While writing my blog post on green trends in fashion, my research brought into focus how retail has changed over the years. A well reported journey from traditional high street stores, to development of huge department stores and malls, and then in recent years the explosion in e-commerce.
Over the course of the pandemic that left most physical stores closed, brands needed to digitise or get left behind. The adoption of technology and software has enabled firms to become more competitive as they use the ever-increasing available data. A trend which is has already occurred in manufacturing, business services and healthcare.
In the fashion world, AI is now being used to predict what humans will want and desire in the upcoming seasons, while also increasing operational efficiency through supply chains and revenue streams. This transformation is seen in every leg of the industry, from design, sales, marketing, and manufacturing.
The adoption of AI and machine learning has enables brands to create algorithms which help them and their customers understand the consumers’ preferences. This technique is very similar to how Netflix creates its “recommended shows for you” list and Spotify creates a unique playlist for each listener. Fashion brands can gather data by asking customers questions, analyzing taste and trends, and looking into historical purchasing patterns to provide recommendations and add-on items. These brands have created a virtual personal shopper, but unlike humans, these machines can gather and analyse ever increasing data sets.
Of course the end customer is also much happier as there are fewer returns to take to repackage.
From the AI personal shoppers, the data gathered can also be used to predict design. AI provides real-time data to observe shifting trends. Thus, buying and merchandising teams can strategize accordingly to address consumer demand and always stay relevant.
The bane of online sales is returns. Using the right tech one of our clients has developed intelligent sizing for its kids clothing which has enabled returns to be lower than 5%, great for our client and for its customers who have very high levels of satisfaction.
The data can also be used to manage revenue streams. Fashion brands can identify what percentage of products are driving their revenue. This fragmentation per category can help designers see what is selling and what is not preferred by their consumers. Product returns are also a huge factor in revenue streams. By analyzing returns data through AI, designers can also see what products to alter in terms of their trend, size or category.
Besides the design and selling process, AI is also being within manufacturing of products in fashion. Systems are in place to spot defects in fabrics and ensure the finishes of the products are accurate. This form of AI, called computer vision technology, allows for quality assurance to be more streamlined and more accurate.
Machine learning has been implemented in the logistics and supply chain process where AI is used to optimize supply chains by accurately predicting inventory demand as well as reduce shipping costs and transit time. With this accuracy, there is a reduction in wastage and elimination of last-minute purchases to meet unexpected spikes in demand, all increasing the revenue streams of the fashion brands.
As Polestar has seen within other industries, AI software and technology is going to increase efficiency within fashion as well. The adoption of this technology is only going to make fashion brands and apparel providers more competitive as the advantages outweigh the costs.
With AI and the fashion industry joining forces, there is sure to be innovation. Switching your business plans digital should be a focus of your business too. It is important to know when to invest in your business with better technology or find others who will. Over the years, Polestar has worked with many firms who are either seeking to provide these services or use them as they move into the next digital stage, both through fund raising for investment and making introductions. We would love to hear your plans or provide the right introductions needed for your business. As always, please reach out!
AI is fundamentally transforming the industry from the way that fashion companies manufacture their products to the way they are marketed and sold.
