2020 took an unexpected turn, making it clear that annual fashion-tech predictions can only account for the expected.
Now, the fashion industry is more adept at shifting its gears. With stores closed, luxury customers migrated online and gravitated toward purchases that better fit their at-home lifestyles. This year, we can anticipate continued momentum in areas of fashion-tech that came into play last year — including, perhaps, an enhanced appreciation for the business benefits of innovation itself.
Here’s what to expect from fashion-tech in the year ahead.
New roles for physical stores
After a year with the lights dimmed, stores will see a rejuvenated focus as fulfilment centres, customer service hubs and tech testing grounds. Omnichannel services will proliferate, and the roles of customer service agent and sales associate will continue to merge as they facilitate online queries and click-and-collect shoppers.
“Next-day and same-day delivery are expected now, which requires massive upticks in supply chain innovation,” says XRC Labs principal Kirsten Horning. Micro-fulfilment centres in malls will help retailers meet delivery and pick-up demands, says Sandra Campos, former CEO of Diane von Furstenberg and founder of Fashion Launchpad, while kerbside pick-up and ship-from-store could exceed orders fulfilled from warehouses in metropolitan areas, predicts Nitin Mangtani, founder and CEO of PredictSpring. H&M, for example, has positioned its stores as “logistical hubs” for deliveries, pick-ups and returns.
In 2020, as many as 25,000 stores closed in the US alone, including mall brands like Gap, Macy’s and Express. Tech companies might repurpose these shuttered stores to provide fulfilment and omnichannel capabilities, predicts Peter Fader, professor of Marketing at the University of Pennsylvania’s Wharton School. With logistics in the spotlight, Amazon is expected to start to sell some of its logistics services in the same way it did with Amazon Web Services.
While shopping in stores, shopper behaviour will be analysed by stealth technology, predicts the Future Laboratory, while QR codes and AR experiences will embellish packaging and signage. Already, brands such as Louis Vuitton and Burberry have introduced these types of projects, and companies ranging from Snapchat to Virtual Super Land provide these services.
Tech will enable sustainability
Last year’s supply chain issues will incentivize brands to invest in technologies that result in less inventory waste. These include on-demand and personalization capabilities, and digital-first or small batch releases that escape the seasonal structure.
“What began shifting this year, specifically in luxury, seems to be a deeper understanding of the imperative to bring statistical and machine learning tools into conversations about forecasting to lower production waste,” says Jessica Graves, founder, and chief data officer of Sefleuria, a data science advisory firm that works with luxury brands.
Fit tech will continue to improve, but it will be limited to categories of brands where fit is more loose-fitting, such as shirts, says Pano Anthos, managing director of XRC Labs. Amazon, which patented on-demand clothing technology in 2017, has just introduced custom T-shirts in the US; customers submit body photos and measurements, and Amazon creates a customer avatar used to fit the garment.
This extends to resale, Anthos adds, and brands will more proactively participate in ways that Gucci and Burberry have already begun. XRC Labs recently backed Recurate, which helps brands facilitate resale on their own websites. “Previously, brands couldn’t participate in the resale of their products, losing customer loyalty and an opportunity for a new touchpoint with that customer,” XRC’s Horning says.
Shoppable video will proliferate
Shoppable social videos will mature and expand to include shoppable TV shows on tech platforms including Amazon, Instagram and Snapchat. “Retail brands are exploring new content marketing opportunities that combine entertainment with expertise and acquisition,” according to Future Laboratory researchers.
Brian Mandler, co-founder of TikTok-focused agency The Network Effect, is particularly bullish on the Amazon influencer programme, including customised creator storefronts and Amazon Live. Mandler points out that Amazon has already converted Gen Z and early millennials, which connects the dots between engagement, curation and ease of making a purchase. “Short-form creators with audience and influence are the fashion curators of today’s trends, and from what we have seen in Q4, they are dramatically driving followers and clicks from short-form platforms to customised Amazon storefronts and Amazon Live interactive broadcasts.”
V-commerce, e-fashion and mixed reality mature
Virtual spaces, including video games, will ignite competition among luxury players to win over new customers. Experimentation in digital fashion and virtual commerce will extend to bigger players and more commercial capabilities. Look out for the launch of Ada, a luxury fashion game, and potential digital-first launches that test the market and sell both digital and physical goods.
Augmented reality continues its march toward the mainstream; Google searches for lipstick and eyeshadow on its app, for example, now offer the option to “try on” products via AR. Meanwhile, the impact of 5G adoption on mobile shopping and commerce will become more obvious. “It will enable richer shopping experiences through enhanced video and AR that will drive more engagement,” says eMarketer principal analyst Andrew Lipsman, “and ultimately lead to an acceleration in transactions.”
Blockchain and digital identities get a new lease on life
Blockchain’s momentum slowed last year as brands pivoted to urgent needs. But the pace will resume for giving digital identities to physical goods, thanks to the advent of digital goods (whose ownership is often transferred via blockchain), global omnichannel inventory (which requires a global, unique identity for each item) and online, cross-border payments.
Yoox Net-a-Porter has begun piloting a project to give digital identities to all its private-label collections through a partnership with Eon. Customers can scan QR codes to access provenance, care and design information, as well as repair and recommerce services. Over time, the group plans to build out new services, such as virtual wardrobe management, as well as explore blockchain and digital ID infrastructure. Giorgia Roversi, director of sustainability and inclusion at Yoox Net-a-Porter Group, says that unique digital identities are like digital passports that can keep track of where garments were made, what they are made of, and their authenticity — which is particularly important during resale.
Fashion futurist Karinna Nobbsrecently co-foundeddigital fashion marketplace The Dematerialisedwith blockchain expert Marjorie Hernandez; digital fashion items are secured via blockchain. “It is like the digital department store of your dreams. Think of it as Farfetch’s sexy younger cousin,” says Nobbs.
The tech reckoning continues
TikTok, Facebook and its family of apps,Googleand Apple will all continue to come to face new scrutiny from governments globally, including anti-competitive probes. This could delay further acquisitions or updates from big tech platforms, like those related to shopping on social, as tech companies prioritise legal battles. Brands will be motivated to diversify advertising strategies to not be reliant on one platform or company; this could give a leg up to emerging social platforms.
One law under consideration is Section 230 of the Communications Decency Act in the US, which examines if tech platforms are responsible for the content that flows through their platforms; expect Facebook to be most impacted here. Amazon will also continue to face investigations on whether it copies third-party goods sold on its platform, and TikTok’s relationship with China, while not likely to be as prominent in the Biden administration, will still be relevant as it builds out its relationship with Walmart and Oracle. All will continue to answer for how they collect and make use of data, which will be a deciding factor in the future of targeted ads for brands. Finally, in China, tech giant Alibaba, the owner of Tmall and its popular Luxury Pavilion platform, also faces antitrust scrutinyby Chinese regulators.
Competition and diversity among e-commerce platforms will increase
Expect multibrand e-commerce platforms, which proved essential to fashion during the pandemic, to gain in dominance, and for diverse business models beyond the classic marketplace to proliferate. Companies ranging from Farfetch and Moda Operandi to Mytheresa and Poshmark will have to compete for loyalty through increasingly sophisticated means, including recommendation engines and clienteling strategies that entertain and feel personal. Recommendation engines are growing in importance for capturing a greater share of wallet, given the high cost of customer acquisition, says XRC’s Anthos, while the Future Laboratory points to private “whisper networks” of invitation-only micro-communities for luxury consumers.
Graves, of Seflueria, predicts that companies will look to technology that can provide an excellent, “privacy-aware” experience while maintaining the anonymity of shoppers. Additionally, she says, fashion will demand more nimble partners that can bring cohesion to scattered systems, and start to look at the “why” behind data patterns. “It’s a paradigm shift for data scientists, let alone business experts, and we’re already seeing the early adopters make strides.”
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