Technology has already revolutionised the way that global fashion companies do business. The Covid-19 pandemic further cemented the pivotal role technology plays in the industry, accelerating e-commerce adoption among consumers and further embedding digital tools in day-to-day workflows and decision making. Though the focal point to date has largely been on customer-facing technologies, brands now have an opportunity — born out of necessity in today’s volatile operating environment — to expand the breadth and depth of technology application in the industry. Fashion brands and retailers are leaning into technology not only to become more resilient to supply chain and other disruptions, but also to become more responsible and transparent as the world seeks sustainability solutions.
Against this backdrop, we expect fashion companies to ramp up their investments in technology, from between 1.6 and 1.8 percent of sales in 2021 to between 3 and 3.5 percent by 2030. Investors, meanwhile, will pour capital into companies whose technologies aim to make fashion players more nimble and more environmentally and socially responsible. Fashion players that fail to embrace these technologies will face existential challenges, while their tech-savvy counterparts should see measurable bottom-line benefits.
Technology’s impact is evident in key business areas, such as creating exceptional customer experience and engagement; helping to address sustainability issues; and upgrading internal processes and operations. This applies to fashion players across value segments, though the solutions may play out differently for luxury and mass market brands to accommodate varying customer needs and strategic priorities.
This report identifies the business opportunities on which fashion leaders should focus their technology resources and investments, based on executive and other expert interviews, analyses of public and private companies, market intelligence and consumer research. By focusing on these opportunities, the report aims to help leaders look beyond hype and buzzwords to explore how technologies can alleviate real pain points and have a tangible impact on business results.
The report explores five technology-driven imperatives for the fashion industry:
1. Metaverse Reality Check
The marketing value of digital fashion and NFTs may now be clear, but fashion brands will need to separate hype from the concrete opportunities to generate sustainable revenue streams presented by growing consumer engagement with the metaverse.
2. Hyper Personalisation
Brands have access to a growing arsenal of personalisation tools and technologies to upgrade how they customise and personalise their customer relationships. The opportunity for executives now is to harness Big Data and AI to provide one-to-one experiences that build long-term loyalty.
3. Connected Stores
The inexorable rise of e-commerce has forced fashion players to rethink the role of physical stores. Fashion executives can address consumer pain points by using in-store mobile apps to enhance the experience and micro-fulfilment technologies to leverage their physical retail networks for the quick-commerce era.
4. End-to-End Upgrade
Digital tools and analytics have transformed key parts of the fashion value chain, but these optimisations are often siloed within organisations, limiting the potential for cross-functional improvements. Brands should embark on end-to-end value chain integration to create more efficient and more profitable ways of operating.
5. Traceability First
Traceability systems powered by tracking software and Big Data will help fashion brands focusing on sustainability to reach far into their supply chains to understand the entire lifecycle of their products.
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