Fashion tech has to be lean and very productive
The uptake of technology in the estimated $3 trillion fashion industry has not moved as fast as one could have expected. But there is now a substantial shift in the current context. Fibre2Fashion spoke to few techexperts to know their views.
As businesses move into a protectionist mindset to get through the next year, future-proofing the business will need to remain a priority to ensure that strategies align with new consumer and business requirements. This means ensuring that plans around digitisation and strategies around 3D production are not put aside in the current emergency period.
I totally agree. In times of crisis only the resourceful ones ?ourish. We don’t know how deep the crisis is going to take us. Fashion tech has to be lean and very productive. It’s no time for super expensive R&D with unpredictable results. The good news is that there are a lot of great and a?ordable fashion tech out there. Fashion industry members have a lot of opportunities.
Companies can’t a?ord to not invest. Since many fashion retailers will be contracting their sta? due to covid-19, they’ll need to find other ways (such as through automation) to drive key business decisions. Technology will be the catalyst that enables them to adopt more efficient work?ows. Retailers’ on-hand cash (though lower than prior to covid-19) will need to be prioritised for technology investments in order to optimise their inventories and workforces.
We see companies taking one of two approaches now. Some companies are freezing budgets and deciding not to invest in technology, they’re really hoping things return to normal quickly. Other companies see the ways in which the market is changing and are making investments now to stay relevant and nimble. I think the companies who invest in technology and innovation today are the ones who are going to be able to survive and thrive in the future.
There will be consolidations and restructuring of many in the fashion industry as a result of this economic turmoil. As I mentioned above, those who are agile, embrace innovation fast will be the ones who are able to start to invest in tech and make that digital transformation for survival. In addition, new fashion brands will emerge creating new efficient, sustainable supply chains in response to the consumer demand for more transparency. Sustainability will become a must have of retailers’ business models, rather than a nice to have.
Process improvements and system upgrades save money. Not investing in innovation and making these changes now will end up being more expensive in the long-term. You are seeing this play out in retail today with so many companies filing for bankruptcy. Retailers need to fundamentally change how they design, plan, and distribute goods and how they go about servicing the needs of their valued customers. By implementing new innovations, adding efficiencies, shrinking their supply chains, and better understanding the needs and wants of their customers, their business will improve, grow and thrive.
The declining economies and the liquidity shortages of consumers are precisely the reasons why more companies will adopt sizing technologies and other e-commerce solutions. Consumers are being more selective with their money, are taking more time to make buying decisions, and need to feel confident that they are making the right choices. Companies that can o?er this security will reap the rewards. What it boils down to is that companies and consumers alike have less money to waste which means that the entire process from production to logistics needs to be more precise, more efficient, and more customer centric. Solutions with a performance based business model such as Fit Analytics will be chosen as a preference because those solutions only charge for the added value created.
The fashion industry in particular has been heavily hit during the covid-19 crisis with many manufacturers and retailers at risk to fail. However, the crisis will open also to possible consolidation among big companies and suppliers. It might happen that some acquisitions will involve tech companies that can become strategic for big fashion and luxury brands. On the other side, small medium companies will have big difficulty in doing new investments in technologies, as they will strive to survive
Overall, the fashion industry will need to invest in the right technologies to meet financial demands and customer needs. Buy Now, Pay Later solutions will be more important and relevant than ever in the foreseeable future, as companies bring their businesses online and as consumers seek more financial control and ?exibility for their payments. Drivers of the rapid growth in the adoption of payment installments originated from the global financial crisis of 2008. Millennials and younger audiences grew up with an experience and understanding of the impact on their families of carrying debt. Millennials are now using debit cards more and seeking alternatives to credit cards for when they need some ?exibility. This trend will continue across wider demographics to move away from revolving credit lines, accruing debt and compound interest as consumers begin to embrace new financial tools in their daily lives.
Adoption and investment in technology has been mostly top down—from bigger brands to smaller ones—as the technology becomes cheaper and more a?ordable. However, the current pandemic appears to be altering this trend in some ways, especially since it has accelerated the digital process due to the need for contactless delivery and business. Ironically for us, some of our big customers are going slow on digital projects. One likely reason is that the executives responsible for digital are no longer sure of retaining their jobs. Besides, larger companies have other issues on hand like employee protection, legislation and critical supply chain issues that are keeping their hands full. On the other hand, we were more than surprised to have signed small and mid-size customers every day this month. These customers came from geographies as diverse as Australia, the US, Pakistan, UK, Canada, Morocco and even India. These are all bespoke merchants—they do custom tailoring for men, women or even both. In these times of mandates for physical distancing and self-isolation, neither they can go to their customers, nor can the latter come to them to get measured. They all face one problem: "How to customise apparel for customers if they can't measure them?" The interesting part is that we did not make any cold calls to these MSMEs. Rather, many of them reached out to us by searching for companies that o?er tech solutions that would help them digitise their business. They were happy with the accuracy of our app. Given the situation, it would entirely depend on the investment required and the benefits derived from the same. In our case there is no investment required.
I absolutely expect the fashion industry to invest in technology. It’s happening right now, in spite of the current economic situation. The fashion companies that do invest in technology will thrive. The ones that don’t will not survive. It’s that simple.
Because retailers are margin driven, they will closely assess the return on investment of any solution. In order to be a win-win, the key is for solution providers to clearly demonstrate ROI, and ensure pricing is fair and accessible. We are very confident of the future outlook.
In the short term, investment in technologies will seem so expensive; however looking in the long run, we believe that technologies are the future and once all the big brands take the lead to start adopting fashion tech, all the stakeholders will be forced to adapt. In addition, adopting technologies isn’t as expensive and impossible as people expected. Technologies could be a word that scares people o? since it has always represented high-priced. However, with more and more competition entering the fashion tech market and as the technology advances, digital transformation for fashion will be more and more approachable for everyone.
Published on: 23/06/2020
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.