economic analysis, customer acquisition costs, customer lifetime value analysis, conversion funnels, etc. At the risk of jeopardizing the brevity point: the more numbers, the better.

If you want to stick to the 10 page rule, below is a framework that works for most businesses:

Page 1 – The Team. Either start with “The team” or “The summary of the concept” (see Page 2 below). I like to start with The Team because when you’re presenting to investors in person, it makes sense to introduce everyone at the beginning of the meeting. The goal is to give investors a quick summary of the experience you and your team bring to the table. Don’t spend more than a minute on this when presenting.

Page 2 – Summary of the concept. Here you want to give the big picture about your concept before diving into details. For example, at M’O, this was a description of an “online trunkshow service that sells luxury clothes and accessories to consumers immediately following their presentation during fashion week,” plus a couple of other points.

Page 3 – The problem you are trying to solve. This is critical. Why is there a need for your business? What real problems does it solve? What voids does it fill? Investors are going to love to debate this one with you so make sure you really drill down to the specific value add your business provides. M’O example: “Customers can only purchase a small percentage of a designer’s overall collection at traditional retail and often only in a limited number of sizes.”

Page 4 – Your solution to the problem. What is your solution to the specific problem? How does it benefit the various stakeholders (customers, businesses etc.) M’O example: “M’O consumers can order any item from our designers’ runway collections in any size the designer offers, from the privacy and comfort of home.”

Page 5 – The size of the opportunity. This one is also critical. You want the bread baking in the oven and wafting over to the dinner table. While some investors are willing to invest in strategic but financially “small potatoes” opportunities, most VCs are looking to invest in businesses that have the potential to generate hundreds of millions of dollars in revenue. So you need to research and quantify the opportunity and then paint a picture that tells it clearly (and aggressively), i.e. a top down analysis of how big the market is to how big a share your company will take.

Page 6 – Your competitors. Who else has tried to solve the specific problem, or a similar problem, and how have they done it? What makes you unique versus them? How do you position yourself versus them?

Page 7 – Why will your concept succeed. Time to peacock. Why are you good? What is your competitive advantage? What assets — IP, expertise, contractual rights, relationships, technology etc — do you possess that will allow you to demonstrate success? You want to show off here anything that is unique or superior. Don’t be bashful.

Page 8 – Your marketing and customer acquisition plan. Assume in the beginning that you are unlikely to have a significant marketing budget. How are you going to get the word out there about your business without breaking the bank? Think PR, partnerships, customer relationships, social media, etc.

Page 9 – Five year financial projections. Full disclosure: no one has a crystal ball and it is unrealistic to create a perfect (or even near perfect) five year plan for a completely new business. Investors know this, too, but they want to see how YOU think about growing the business; whether you’re really in it to win it. There is no right answer to how you shape these financial projections. Different entrepreneurs have different approaches, ranging from being aggressive (fearing investors will deflate the numbers anyway) to under promising and over delivering (hoping investors will appreciate a conservative tact). Bottom line, the numbers need to look attractive but achievable. You need to show them the money. And if you can’t, then why are you launching this business?

Page 10 – Next steps. Take a deep breath, you’re almost done. Let them know quickly where you are in terms of the product, the team and your timing. “Next steps” is less about what’s on the page and more about how you talk around it: that this is a huge opportunity for investors, that other investors are interested, etc. Remember that fundraising is like dating: honesty is important but go slow. Don’t reveal all of your quirks and flaws on the first date, it is up to the other party to discover those attributes over time. By that point, hopefully both parties will be in love.

 

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Money Tower of Needs

We’ve all heard of Maslow and his tower of needs. Something I penned down today after a conversation with a business owner was my interpretation of the financial needs of a business and it’s owners & stakeholders.

It’s not perfect, but thought it was worth sharing all the same.

Enjoy. EF

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The Apple Marketing Philosophy

Today I am simply going to let this picture talk for itself. There is something in this for any business in the game of selling products. Whether it be clothing, technology, ball bearings, you name it.

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Starting Out

I recently caught up with a young model looking to develop his personal brand with a line of mens underwear in Australia. with the product, packaging, distribution, and first shoots all done and everything ready to roll out, what was left was the finances, and the management thereof, for the business.
Thinking about our conversation I thought that it would be worth sharing some points discussed for anyone out there looking to add some entrepreneurial zeal to design talents. The points below are simply my thoughts on where to start. The very foundation of your finances and business operations / admin. They are by no means exclusive and may vary depending on the legal requirements of certain geographies.
So here they are:
1) What functionality you need from your finances?
Don’t need to know 100%, but have a think. Will you have employees, do you need iphone syncing from your records, cloud based etc… What do you want from them? From there you can look at the type of system that matches your requirements – i.e. Xero vs. MYOB vs. another bookkeeping system.
2) Test.
Play with the software. Both MYOB and Xero will have demo versions you can trial. Check out the look and feel. You need something that makes sense to you. Your Accountant will understand whatever you give them. Importantly you need to know whats going on. Like driving a car you need instruments and dials that talk to you about whats happening at the high level so you can make decisions.
3) Your Account List. 
Your Accounts List is the list of assets, liabilities, income, expenses, and equity within the business. This is the foundation of your finances and like any foundation if you get this solid from the start you’ll be kicking goals. Your Bookkeeper, Accountant, and of course yourself will be able to inform this. Your chosen bookkeeping software should be able to build this account list for you during the setup process. You can then send it to your Bookkeeper/Accountant for feedback and build something tight.
4) Filling in the details. 
This will be everything from your business details, supplier details, customer details, inventory items, setting up the details in the books etc… to your requirements. I would think most of this you could sort out yourself. It’s fairly simple, but of course White Sky or I could help here. This will be a pure data entry exercise. Takes a bit, but if done right it will make your books and business admin simple, efficient and effective.
5) Business Planning
Looking at the income and expenses in the business and analysing cash flow over a period (say the first 12 months) to see what happens if X, Y, and/or Z occurs. What you’re looking for here is choke points. We’re worried about the downsides. See what they could be ahead of time. Know what they are, then monitor via your books to see how your tracking. This way you can see ahead of time whats going on. This can be as simple or as in depth as you like. If you’re starting out it may just be a high level analysis saying ‘OK I’ll need to sell X units to break even in Y months’ etc…
6) Processing, Reporting, and Admin
How will you monitor, process, and report on your business activity going forward. At the very least you’ll need to cover all your legal, tax, and other compliance obligations. You may not need to know how you’re tracking in ‘real time’, but at the very least having tight control over a) who owes you money, b) who you owe money, c) your cash flow, and d) your profitability.
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A Different Premium Brand Strategy

After you spend years investing to build an aspirational brand, a competitor launches a new clothing brand or perfume and your customers disappear to buy the new new thing. The luxury and fashion industries are full of such stories.

Luxury and fashion have been playing this aspirational model forever. It works like this: I am not part, but would like to be; because I want to be recognized as a rich and important person, I buy a Gucci’s bag, Prada’s shoes, and so forth. To aspire and be recognized is part of being human.

But the aspirational branding strategy is intrinsically risky, because it is so exposed to consumers’ fashion hypes and downs. How can a luxury business stand apart from the aspirational crowd?

Let me present a successful case in Europe and parse out the managerial lessons. Loro Piana sells both exclusive wool and cashmere fabrics and its own branded clothes. An six-generation-old Italian family business, the company’s sales have grown from €243 million in 2000 to €478 million last year, despite two deep recessions. Loro Piana is distributed globally in 22 countries and operates 135 retail stores, most of them directly owned.

The company’s mission is to sell excellent products made from the best sources of raw material (wool and cashmere). Over the years, the company has been able to scout in remote areas of the world the best raw materials, building local sustainable ecosystems and preferred access to breeders.

For example, Loro Piana has been working with the vicuna from the mountainous steppes of South America for many years, culminating with the animals saved from extinction thanks to a project developed with the support of Peru government and the local community. By acquiring 2,000 hectares in the Andes, the company is establishing a natural reserves to further protect these animals. The vicuna produces the finest fiber capable of being spun with an average diameter of only 12-13 microns against the 15 microns of cashmere. Thanks to its preferential access and local community bonds, Loro Piana buys 85% of Peru’s production.

Another example is baby cashmere, a fiber the company obtains from the undercoat of young Hircus goats in the remote Gobi desert in Mongolia. Loro Piana works smoothly and sustainably with local nomadic Mongolian goat herders and has set up a local Mongolian company to manage the process of baby cashmere sourcing to be closer to the local nomadic community.

For Loro Piana, success depends not only on its ability to build competitive advantage through access to the best raw materials, but also on its sophisticated marketing skills and ability to use its exclusive raw material access for its branding. Baby Cashmere and Vicuna are now prime Loro Piana labels, associated by clients and consumers with product excellence. The company uses a very limited advertising budget compared to other fashion houses, mainly focused on promoting local ecosystems and stories of raw material excellence. The company does nearly no advertising on clothing lines or what aspirational brands usually do. In contrast, Loro Piana wants to be hidden.

Over the years, thanks to its obsession for sourcing and product excellence and sophisticated marketing, Loro Piana has become a classic of elegance. Its branding consumer’s perception is the opposite of aspirational. This brand and strategic positioning preserves them from the hypes and downs of fashion brands. Business is more stable, less cyclical, with lower advertising investment requirements — and, as a consequence, very profitable.

Do you have a plan for you brand on how to become a classic and shy away from the aspirational crowd?

This article is sourced from the Harvard Business Review blog and was written by Alessandro Di Fiore. Alessandro is the CEO of the European Centre for Strategic Innovation, based in Milan.

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Why the hell T&Cs matter?

When it comes to things that are universally treated with the utmost of distain Terms and Conditions must be up there with dodgy used car salesmen, telemarketers at dinner time, and someone openly copying your latest season designs.

Yes, T&Cs can be a pain in the rear, but they can also save you a world of pain or (in this case) embarrassment. A shinning example was a recent Slurpee promotion by 7-11 in Australia. 7-11 recently invited customers to bring their ‘own cup’ in a one-off promotional event. Never underestimate the ingenuity of people to cheat the system…

Admittedly 7-11 have not lost in this circumstance. You could actually play to it quite cleverly to score traditional media coverage for the price of a gallon of Slurpee juice… It is however a classic case of why T&Cs need to be given the attention they deserve.

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Copying Zara: Utilising Zara’s Strategies to Grow a Young Fashion Business

Zara’s expansion globally, and in particular entry in to the Australian market, has fuelled speculation that the fashion game is changing. Businesses not ready to compete with Zara will be wiped out as customers flock to refresh their wardrobes every fortnightly ‘Z-Day’.

If you are one of these businesses, or looking to enter the market, all may not be lost. Perhaps there is even something you develop from Zara’s model.

Today EF is looking into some simple things that a young fashion label, or even a mature fashion business, could execute relatively simply to acquire some of Zara’s secret sauce. EF has investigated three cogs with the Zara machine that could apply to your business.

1) Vertical Integration = Creative Control. Creative control = Adaptability.

It is nothing new to hear that Zara, and its parent company Inditex, operate within an almost fully integration production, distribution, and supply chain. From “The Cube” in La Coruña, northern Spain the company can co-ordinate global logistics with military like precision.

But what this really breeds is adaptability and all the positives that can bring. Ability to change if you got it wrong, responsiveness to trends, cost reductions throughout the business etc…

Now you might not have the financial firepower to simply build your own vertical integrated system overnight, but you do have you. What I mean by that is use you to foster adaptability in your model. You can do this with trust. Earning the trust of your suppliers, distributors, and other parts in your production, sales, and distribution chains can give you flexibility when it counts. We all know of the things we have done for friends, but would not do for strangers.

2) Become an Intelligence Agent

Through a complex yet fundamentally simple system designers in The Cube can receive almost real-time data from Zara’s ~2,000 stores worldwide. This information primarily comes from staff on the ground talking to customers and using simple, yet extremely effective and efficient technology to communicate this intelligence internally. This intelligence then drives adaptability, informs logistical decisions, and so fourth.

Clearly most young fashion businesses lack the capital to build such technical systems. But there are three things to consider here. First of all the goal. The goal is to obtain the best quality information from your customer base and staff as possible as quickly as possible. The second is you may not need technology per-see to achieve this. If your business is a small operation a face to face solution with some key questions may be the answer. The third is, most of the technology is either a) free, or b) relatively in-expensive. For instance you could utilise an ipad/laptop at the point of sale to jot down answers to 5 key questions that submits the answers automatically to a Google documents form.

3) Know who you are and stick to it. 

A point to remember with is that Zara has a highly optimised model for them. I emphasise ‘for them’. Lightning-fast, locally-targeted designs are Zara’s specialty. Since inception in 1975 it has taken Zara the best part of 25 years to build their model, but what has surely helped in this journey is knowing from the very start what they were aiming for. If you are not sure what your goals are take some time out to figure them out. Do what you must, then tackle them with conviction.

In closing, I want the emphasise that simply trying to copy everything Zara does is not the simple answer to building a modern-day fashion powerhouse. But you can certainly learn from their mechanics. The key will be to utilise their principles, but optimise it your way.

For an interesting expose on the Zara machine and it’s impact on the world of fashion check out this video from Australia’s ABC network.

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Evolving with the times

Globalisation is nothing new to the fashion industry. In fact it could probably be said that it was one of the first industries to exploit the specialisation of particular parts of the world to trade silks, fine jewellery and other pieces of antiquity. For decades manufacturing has been switching largely from West to East as relatively cheaper labour could execute the ‘low-value’ side of the production cycle, while the more ‘high-value’ design and creative processes were retained in the country of origin.

Technology is now poised to disrupt the production cycle yet again. The disruption largely yet to be felt is that around what economists call global labour market arbitrage. Put simply this is where you can engage someone or some company, somewhere else in the world to perform the same task that you would at home, for a fraction of the price. Manufacturing has been doing this for decades, but the true disruption yet to come will be in white-collar and professional occupations.

Already sites like freelancer.com allow one to engage a designer, copywriter, strategist, technology provider, and other services to perform their respective actions remotely at a fraction of the domestic full employment cost. Setup similar to an auction site freelancer allows you to post a project, review quotes from suppliers, the reputation, feedback and history of suppliers, allocate budgets and milestones for your project and process payments.

All of that is great for a fashion label looking to update their website, build an iphone app, or craft some fresh copy for their SS launch, but what are the longer term implications? Thinking about it, it means that the people conducting the operations of your business in the next few years may have to compete with someone in the second and third world who can achieve the same outcome as them, hold the same qualifications, and potentially have a higher service ethic. What there is the potential (and I say ‘potential’ as this is not some kind of dooms-day prediction) for a reduction in first world incomes should labour markets not adjust accordingly. Reduction in incomes means less spending power. Less spending power means less money spent in the world of  fashion. Yes clothing is an essential item, but that $1,500 handbag can probably wait.

What would such a world mean for particular players in the fashion industry. Brands with a global presence will be able to exploit and leverage changes in discretionary spending as wealth transitions around the globe. Brands unable to escape the confines of their home boundaries (especially in the west) will most likely feel the strongest effects. Especially if there have not carved themselves a well-defined and serviced niche in the marketplace.

Australian strategist and author Mike Walsh is exploring such a world. Mike’s latest book Futuretainment encompasses the traditional forms of media and entertainment and reveals how the rise of the internet, mobile devices, social networking, audience networks, user generated content, ubiquitous networks and the ‘adaptive web’, amongst other advances, has affected them forever. Futuretainment explains how consumer behaviour has combined with new technologies to enact these changes. The opportunities provided by the digital age for new ways of accessing and providing information have been embraced across the world and diverted the course of media. Entertainment and broadcasting are now in the hands of the consumer, rather than the media executive.

Whether the impact of this will threaten western labour markets is yet to be determined, but what is clear is that the world is changing, and change can mean with opportunity or ruin. In the natural world natural selection takes care of the problem. History shows the business world and that of fashion is no different. How can you make sure your brand and product is selected to evolve and not be left behind?

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The Connected Continent

It is no surprise that the internet is now a part of every day life in and outside of business. What began as simple websites and directories has evolved with cheetah like pace to an essential service. But is this really only the tip of the iceberg..?

Deloitte Australian and Access Economics explore the growing impact of the internet on the Australian economy in their September 2011 report The Connected Continent. Although the report seems to have been commissioned and funded by Google, the overarching themes seem well worth taking note of.

Its getting bigger…

The report attempts to quantify the direct contribution of the internet to the Australian economy. The result is an astounding $50 billion (with a ‘B’). That puts it roughly on the same contribution level as Retail and Education and Training. Both of which are at $53 billion. However by 2016 the contribution of the internet to the Australian economy is set to expand to 70 billion.

There is still plenty of room to grow

The report illustrates that internet usages between 2007 and 2010 has doubled in Australia. With further advancements in technology infrastructure rapidly rolling out (i.e. NBN and smartphones), it is only natural that software continues to evolve to further impact traditional retail models. Already Tissot customers can utilise augmented reality to see and feel how a watch fits them. Technology may expand to the point where it threatens traditional brick and mortar boutiques. How the client service of a boutique would be delivered digitally is yet to be answered?

Australia is warming to e-commerce

Analysis of online shopping in Australia imply that this purchase method will grow at 11.2% annually to 2016. That is roughly three times fasted than total economic growth. What does this imply? Convergence of consumption. Increasingly technology evolution will have people  shopping away from ‘traditional’ retail in favour of online options. The key to physical retail success will come through an offering beyond price. An experience that no technology can supplant. Finding what exactly that is for a fashion label will be key.

For those with a fetish for charts and all things economics, the full report can be downloaded through Deloitte Australia.

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