Cognitive biases in innovation ecosystems: global luxury fashion on the eve of post COVID-19 recovery

Luxury fashion is an innovation ecosystem experiencing great change, and the COVID-19 pandemic has accentuated some of these dynamics. With roots in a traditional industry, certain cognitive barriers impede interaction within the luxury fashion ecosystem. We therefore analyse the factors that drive innovation and technological change through an inductive case study of this specific ecosystem. We identify and analyse six biases within the luxury fashion ecosystem that are affecting the cognitive barriers of the ecosystem. Consequentially, we propose that consumer bias impedes a transition from the traditional luxury customer to a more differentiated consumer. Market-segmentation bias can hinder necessary micro-segmentation to reflect new needs. Product bias obscures possible product innovation due to excessive brand focus. Sourcing bias toward traditional partners slows the move towards sustainability. Second-hand market bias stops fashion brands from fully exploiting circular business models. Finally, ambidexterity bias may block the exploration of new markets necessary following a crisis. Implications for research and practice are discussed, including the need to develop more adaptive and flexible strategies through open innovation that adapts to the phases of recovery from the pandemic.