The Spanish Fashion Industry: Business Model Innovation

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The Spanish Fashion Industry: Business Model Innovation

Business model innovation is associated with the development of an essentially new approach to building business processes and commercializing a companys products. Thus, in the context of this concept, a business model itself but not a product or service becomes subject to innovation (Spieth & Schneider, 2016, p. 672). Still, although the orientation toward the business model innovation can provide a company with a variety of opportunities for growth and customer attraction, it is rather difficult to change an existing model to innovative one (Binda & Merlo, 2019). Thus, the selection of business model innovation is viewed in the literature on the topic as a challenging shift to an advanced model associated with changes in the culture, beliefs, and values.

During recent decades, the fashion industry in Spain has developed according to the principles typical of the fast fashion business model. Thus, Spain is viewed as the cradle of fast fashion that contributed to revolutionizing the fashion industry in the 1990s (Binda & Merlo, 2019, p. 2). When this model appeared, it was considered as the business model innovation because of its contrast to traditional ready-to-wear fashion.

The key promoter of the fast fashion model in Spain is Zara that belongs to Inditex, an international clothing company. Thus, from the 1990s till the first part of the 2010s, the fast fashion model was actively followed by Zara, Mango, and Desigual as the leading brands in the Spanish fashion industry (Miranda, 2017). In this context, fast fashion means the mass production of the most fashionable clothes that become quickly available in stores, and collections are usually changed bi-weekly (Binda & Merlo, 2019). There are limited numbers of unsold items, and the key focus is on fast logistics to remain a trendsetter in the industry. In comparison to Zara, Mango and Desigual have no resources to change collections bi-weekly, but these brands still follow the fast fashion business model.

In the late 2010s, business model innovation for sustainability became considered as a new direction for the development of the fashion industry in Europe, including Spain. As a result, the fast fashion model became replaced for some brands into a slow fashion model (Inigo, Albareda, & Ritala, 2017; Todeschini, Cortimiglia, Callegaro-de-Menezes, & Ghezzi, 2017). According to Inigo et al. (2017), slow fashion is associated with creating collections twice per year, producing durable clothes, and minimizing negative effects of clothes production on the environment.

In spite of the fact that brands and companies that built their competitive advantage referring to the fast fashion model cannot easily shift to slow fashion, they modified their models to make processes more sustainable (Todeschini et al., 2017). In this context, sustainable business models are those which integrate economically relevant sustainability concerns with business success or competitive advantages (Inigo et al., 2017, p. 516). Additionally, the focus should also be on adjusting production processes to decrease waste and promote recycling.

The example of applying the sustainable business model innovation by Zara is most actively discussed in the literature on the fashion industry in Spain. Zara is interested in decreasing its effects on the environment while minimizing clothes items in stocks, decreasing waste, innovating production processes, and reducing the carbon footprint (Todeschini et al., 2017).

Thus, Zara became an example for other fashion brands in Spain to concentrate on the eco-efficient concept and promote the companys responsibility referring to social and environmental pillars along with an economic one (Blazquez, Henninger, Alexander, & Franquesa, 2019; Todeschini et al., 2017). From this perspective, Zara and other brands of Inditex adopt the idea of the business model innovation referring to a specific new sustainability-driven business model that is more advanced than fast fashion.

The development of the business innovation models in the context of the Spanish fashion industry is also connected with the progress of e-commerce. Spanish brands are successfully distributed not only through stores but also with the help of websites. Researchers explain customers interest in e-commerce with reference to the possibility to save time and resources in the context of high trust toward brands (Binda & Merlo, 2019; Escobar-Rodríguez & Bonsón-Fernández, 2017).

According to Escobar-Rodríguez and Bonsón-Fernández (2017), if consumers have trust in an online seller, they expend less effort on searching for information about the online seller and on executing the online transaction (p. 605). Therefore, for Zara and Mango, the focus on selling items online is as effective as selling in physical stores because of customers high interest in products and their desire to buy items at lower costs.

The literature examined on the topic of business model innovation in the Spanish fashion industry indicates that Spanish companies tend to move from the idea of fast fashion models to more sustainable innovative business models. In some cases, the adoption of slow fashion models is not efficient for large fashion companies in Spain. Therefore, such brands as Zara and Mango, for example, modified their fast fashion model approach to make it more sustainable. Additionally, the focus is also on environmentally friendly and sustainable e-commerce.

References

Binda, V., & Merlo, E. (2019). Trends in the fashion business: Spain and Italy in comparison, 19732013. Enterprise & Society, 1, 1-31.

Blazquez, M., Henninger, C. E., Alexander, B., & Franquesa, C. (2019). Consumers knowledge and intentions towards sustainability: A Spanish fashion perspective. Fashion Practice, 1, 1-21.

Escobar-Rodríguez, T., & Bonsón-Fernández, R. (2017). Analysing online purchase intention in Spain: Fashion e-commerce. Information Systems and e-Business Management, 15(3), 599-622.

Inigo, E. A., Albareda, L., & Ritala, P. (2017). Business model innovation for sustainability: Exploring evolutionary and radical approaches through dynamic capabilities. Industry and Innovation, 24(5), 515-542.

Miranda, J. A. (2017). The country-of-origin effect and the international expansion of Spanish fashion companies, 19752015. Business History, 1, 1-21.

Spieth, P., & Schneider, S. (2016). Business model innovativeness: Designing a formative measure for business model innovation. Journal of Business Economics, 86(6), 671-696.

Todeschini, B. V., Cortimiglia, M. N., Callegaro-de-Menezes, D., & Ghezzi, A. (2017). Innovative and sustainable business models in the fashion industry: Entrepreneurial drivers, opportunities, and challenges. Business Horizons, 60(6), 759-770.

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