The digital disruption of the apparel industry from manufacturing to retail is being driven by virtual reality, 3D modelling, artificial intelligence and voice technology. So to be successful into the future, companies along the supply chain must embrace these new tools to better connect with consumers.
“Some very dramatic changes are taking place in how retail is being done,” Rahul Mehta, president of the Clothing Manufacturers Association of India (CMAI) and past president of the International Apparel Federation (IAF), told delegates at the latter organisation’s recent 34th World Fashion Convention in Maastricht.
In fact, the very definition of retailing is going through change, he adds, with the retailer no longer acting as a physical link between the manufacturer and the ultimate consumer. Instead, manufacturers can sell through portals like Amazon, or direct via their own websites.
But the one constant seems to be that “whether online or offline, whether through an intermediary or direct, the consumer is looking for some kind of an experience when shopping.”
And retailers are increasingly turning to technology to help. With artificial intelligence (AI) offering greater capabilities behind the scenes, and customer-facing solutions such as virtual ‘try-on’ technology on the rise, retailers are feeling the pressure to “continuously experiment” in a bid to keep the consumer’s attention.
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“Technology is the driving force behind everything we see at the moment,” says Jorgi Abraham, managing director of the Ecommerce Foundation, a community for ecommerce professionals that aims to facilitate global digital trade. “It really is changing our world, from manufacturing to retail – and consumers are changing as a result. For us, the challenge is to compete in an entirely new market on a global scale.”
But it’s not a case of simply rolling out virtual stores. “That’s just copying the old model onto a new technology,” Abraham says, explaining the success of ‘magic mirrors’ – which allow consumers to virtually ‘try on’ clothes, and can offer advice on complementary styles – is down to the fact they add value to the shopping experience.
Meanwhile, the influx of personalised subscription offerings means today’s customers don’t even need to know what they want: they can simply rely on companies such as Stitch Fix, which combines Netflix-style algorithms with human intuition and curation, to recommend products they are likely to enjoy.
“We’ve only now really found the drill to get the big data out of the ground and really use it,” Abraham says. “You see it happening: artificial intelligence is used to personalise customer experiences, to better align delivery routes. It’s used throughout the entire supply chain, the entire sales process.”
But while AI has the potential to enable retailers to sell in a better way, perhaps the biggest disruptor is voice technology. With one-in-two US consumers using voice technology today, and voice shopping expected to be worth US$40bn by 2022, Abraham says it will “significantly” impact the way retailers sell.
“We started selling more in a physical space, then we went to the web, then we went mobile. Now we are very, very rapidly going towards voice.”
“For us as manufacturers, as retailers, it’s going to be a challenge to stay,” Abraham acknowledges, adding in today’s shopping sphere, consumers only need to see an item and say ‘buy’ because “eBay knows my sizes, Amazon knows where I live, and Google has my credit card”.
“The word ‘buy’ will be enough to allow purchasing in the future,” he says.
A new consumer
At the same time as the retail industry is undergoing rapid transformation at the hands of new technologies, a different consumer is beginning to emerge.
“The new consumer is about I, myself, and me” – Jorgi Abraham
“The new consumer is about I, myself, and me,” Abraham says. “Google sees it in the way searches are done; it’s all about themselves. We as retailers and manufacturers have to live with that and meet these expectations.”
The best way to do that is to focus on the most valuable asset consumers have: time.
“Competing on price is very difficult,” Abraham adds, but with consumers willing to pay 40% more for convenience, helping shoppers save time and facilitating cross-border shopping is key.
“It’s amazing how fast we are starting to shop across the world. The consumer has discovered China and honestly, the younger generation does not mind shopping across the world. They trust people from China just as much as the retailer around the corner.”
Embrace change, invest in tech
But with further change on the horizon, including the expected rise of the Asian economy and the consequences it may pose for closed e-commerce, how can retailers survive in this new era?
Jeff Streader, US investor and ex-COO of Billabong, Guess Jeans and VF, says retailers need to understand the consumer is in the driving seat, embrace change, and invest in technology.
“The reality is that the customer is in control” – Jeff Streader
“The reality is that the customer is in control,” he adds. “She’ connected, she’s smart, and she doesn’t want to be told where to shop. She’s in control.” But retaining customers, which is “really what it’s all about,” is not an easy job.
“You have to have the right inventory. Understanding this, understanding the consumer, has never been more important.”
Currently managing director of Go Global, a brand investment platform for the textile, apparel and footwear industry, Streader points to the success of Stitch Fix, to demonstrate the power of AI.
“The digital transformation of our industry, which is being driven by artificial intelligence, is really going to change the way all of us retail and work, and the way that we consider our engagement with our customer.”
Another success story is an app developed for footwear and accessories retailer Aldo. It allows users to ‘like’ or ‘dislike’ products, enabling the firm to get a sense of “who” the customer is and make recommendations.
“They know what you like,” Streader explains. “Aldo and others are building a profile to target you with products that make sense. This will lead to a better customer experience.”
In addition, “machine learning” or “customer listening” as it is also known, offers a way for retailers to get back in the water, Streader says.
“They have to build an intimate relationship with the customer, or they’re going to go away. You have to understand who she is by investing in the technology or providing more accuracy and transparency to be able to respond to her faster. Your retail customer, your branded customer, your suppliers are all going to share information with you because they need you; that’s part of the win-win, the partnership. My advice is to prepare for this and build your digital awareness.”
In the modern supply chain, this means manufacturers embracing technology too, Streader says, adding IT no longer just means computer maintenance, it now encompasses an entire department that builds the “bridges” required to better connect with consumers.
“That’s where this is going. You have to pursue new technology, not just automation of your factory…it’s way more than that.
“Digital sampling, show rooming…all of these things are absolutely coming and as a manufacturer, you need to be ready for this. Please do not turn your back on technology. It’s not just a retail thing.”
Equally important is switching from “antiquated” business models operating on-premises – where software runs on computers on the premises of the organisation using it – to a remote facility such as a server farm or cloud.
“We had all these different machines that did not talk to one another,” he reflects. “Bridges had to be built between these machines so they could speak.”
Switching to the cloud, or ‘cloud computing’, means storing and accessing data and programmes over the internet instead of on a computer’s hard drive. Its this software-as-a-service (SaaS) approach that Streader says is making companies quickly change their business models in order to be more robust.
And again, it’s not just best practice for brands. “As manufacturers, this is not just for your retailer. This is also where you have to go and what you need to do.”
Garments of the future
At the London College of Fashion, Matthew Drinkwater is leading the charge in working with emerging technologies at the faculty’s Fashion Innovation Agency. The department strives to close the gap between the fashion and technology industries and helps designers and brands change the way they make, sell or show their collections.
“When you can get 3D models that are beginning to look photorealistic, then I think you have the opportunity to explore really interesting ways to retail,” he says.
With advances in 3D fit and body model generation, designers can now create a garment digitally and put it to market before it has even been manufactured.
“What we’ve seen happening is people virtually trying products on and then coming to a physical location to buy,” Drinkwater explains, adding that as depth sensing and facial tracking improves on mobile devices, “we’re going to see an awful lot more of this.”
“Within the next six to 12 months, we’ll be able to really capture and track your entire body from a mobile device. When you can do that, it starts to offer some really exciting opportunities.”
And consumers are ready. “Everyone has a mobile device and I think everyone has used ‘pinch and zoom’ to move things around. Consumers want this kind of content, they’re used to it, they’re ready for it…give them a more immersive experience and they’re ready to engage.”
“Consumers want this kind of content…give them a more immersive experience and they’re ready to engage” – Matthew Drinkwater
Meanwhile, with more and more advancements in 3D software and digitisation of garments, Drinkwater says it is becoming increasingly difficult to differentiate between a ‘real’ garment and its digital counterpart. “When we get to that point, you’ll have amazing opportunities.”
The Fashion Innovation Agency has also been experimenting with virtual and augmented reality, shooting garments from collections separately so the items can be mixed and matched on an avatar when viewed via a headset.
“When we showed this to this world, suddenly retail got excited. But what if that avatar was you? What if you could virtually try on, walk all the way around?”
Most people have never stood in a room with a real life hologram, Drinkwater says, but when they experience it, it evokes an emotional reaction. “As retailers, emotion is absolutely everything to your experience. In a world where I can buy whatever I want, whenever I want it from wherever I am, we have to think about what is the purpose of a store, of a location?
“Emotional experiences, immersive experiences, are going to change the way that we engage with retail in the future. We need to provide excitement and emotion for consumers.”
In addition, Drinkwater adds that when you can start to change people’s perceptions through digital and visual effects, it will ultimately open the door to a new type of garment. “It may take five to ten years but at some point, we will be talking about a new type of garment; one that is augmented by computer graphics.
“We are very clear that this new roadmap of technology is going to lead to a new generation of experimental fashion.”
Click here to read more coverage from the IAF World Fashion Convention, including how US apparel giant VF Corp is working to become a ‘purpose-led’ company.