Shifting sands: How technology is changing the face of fashion in 2024
Rewind to the year 2000, and you wouldn’t be able to imagine a world in which virtual changing rooms, mobile apps that give you styling recommendations, and lab-created, sustainable materials, will become a reality. Look no further than the National Retail Federation Expo 2024 held earlier this year – retailers showcased some exciting new technologies including AI shop representatives, tech that provides product recommendations based on psychological profiles, and AI that monitors which foot traffic results in more conversions. Today, these technologies are shaping the world of fashion from thread to finished product, while molding the way consumers approach fashion.
It’s quite clear that as technology zooms ahead, the fashion industry must rush to keep pace. Last year, we published a fashion tech trends report in collaboration with Fashinnovation and featured perspectives from the Americas Apparel Producers’ Network (AAPN). This blog will reflect on the trends featured in the report, while providing a snapshot of what the year holds for the fashion industry, the shifting demands made of it, and the technologies that are stepping in to enable each industry segment.
Setting the stage: The external environment and key tech-driven fashion trends
The McKinsey Fashion Trends Report 2024 predicts a year of uncertainty for fashion, stemming from sluggish economic growth across the globe. The report mentions that inflation and waning consumer confidence are set to impact the industry significantly. In the US, it’s forecasted that the non-luxury segment will grow by a meager 0 – 2 %, while China will do marginally better at 4 – 6%. Statistics also reveal that operational costs for fashion businesses will continue to escalate, driven by rising wages, material, utilities, shipping, and logistic costs.
One key trend in the fashion industry is the call for better visibility and sustainable processes. Today, fashion businesses are hyper-aware of every aspect of their supply chains. Business leaders are continuously assessing their supply chains to optimize it with technology. As interest in recyclable fashion continues to grow, businesses are also looking to provide consumers with better insights on how their garments were produced. Moreover, businesses are considering how they can make better use of AI, leverage automation beyond simple workflow simplification and instead utilize it to enhance the work of humans.
Let’s take a closer look at the technologies that are shaping the industry.
Fashion industry automation trends
Automation in the world of fashion is not limited to the intervention of machinery alone but includes digital solutions that streamline internal processes like inventory management, barcode printing, and effective deliveries. Finance automation is another good starting point for fashion businesses as finance teams engage in repetitive, time-consuming tasks like invoice processing and reconciliations. Automation can step in and transform all aspects of the fashion industry by improving manufacturing processes, enhancing efficiency, and reducing production costs.
In Bangladesh where the garment industry accounts for more than 80% of the export revenue, 80% of factories are planning to invest in automated machines in the next two years. This percentage will only continue to increase. Technologies like 3D printing, robotic sewing, AI-driven design tools, and automated inventory management contribute to faster production cycles and increased sustainability. Additionally, automation enables more personalized and on-demand manufacturing, aligning with the industry’s shift toward sustainable practices and customization.
A few other areas that automation supports include:
Fashion manufacturers:
- Precision cutting and sewing: Automated cutting and sewing technologies ensure precise and consistent results, minimizing errors and material wastage.
- Inventory management: Automated systems help manufacturers keep track of inventory in real-time, optimizing stock levels and reducing the risk of overstock or stockouts.
Fashion wholesalers:
- Order processing: Automated order processing systems enhance speed and accuracy, improving the efficiency of handling bulk orders from retailers.
- Dynamic pricing: Automation facilitates dynamic pricing strategies, allowing wholesalers to adjust prices in real-time based on market conditions and demand fluctuations.
- Supply chain visibility: Automated tracking and monitoring tools provide wholesalers with better visibility into the supply chain, reducing the likelihood of delays and disruptions.
Fashion retailers:
- Point of sale (POS) systems: Automated POS systems streamline transactions, providing faster and more secure payment processing for customers.
- E-commerce integration: Automation facilitates seamless integration between physical stores and online platforms, ensuring a consistent and efficient omnichannel experience for customers.
Fashion on the Cloud
Migrating to the Cloud can help fashion businesses easily scale their IT infrastructure based on demand, accommodating seasonal variations and business growth. Cloud platforms also enable seamless collaboration among team members, designers, and stakeholders, allowing for real-time sharing of designs, inventory data, and other crucial information.
Cloud technology also ensures faster time to market accelerating development and deployment cycles, enabling fashion businesses to bring new products to market faster and respond quickly to changing trends. It also facilitates the implementation of e-commerce platforms, enhancing the online shopping experience for customers with faster load times, reliable performance, and seamless transactions.
Here’s a closer look at a few other industry segments and how Cloud technology supports them.
Fashion manufacturers:
- Supply chain visibility: Cloud technology enhances visibility across the supply chain, allowing manufacturers to track inventory, and monitor production.
- Security: Cloud providers often implement robust security measures, safeguarding sensitive fashion designs, intellectual property, and customer information.
Fashion wholesalers:
- Inventory management and supply chain visibility: Cloud-based solutions improve real-time visibility into inventory, helping wholesalers manage stock levels more effectively and reduce the risk of overstock or stockouts. It also provides enhanced visibility across the supply chain, enabling better coordination and responsiveness to market demands.
Fashion retailers:
- Personalized customer experiences: Retailers can leverage cloud-based data analytics to understand customer preferences and deliver personalized shopping experiences, improving customer loyalty.
Data in the driving seat
Neiman Marcus is a fashion retail giant with a century-long experience in the industry. In the past, their customers predominantly shopped in-store. But as interest moved to online shopping, the company tapped into data to monitor customer preferences, re-market, and narrow down on the most popular platforms through which their customers were directed to the site. This analysis has helped the retailer allocate more resources to the platforms that are popular among their customers. Many fashion businesses like Neiman Marcus have put data in the driving seat – here’s how it is propelling others in the industry:
Fashion manufacturers:
- Demand forecasting and planning: Data analytics enables manufacturers to analyze market trends and customer preferences, aiding in accurate demand forecasting for different styles and products.
- Supply chain optimization: Manufacturers can optimize their supply chains by using data analytics to track inventory levels, streamline production processes, and reduce lead times.
- Quality control: Data analytics helps in monitoring and analyzing production quality, identifying defects, and improving overall product quality through data-driven insights.
Fashion wholesalers:
- Inventory management: Wholesalers can use data analytics to track inventory turnover, identify slow-moving items, and optimize stock levels to meet customer demand efficiently.
- Customer segmentation: Data analytics helps wholesalers understand customer segments, tailor offerings, and implement targeted marketing strategies to enhance customer satisfaction and loyalty.
Fashion retailers:
- Optimized merchandising: By analyzing sales data, retailers can optimize product placement, assortment, and pricing to enhance the shopping experience and maximize sales.
Conquering the industry with artificial intelligence
Artificial intelligence has been causing ripples across the industry with its ability to revolutionize the supply chain from start to finish. While a significant number of businesses have already experimented with AI, many others hope to ride the wave sooner rather than later. Nike has been leading the way since 2018 – the company uses the Nike Fit App to help consumers find out their shoe size. It uses computer vision to get a sense of the customer’s foot size and thereafter uses this data for future purchases and suggests suitable products as well.
Other fashion businesses are using artificial intelligence in:
Fashion manufacturers:
- Predictive analytics: AI helps manufacturers forecast demand, optimize production schedules and reduce excess inventory.
- Design assistance: AI assists in creating innovative designs by analyzing trends, customer preferences, and market data.
Fashion wholesalers:
- Supply chain optimization: AI enhances supply chain efficiency, ensuring timely deliveries and reducing logistical costs.
- Dynamic pricing: AI algorithms analyze market trends and competitor prices to adjust pricing strategies dynamically, helping to maximize revenue.
Fashion retailers:
- Personalized shopping experience: AI recommends products based on customer preferences, purchase history, and browsing behavior, enhancing the shopping experience.
- Virtual try-on: AI-powered AR applications enable customers to virtually try on clothing items before making a purchase.
- Chatbots for customer service: AI-driven chatbots provide instant customer support, answering queries and assisting with purchases, improving overall customer satisfaction.
A holistic solution
Adopting one or more of the technologies mentioned above might sound practical but digital transformation provides a holistic solution that will help revolutionize traditional processes, from design to consumer engagement. It fosters agility by integrating technologies like AI and data analytics for trend forecasting, inventory optimization, and personalized marketing. E-commerce platforms and virtual try-on experiences redefine the retail landscape, enhancing customer interactions. Supply chains benefit from digitization, becoming more efficient and responsive. Digital transformation helps to adapt swiftly to market changes, deliver personalized experiences, and optimize operations, ultimately ensuring competitiveness and sustainability in the dynamic world of fashion.
……….
Fast forward to the year 2040 – can you imagine what the world of fashion would look like? Given the pace of technological change, it’s difficult to imagine but it’s clear to see that technology will continue to dominate and define the industry. This is why the digital transformation of your fashion business can start with a step in the right direction this year.
Read our 2024 fashion-tech trends report to learn more about what to expect this year and how to be best prepared for a future of change.
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