The Business of Fashion and Mckinsey & Company just launched a special edition of The State of Fashion focusing on technology. This report explores how tech is impacting fashion, the key needs that brands and retailers have to embrace, and the business opportunities on which fashion leaders should focus their technology resources and investments.
Technology has been revolutionising the way global fashion companies do business and the Covid-19 pandemic further accelerated the role of the technology in the industry. Technology’s impact on the Fashion industry is noticeable and investment in technology is expected to grow from 1.6%-1.8% of sales in 2021 to 3.0%-3.5% by 2030. In some key business areas, the impact is even more evident, from e-commerce adoption among consumers, developing a better customer experience and engagement, implementation of digital tools to increase efficiency and resiliency in day-to-day operation workflows, and to decision making.
“As technological innovation accelerates, fashion companies have an opportunity to serve customers better while also creating a more efficient, responsive, and responsible business.”McKinsey & Company
Fashion companies and retailers that fail to embrace the investment on technologies will face substancial challenges, while their tech-savvy competitors should see measurable benefits.
As companies target digital opportunities, they will look to the hyper personalisation by investing in AI modelling and Big Data to increase customer loyalty through a one-to-one personalised shopping experience. This will drive customer acquisition rates and sales increase.
Brands and retailers will also leverage technology to bridge the gap between online and offline channels to augment the omnichannel customer experience. In-store mobile apps for store associates can offer a frictionless way to serve customers, while in-store customer apps engage customers and result in more time spent in store.
Bain & Company estimates that more than 85% of luxury purchases are digitally influenced. Stokedge unique technology and algorithms allows brands and retailers to correlate sales with digital visibility and how online activities impact their sales performance.
“E-commerce and social media are increasingly where shoppers now encounter products, a fact that has altered the relationship between brands and retailers.”Business of Fashion
Behind the scenes, technology is set to have a huge impact on internal processes along the value chain, from design, to range & assortment, to purchasing & sourcing, demand forecasting, supply chain &logistics, to operations, to pricing & promotions, to store & sales optimisation. Fashion executives believe integrating digital processes throughout their organisations will be among their top-five areas for digitisation as they look ahead to 2025. The benefits include increased speed to market, full-price sell through rates, as well as lower operational and manufacturing costs.
Digital connectivity of the supply chain & logistics is important in another key area for fashion, such as sustainability. Brands should consider joining forces with start-ups to share data and knowledge via software platforms, open ledgers and Big Data technologies.
Stokedge can play an important role in supporting brands and retailers, by converting massive global market data into simple, objective and unbiased metrics allowing to make better informed and more efficient decisions at all time.
“Executives should be prepared to address potential resistance to working in a more connected way, one in which data, and knowledge, flow across processes seamlessly.”Business of Fashion
The operational potential of technology is becoming even more strategic. McKinsey analysis shows that fashion companies that are using AI into their businesses models could see a cumulative increase in cash flow of 118 percent by 2030. On the opposite side, those that are slower to invest in digital technology could see a 23 percent relative decline. Over the next three years, potential key areas in which fashion executives could make digital investments are personalisation, store technologies, and end-to-end value chain management—areas in which digital can make a real difference to performance.
If you want to know how Stokedge technology can improve your brand or retailers value chain, contact us at firstname.lastname@example.org.