Scott Galloway on Breaking Up Big Luxury | Inside Fashion

The Business of Fashion Podcast

The Business of Fashion

Fashion & Beauty, Business, Arts

4.6 • 770 Ratings

🗓️ 29 May 2020

⏱️ 56 minutes

🔗️ Recording | iTunes | RSS

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Summary

The bestselling author and business professor offers his insight into the challenging market and M&A landscape that industry players of all sizes have to navigate.

Scott Galloway is no stranger to expressing views as provocative as they are incisive. The author, business school professor and serial entrepreneur has a lot to say about the state of the market in the era of Covid-19, but his observations and predictions are also, crucially, grounded in wider social, political and economic arguments — whether that’s the now-untenable position of American exceptionalism, the burden of student debt or the failings of intergenerational wealth distribution. Speaking in conversation with Imran Amed, Galloway shares his thoughts on the state of the luxury sector, importance of e-commerce and the indomitable power of Amazon, a company he describes as “firing on all 12,000 cylinders” yet still can’t crack the fashion market. Here are some of the key takeaways:

“The class of IPOs that will come to the markets in the next 3-6 months will boom,” said Galloway. “I think the markets are going to accelerate but people conflate the markets with the economic health of america. The markets are nothing more than an indication of how the top decile of Europe and America are doing.”
Amazon’s tricky relationship with fashion and luxury is hard to reconcile. “Amazon partners with an industry the way a virus partners with a host,” he said, which explains why luxury brands have traditionally kept the e-commerce giant at arm’s length. Even with the remarkable acceleration of e-commerce in the past eight weeks, however, Amazon’s algorithmically driven retail model does not allow for the forward-looking trend cycle on which the fashion industry operates.
Luxury is a relatively well-positioned industry. “The majority of sectors in the world would pray for luxury’s problems right now,” he said, but much like big tech companies, conglomerates in the luxury space create “an unhealthy environment where too few players are allowed to [accrue] too much power... if you wanted to oxygenate the economy around luxury you would go ahead and break them up.”

Related Articles: The New Normal: A Darwinian Shakeout Will Create Fresh Opportunities For Luxury, an Acceleration of the Inevitable Case Study: The Next Wave of Luxury E-Commerce Sign up for BoF’s Daily Digest newsletter here: http://bit.ly/BoFnews.

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Transcript

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0:00.0	We used to be the nation that would bring the world out of something like this.
0:07.0	Now we seem to be the nation that is keeping it there.
0:11.0	How do you think the luxury and fashion industry is going to be impacted due to shifts in consumer preferences and behavior?
0:18.0	Just as it's happening in every sector, the strong are going to come back even stronger.
0:22.2	The culling of the herd benefits the elephants that survived because when the rains return, there's
0:26.4	more foliate.
0:30.7	Hi, this is Imran Ahmed, founder and CEO of the Business of Fashion and welcome to the BofF podcast.
0:37.3	This week on Bof Live, I sat down with
0:40.2	Scott Galloway, the award-winning best-selling author of multiple books, professor of marketing at Stern
0:47.1	at New York University, and the founder of L2 Inc, red envelope, and profit. Scott has this unique,
0:57.0	quite honest and direct way of answering any question that's thrown at him and we covered the full gamut in this conversation. From a macroeconomic
1:02.3	discussion around the economy and where it's going to its impact on retail, consumer behavior,
1:08.2	and even education, Scott has an excellent perspective that's worth listening to.
1:13.1	Here's Scott Galloway, Inside Fashion.
1:22.3	Hello, everyone. This is Imran Ahmed, founder and CEO of the Business of Fashion. I am still in London in lockdown.
1:30.4	But as usual, we are connecting with our favorite thinkers, commentators, experts, and analysts
1:37.6	all around the world for BOF Live.
1:41.2	Today's guest is someone that I have actually known since the very, very early days at
1:47.6	BOF. In fact, Scott Galloway was the first person to ever tell me that I should turn
1:53.4	BOF into a business. And we worked together a little bit when he was starting the company L2,
2:00.5	which recently was acquired by Gartner. I wish I'd taken his advice a little bit when he was starting the company L2, which recently was acquired by Gartner.
2:03.1	I wish I'd taken his advice a little earlier and maybe taken a little bit of his investment,
	...

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