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Will Companies with the Best Software Lead Fashion?
Guilaine Jean-Pierre | Apr 9, 2015
Title: Contributor
Topic category: Business of Business
Fashion Currency
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Former Gucci Board Member and founder of the Fashion Technology Accelerator in Silicon Valley Enrico Beltramini believes technology will replace products, brands and financial strategies as the key source of value creation for fashion companies.

In an Op-Ed Piece appearing in The Business of Fashion in March 2014 Beltramini lays out an argument that in the near future, the equity value of fashion companies will be based, not on how many products they sell, but on the quality of their software. Technology will not replace the aesthetic appeal of great products, the magnetic attraction of great brands, or the advantages of extended portfolio assets, because the fashion industry will continue to build great products, brands and businesses as it has done successfully in the past. But technology will, indeed, replace products, brands and financial strategies as the key source of value creation.

Successful fashion companies like Nordstrom, Neiman Marcus and Burberry can now process gigantic flows of information and operate their businesses based upon software-driven intelligence. They base their businesses on the economic exploitation of data rather than capital, which makes them more effective. Indeed, equity value is flowing towards software technology and the ability of companies to organize and exploit granular information to drive intelligent decision-making through things like collaborative filtering and predictive analytics. Companies that embrace software enjoy a market cap several times those of fashion companies which are brand- or product-driven. Case in point: Zalando, the European online retailer founded in 2008, has a valuation of $5 billion, greater than the valuations of Versace and Moncler combined.

But to be clear, there is no contradiction between the survival of traditional sales channels, like physical stores, and the emergence of software-driven decision-making. In fact, technology might just be what keeps traditional stores alive.

To read this article in its entirety, please select this link: http://www.businessoffashion.com/articles/opinion/op-ed-companies-best-software-will-lead-fashion

Tags: Business of Fashion, Gucci, Fashion and Technology, Software and Fashion, Enrico Beltramini
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