Seattle based Bag Borrow or Steal, which raised $8.25 million Series B funding this week, is a great example of “cross-pollination innovation.” The company utilizes the Netflix subscription model to loan a wide variety of designer bags to consumers for cost efficient enjoyment. Monthly subscription pricing depends on the quality of bags selected and ranges from $19.95 a month to $99.95 a month for the most expensive and exclusive bags in the collection. The company, founded in 2004, has several thousand members. A wide selection of jewelry and watches is coming soon.

[thanks, VentureWire]

Another custom product design opportunity: O’Neil offers consumers the opportunity to design their own wetsuits and boardshorts via the company’s website. A custom boardshort costs $70. Extremely radical, and appropriate for all shark rides!

[thanks, Brooks Lambert]

As a supplement to my suggestion to Gap that they offer a way for people to design their own apparel, I have discovered several companies that are offering customized product opportunities.

Two behemoths in the shoe industry, Nike and Reebok, have both recently launched sites that allow consumers to customize shoes. The Nike ID and RBK Custom websites allow you to choose a basic shoe type and select colors, patterns etc. Cool!

Snowboard product company Burton also allows consumers to design their own board. You can choose from almost any board in their current lineup, select from 13 graphic themes, and have a message printed on the base. Retail price: $900. [Thanks, Scott Kobayashi]

Another interesting company that’s gaining traction in the consumer designed product space is Zazzle.com. The Company is backed by Kleiner Perkins Caufield & Byers, and allows you to create your own stamps, t-shirts, and customize other products. According to Forbes, since the site began promoting itself in July, sales are up six-fold, and Zazzle expects to turn a profit on $20 million in revenue this year.

Creative product designers can also create and sell goods via Goodstorm.com, a company that ships the product, and collects the money for independent creators. What makes Goodstorm different from Zazzle.com is that they specifically target non-profits and donate a portion of its profits to charity.

The Gap is one of America’s great companies, and sales are declining, despite an innovation effort to rejuvenate the brand. I have consulted in strategy and consumer insights for Gap brand (Gap, Inc. also owns Old Navy and Banana Republic), so I have to be reasonably tempered about what I say, but I have some thoughts on Gap brand’s direction (based on publicly available information).

There was an interesting front page story in the WSJ last week about Gap and its huge initiative to renovate stores. Gap sent a whopping 20 employees around the world in search of inspiration for innovative retail concepts and although the new store design is a great improvement, chalk boards in the jeans area, friendly employees, darker floors, couches outside the dressing areas, higher quality display tables, and bold colors on the walls don’t “wow” me.

A part of Gap’s new, defining mission is to enable individuals to express their personal style. Building on this theme (William Morris and CAA, here’s an idea for you to sell to Gap) select celebrities could create their own product lines and Gap co-branded marketing campaigns, and sell their product in little boutiques within the store and online. Another idea: there could be a section on the Gap website, and computer terminals in stores, where customers can design their own t-shirts (ie pick out colors, images, text etc.) This type of democratization for creating individual style, which is facilitated by technology, is the future, and Gap should embrace it now!

Innovative store features and an “emotional” store environment will only go so far, of course. Obviously, the store’s product is number 1, and I’m not particularly in touch with the latest trends and styles, so I’m not going to talk about that. But, I can talk about its television advertising, which Gap relies heavily on to drive store traffic. The television ad spot is losing marketing power, as a result of ad skipping technology (I may be talking about innovative marketing strategies - Gap is experimenting with a viral website - watchmechange.com, for example), but Gap ads have been uninspired for years, and even hurtful to its brand image — with respect to men — and this is going to take time to change.

When I consulted for Gap, there was much discussion about how to fix the declining men’s business. Meanwhile, Sarah Jessica Parker was all over television praising the color pink, and singing about how wonderful it is to be a girl! I know many guys that agree with me in thinking that this kind of advertising does not entice us to shop at Gap! The Gap’s “singing and dancing” ads have played way too long, and I’m truly thankful that Gap is allegedly starting to move away from that.

This picture of the remodeled Stanford Shopping Center store was taken a few days ago. The outside of a store is not as important as the inside store experience, but a vibrant outside can be a magnet for traffic.

Imagine if they had billboard type video image panels above the windows in those blank white spaces on the wall. This technology may still be relatively expensive, but I’m not talking about HD plasma quality video. The displays also don’t have to be used across the entire store fleet, but just top performing stores.

Levi Strauss announced yesterday that the company is introducing RedWire DLX jeans in the fall of 2006, which will have an iPod dock built into a side pocket and a joystick control on the outside. Another innovative feature will be an integrated retractable headphone device, so wires won’t get tangled.

[Thanks, MacDailyNews]