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JThe pandemic has accelerated the digital shift in the fashion industry, with the advent of online shopping, virtual devices, even social shopping as well as the advent of the meta-verse. And that’s just the beginning. A new report reveals that fashion players will double their investments in technology by 2030 to optimize the customer experience and respond to the challenges of climate change, with personalization, connected stores, new digital worlds and sustainability as key axes.
2020 has been a crucial year in terms of digital engagement. The pandemic has had a major impact on time consumption in front of screens, which has risen sharply, especially among the youngest, and has changed consumers’ shopping and interaction habits, which are increasingly geared towards social networks, games and new virtual worlds. And key players in the fashion industry, in all segments, from fast fashion to luxury, take notes and multiply projects and initiatives based on technological innovation. Online shopping, live shopping, NFTs, digital fashion and virtual try-ons have shaped the shopping habits of customers from many brands and fashion houses. Fashion brands even experimented – perhaps a little too soon – with the possibilities offered by the first Metaverse Fashion Week in March last year.
While these transformations already appear to represent significant shifts in the industrial landscape, they may simply be the forerunner of a true fashion revolution, as a report by McKinsey and The Business of Fashion suggests. Fashion companies are expected to invest significant, if not record-breaking, amounts in technology in the near future, which will increase from around 1.6-1.8% of revenue in 2021 to 3.0-3.5% in 2030, almost doubling in less than a decade. These figures underscore the importance of brands integrating technological innovations, starting with artificial intelligence, to help “support sustainability, as well as create a unique customer experience”, the report emphasizes.
Embedding digital processes, personalization and sustainability
In their “State of Fashion Technology” report, McKinsey and The Business of Fashion outlined areas where the fashion industry needs to act to “maximize its technological resources”. The meta-verse, through NFTs and digital mode, tops the list, but the analysis emphasizes an important point: “The marketing value of digital mode and non-fungible tokens (NFTs) may now be clear, but fashion brands will have to differentiate concrete opportunity from hype to generate sustainable revenue streams. “
While brands are rushing into these universes with a seemingly endless stream of initiatives to win over young consumers, several studies show that this demographic is not yet fully convinced. The goal for brands will be to target initiatives that will make a difference. “Fashion companies that focus on metavers’ innovation and commercialization can generate more than 5% of the virtual company’s revenue over the next two to five years. However, the task of decision makers will be to focus on specific opportunities.”
It could also go through an increasingly personal experience, using artificial intelligence in particular to improve the relationship between brands and their customers and to build their loyalty. It could start with online shopping, but would, according to the report, continue in stores with the aim of offering increasingly connected physical locations. “Fashion managers can solve consumers’ pain points by using in-store mobile apps to enhance the in-store experience and micro-execution technologies to leverage the store in an age of fast-paced commerce,” experts say. The general idea is to reduce the gap between physical and virtual stores and make them complementary.
Technology will also need to be made more available for more sustainable and transparent fashion, in response to more demanding consumers on these issues. “Traceability systems powered by traceability software and big data will help fashion brands penetrate deep into their supply chains to understand the entire life cycle of their products.”
Whether they are dedicated to creativity, craftsmanship, sustainability or the shopping experience, technology will be an integral part of consumers’ fashion shopping process in the not too distant future. The question now is how brands will put them into practice.
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