Up until now, the wider leather industry has responded well to delivering strategic and tactical changes. While these processes and marketing innovations are vital, so is getting to grips with product innovation; making the new leathers needed to excite consumers once again, to keep leather relevant.
Let us not forget that only one firm out of the Dow Jones index made it through from the beginning to the end of the 20th century and it was not U.S. Leather, one of the largest of the founding 12. Missing key inflection points where innovation was required – horse transport to automobiles, loss of the sole leather market and the rise of chrome tanning – were all part of its decline.
Today’s environment is also changing rapidly, with new substitutes from plastics and biomaterials, more power than ever being held by misguided customers, and raw material suppliers that are struggling to offer meaningful support. Those who know Porter’s Five Forces will have seen the storm brewing.
Consequently, we have to look hard at our products and recognise the danger of product obsolescence. An ability to make classic and traditional leathers is important in many sectors, but fashion, footwear, furniture, interior design and luxury must also reflect contemporary and future thinking. It is not only about fighting the competition of other tanners and new materials, but also competing in new and developing sectors.
Are we killing our industry with inertia?
There is quite a lot of evidence that, while we fight to stop those mis-selling materials using illegal and confusing terminology, we are becoming trapped by our own definition of leather. Are we killing our industry with inertia? Radically re-conceiving products has become important and might involve redefining our market space or redrawing industry boundaries. I am not convinced that all hybrid or bio-based materials are the enemies of leather, nor that the vegan market should be totally ignored, albeit the horizon for creative innovation has to be far wider than that alone.
Anyone that watched the early years of the Internet will remember the influential essay The Cathedral and the Bazaar written in 1997 about the chasm between secret skunk works innovation and a collaborative approach. In the last few weeks, we have seen two leather industry approaches to more open innovation being publicly announced.
The biggest leather chemistry supplier, Stahl, announced via a remarkably interesting series of online presentations given in collaboration with ACLE a new open framework of collaboration with the public, as well as with companies and institutions, to create new products.
They say they intend to implement strong onboarding processes and an open innovation portal “to facilitate efficient and secure collaborations while allocating resources efficiently and protecting our intellectual property”. This is important.
When I developed a new product for a U.S. golf business, when consumers sent in new ideas, they went unopened to our in-house lawyer, as often the idea was obvious or one we were already working on and the author was making a business of being paid not to start an expensive legal process.
This looks to be a very positive move building on the fact that the digital and ESG areas have accelerated over the past year opening up whole new opportunities for collaboration. Their presentation on digital adoption is well worth watching.
The leather industry has been supplier dominated for the past 70 years so to see a separate innovative approach coming from the tanning industry is exciting. Certainly, there is a lot ongoing in tanneries that we do not see as it is hidden inside well-established customer relationships.
Since Ecco Leather has footwear as its lead, but far from only business, they are less bound for such a need for privacy. They have recently ended their 14th Hot-Shop where they bring together creatives and designers from around the world. This year they tell us that the focus was on the future of natural materials and addressed the application of leather and non-animal materials in “unexpected and unconventional adaptations”.
“We want to lead the way in changing how the materials industry works and focus our energies on research and innovating processes,” says Ecco CEO Panos Mytaros. “For us, this means making radically innovative leather in cooperation with the creative community.”
They had as a theme “hypothesis”, aiming at challenging the perception, use and performance of leather and say the concepts and leathers that came out of the four-day leather festival, with 80 designers present, did indeed challenge this with leather proposed for integrated electronics and as a construction material in buildings.
When Karl Toosbuy, the founder or ECCO, started the tanning section he was quoted as saying: “Tanners do not understand the technical requirements for leather used in shoe making and cannot meet delivery dates. Furthermore, they have failed to acquaint themselves with the needs of the shoe manufacturer or the end consumer.”
While the new ECCO approach seems a long way from this simple vision, I have no doubt that he would see the current approach as perfectly aligned with a determination to be a leader in innovation, adapting to meet (and lead) the requirements of a fast-moving world. He would be excited, too.
September 15, 2021
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