The fashion industry is starting to fray, according to a recent article in the Wall Street Journal. As the story explained, "Consumers' newfound freedom to customize their lives -- from burning their own music CDs to publishing political commentary online -- is throwing basic business models of many businesses into disarray."

The story goes on to explain that fashion designers, apparel makers and clothing retailers are all facing new pressures as fashions rapidly change and customers mix and match items. It becomes ever more difficult, in this environment, to reach scale economies or to roll out a seasonal line.

This is just the beginning. Similiar trends are starting to affect the automotive industry, according to the Economist . "About half of the industry is regularly incapable of earning a decent return on its invested capital," the magazine explains. "Although it still accounts for about a tenth of economic activity in rich countries, it has been virtually shut out of stockmarkets for the past 20 years, accounting for a mere 1% of total market capitalisation."

With this in mind, it will be vital to the industry's future to move toward new "build-to-order" models and track customer demand with increasing precision.

"As consumers become more choosy, the market is fragmenting into a bewildering array of niches," it states. "As a result, car manufacturers are struggling to make their assembly lines flexible enough to produce, say, roadsters in the morning and pick-ups in the afternoon. But as the market fragments, flexibility alone may not be enough. Smaller production runs, smaller factories and new ways of assembling cars are likely to be needed as well. Henry Ford could one day be history, to borrow one of his own famous put-downs. Economies of scale alone used to dictate the industry's shape, but changing markets could be more conducive to smaller, less capital-intensive companies."

The challenge for enterprises in the coming era of fragmented fashion will be to anticipate the particular priorities and decision criteria of their prospective buyers. This will require powerful new investments in customer intelligence and intelligent communication. We've seen tremendous innovation and improvement on the supply side of business in recent decades. Now, it is time to turn our attention to the demand side.