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Tech and Fashion's Fight Over Talent Has Only Just Begun

The industry battle is heating up

Two months ago, former Burberry CEO Angela Ahrendts assumed her much buzzed-about position as Apple's new Senior Vice President of Retail. The 54-year-old fashion executive moved to the tech giant after filling her resume with brands like DKNY and Henri Bendel. Taking to her LinkedIn page to update the world about her first few weeks on the job, Ahrendts noted, "Silicon Valley can feel like a country unto itself!"


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While Ahrendts might seem like a fish out of water jumping from one exclusive world to another, she's just one of several fashion natives who've recently left the industry for tech-ier pastures. Earlier this month, Apple confirmed they hired Patrick Pruniaux, who was Vice President of Tag Heuer's global sales and retail, to launch Apple's top-secret smartwatch in October. That news came the day after the company announced they'd hired Yves Saint Laurent CEO Paul Deneve to work with Apple's CEO Tim Cook on special projects. And back in March, Google poached marketing exec Ivy Ross—who's worked for Gap, Calvin Klein and Coach—to run their Google Glass operation.

In what experts are calling "a war for talent," the fashion and tech industries are aggressively competing against one another for new recruits. It's not hard to see why: These two seemingly disparate worlds have become increasingly intertwined over the last decade.

"There's always been a talent crisis in the fashion retail and luxury sectors," says Karen Harvey, whose NYC-based recruitment firm has been responsible for prominent hires within the fashion industry, bringing Rebekka Bay to Gap and Laurent Potdevin to Lululemon. "What the war previously looked like was Calvin Klein, Donna Karan and Ralph Lauren competing for the top talent. What's happened in the last three years is the tech sector has moved in."

What Was the Tipping Point?

Harvey says the tech industry's interest in fashion professionals comes on the heels of successful companies, like Rent the Runway, Birchbox and Gilt, emerging from the new "fashion tech" sector. Not only have these businesses caught the eyes of venture capitalists who've helped them raise billions of dollars, they've done something tech companies have been unable to do: made technology sexy. With aesthetics being as important as the gadgets themselves these days, tech execs are plucking fashion powerhouses in the hopes they'll bring their taste with them.

"Right now, the objective in the tech industry is to make the product beautiful," Harvey adds. "Not everyone can make a product like Steve Jobs, and even he couldn't make accessories for his tech products. If he were with us today, he might bring on someone like Angela."

Harvey expects luxury fashion brands will start pulling tech professionals onto their teams too. At the beginning of the digital age, brands hesitated to get involved with e-commerce and mobile shopping; concerns about watering down the luxury experience halted companies from digitizing. While many sites still aren't as shopable as they could be— shopping for Prada shoes is easier on the Saks Fifth Avenue site than it is on Prada's, and designer Isabel Marant doesn't even list her prices online—experts believe many of these companies are having second thoughts.

"Fashion brands are working out a balance right now," says Sarah Willersdorf, a principal at the Boston Consulting Group. "Obviously they put creativity and aesthetic above everything, but affluent consumers increasingly want to shop online, so they have to merge their creative side with their commercial side. I do expect there will be more shopability through tech in the future."

Not only has the hesitance of luxury brands to embrace technology allowed companies like Net-a-Porter and Gilt to dominate the e-comm space, but they're now faced with a brand-new information landscape. Revolutionary data and analytic tools that can provide real insight into consumer behavior leave them with no choice but to seek help from the tech world, Harvey notes.

"We still get big questions from fashion clients about whether they should have e-commerce, how to structure their digital intelligence, if digital should be part of marketing, should they have bloggers," she says. "With analytics of such sophistication, they have no one sitting in their companies who knows what to do with the data or how to integrate it. The fashion sector needs to be more strategic and must understand the data enough to get information from it—that's when the recruiting from the tech world happens."

Fighting for the same consumer is another reason fashion and tech are in the midst of a battle. "Luxury goods" has a broad definition today: Are shoppers saving money for a new gadget or a Chanel purse? The answer is they're often interested in both, but often must choose one; this can be a problem for fashion brands when customers are picking up a new tablet for Christmas instead of a posh handbag. When BCG surveyed consumers about which brands they aspired to own items from, the top three answers were Apple, Sony and Samsung. Trailing behind a whole list of fancy car brands, consumers then listed Chanel, Dior and Armani.

A Battle for Skills

There are also specific talents the fashion and tech industries want to learn from each other and claim as their own. From the luxury fashion perspective, employees at tech companies possess an impressive procedural skill set their companies could most certainly benefit from. "Technology companies have skills that make them the best in class, and not just from the front end," Willersdorf says. "They've created sophisticated logistics for inventory and amazing systems to track products when products are just steps out of warehouses."

On the flip side, luxury fashion companies are the best in the world at protecting and elevating their brand image—a strategy that the tech world is eager to implement. While people are already waiting on long lines for Apple's new products, everyone in Silicon Valley (Apple, included) wants to learn the marketing secrets that make fashion brands so coveted.

"Luxury brands have done an amazing job at creating desire for their product, either by limiting supply or marketing the lifestyle," Willersdorf continues. "Luxury marketing is unique and very strong, and tech companies are seeking the ways they can build that for themselves."

Last year former Burberry executive Marcella Cacci told the Wall Street Journal that this was the exact reason Apple hired Ahrendts, noting that "luxury executives understand branding and consumer demand quite well." Last month, Google X's Astro Teller admitted to USA Today that they needed someone like Ross—a fashion expert who understands why consumers are drawn to wearable products—to sell Google Glass.

"Retail isn't one of our strong suits, and someone like Ivy can, more than a technologist, really help us understand how people experience eyewear, because in the end this is just smart eyewear," Teller said.

While the tech world might seem like "a country unto itself," as Ahrendts put it, one look at the industry's salaries and it's easy to understand why prominent talent would make the switch. Data on Glass Door shows people in the tech world are paid significantly more than those in retail: an entry-level job at Sony pays $65,000 while one at Tory Burch pays $46,000. A project manager at Facebook makes an average of $109,500, while one at Ralph Lauren makes $75, 692. And according to a salary report of Harvard Business School graduates, bonuses in tech are 100 percent higher than those in retail; a median signing bonus in retail is $10,000, while the median signing bonus in tech is $20,000.

What About Leaving Tech for Fashion?

If the pay contrasts are so striking, why do experts believe fashion companies will be able to successfully recruit techies? It can all come down to the quality of life.

"The big tech companies coddle employees with food, laundry and transportation, but that's only because they assume you're too busy working to have basic life needs taken care of," says Casey Kolderup, a software engineer at Racked's parent company Vox Media. Kolderup was formerly employed by Gilt and says that even though most fashion companies can't compete with salaries like those at Google, other perks—expense accounts, exclusive access to fancy events, luxury discounts—make working at non-tech companies appealing.

Ten years ago, young engineers coming out of school only wanted to work for tech giants, Kolderup explains. Now the attitude has changed, and the new crop of talent would rather work somewhere they can get noticed, whether that be a big-deal luxury brand looking to build a small digital team or a buzzy fashion startup.

Erica Bell and Katie Finnegan, founders of the fashion-tech company Hukkster, agree that the benefits of getting noticed at a small company outweigh working for a tech behemoth—a position that helps them compete against the Twitters and Facebooks of the world when they're hiring.

"Our team is small, so you can have an impact," Bell says. "If you have a suggestion, it can be implemented and seen live really quickly. That's really different than working at a place where there's a hierarchy of decision makers."

And as Kolderup adds, "Of course there's a certain prestige that comes with working at a big tech company, but there's also cachet and mystique to working in an industry like fashion. It was cool to do something different and to not be surrounded by dudes all the time."

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