Value co-creation and Industry 4.0 : A comparative cross-case study of luxury vs. fast-fashion brands

Abstract: Consumers have changed their behaviour from passive roles to active ones, demanding their beloved brands to be integrated into long-lasting customer-brand relationships. With this ideology, which is the basis for the S-D logic, there is an on-going scientific debate on the value co-creation phenomenon and its effects on sustaining long-term brand-customer relationships in the context of the fashion industry. These effects are considered to have the potential to sustain a competitive advantage and affect not only the marketing of the fashion brands, but also other facets of such enterprises, including their value and supply chains. Additionally, the world has been experiencing a steep increase in technological innovation under the name of Industry 4.0, where machinery and human labour become integrated into smart systems and consumers have the ability to influence parts of brands which were not available before. Within this context, the interest of this research is to explore the value co-creation phenomenon in relation to the I4.0 dimension in the setting of two generic business models characteristic of the fashion industry (luxury vs. fast-fashion). In exploring the interconnectivity of these two phenomena, this study takes on the digital strategies of Burberry, Louis Vuitton, UNIQLO and Zalando, and assesses their co-creative processes targeted towards their consumers. In doing so, this study is also aiming at identifying the approaches of the chosen brands towards the I4.0 dimension and its relevance towards the process of value co-creation. In order to illuminate the co-creative processes within the digital strategies of the selected brands and to accomplish the research goal, this study takes on a comparative cross-case study methodology synthesising secondary data on both value co-creation and I4.0 as separate phenomena. The secondary data on the digital strategies of the selected brands is used within an existing model called “the Co-creation mix” which assesses the co-creative processes of the brands based on six different criteria: co-creator, purpose, locus, intimacy, time, and incentives. Interpreting the secondary data through such a model resulted in the identification of two different approaches to co-creation and I4.0. The findings indicate that the luxury case companies approach co-creation from a traditional marketing perspective where digital consumer engagement is the main co-creative process, whereas the fast-fashion case companies initiate co-creative processes designed to accomplish goals that are more supply-chain related. This result also brings several intriguing implications. First, the fast-fashion case companies are more technology-driven and are more open towards the implementation of innovative I4.0 technologies within the co-creative processes than the luxury case companies. Second, the consumer role in the co-creation process seems to become less central the more the I4.0 dimension is involved. Third, the model shows that the fast-fashion examples outperform the luxury examples at the dimensions where the latter perform the weakest, such as intimacy and time. And fourth, the study findings confirm the new research opinion that both industry segments have weak areas which can be handled by taking on a mix of the two identified approaches, rather than focus on the traditional one alone. Yet, these findings are not generalizable but only illustrative, meaning that the study provides plausible hypothesis and future research directions concerning value co-creation and I4.0 within the fashion industry context.