The fashion industry is constantly changing. New trends, styles, and technologies are developed every day, making it hard for a company to keep up with everything happening in this competitive market.
As the world moves towards digital, the fashion industry needs to follow suit and capitalize on this growth. The good news is that this change is already in high gear, fuelling exciting new solutions for long-time fashion challenges.
Digitalization in Fashion - How is the industry changing?
The fashion industry is going through a digital transformation. This means that new, innovative methods are replacing traditional ways of doing things. For example, through social media channels people are now buying directly clothes that are delivered to their doorstep, or a consumer might try shoes virtually to see how it looks before purchasing.
An estimated 7-9% of fashion purchases now take place online, and this number is set to grow. The pandemic has made this digital dive a lot more prominent. Ever since coronavirus and with continuous announcements of variants such as Omicron, the way people shop is continuously changing. Consumers are more comfortable making purchase decisions from home. This trend has given rise to online shopping, as in-store shopping during lockdowns hasn’t been a viable solution. As a result, more than 45% of consumers in the UAE have converted to online shopping, along with a forecasted 20-25% growth in the Middle Eastern e-commerce market.
This digital transformation has created new opportunities for companies. However, it has also led to some disruptions in the market that can make staying competitive difficult. Brands are under reputational risk and the only way for them to retain and delight their clientele is to adapt their business models and digitize. Failure to do so can result in loss of customers and declining sales.
Digital Transformation - Getting it right
Digital transformation goes much deeper than having an online store. When we talk about digital transformation, it pertains to all aspects of the business and is not a one-and-done deal. You will need to keep improving and adapting to changing times. Yes, online stores are a part of it; that being said, some things will require your immediate attention before you can go further. There are two things that every fashion business needs to address first to start their digital transformation right.
- Online stores are now a dime a dozen. Almost 80% of online stores close within the first two years. The first step is to engage with your customer to keep them coming back.
- The digital space is growing exponentially. Your old website might not be enough to handle the potential traffic and demand or optimized to maximize it. Organizations are advised to refine and scale up their online operations.
If your company wants to capitalize on fashion digital transformation, the only way to ensure success is to plan ahead of time. There are a few strategies that you can adopt to ensure success in the future. A solid long-term plan can help align your organization and have a clear road map of what needs to be done in the coming years. Here are a few strategies that can be adopted:
- Planning which digital technologies to be used
- Selecting the immediate priorities
- Embracing new technologies considering long-term opportunities
- Engaging with customers in an authentic way
- Leverage big data and analytics to manage the supply chain
- Refining and scaling up your online operation
- Leveraging global platforms
- Using granular data and advanced analytical tools to manage stock
- Partnering with other businesses
- Optimizing costs using a zero-based approach
- Digitalizing product development and support functions
- Using data-driven decision making
- Providing an omnichannel experience
- Betting on personalization
Planning which digital technologies to be used
First, you need to have a clear strategy for using digital technologies and building your tech stack. This means having a plan for using the web, social media, search engines, mobile apps, integrations with third parties, data analytics, AR and VR, and other technologies.
Selecting the immediate priorities
Second, you need to ensure that your immediate priorities align with what customers want today. That means focusing on areas like customer experience, personalization, and convenience.
Embracing new technologies considering long-term opportunities
You also need to embrace new technologies as they emerge. And this could include things like virtual reality, artificial intelligence, blockchain, metaverse and NFTs. For example, you can ask your clients to pay for designer shoes with Bitcoin or altcoins, or start thinking of Direct-To-Avatar (D2A) or Direct-To-Consumer (D2C) models designing your own digital version of clothes to be sold in or to be used for the real world or the Metaverse, similar to what Balenciaga is doing through Fortnite or what Nike is planning for through its recent acquisition of a virtual sneaker and collectible company RTFKT (known as "artifact").
In addition, things like Cloud migration can allow you to save data storage costs, streamline workflows and enable rapid scaling. The purpose of tech enablers is to make the workflow effective and efficient. The main concern is cybersecurity risk, however, with the right set of measures this risk can be mitigated and/or reduced.
Engaging with customers in an authentic way
Staying competitive in the fashion industry future means authentically engaging with customers. This includes engaging in communities and having meaningful conversations with customers, using platforms such as social media and reviews to listen to their feedback.
Leverage big data and analytics to manage the supply chain
Staying competitive in the fashion industry future also means leveraging big data and analytics to manage your supply chain. In other words, you need a tech-enabled efficient business model that can help you increase productivity and improve logistics while providing customers with an excellent experience.
Refining and scaling up your online operation
You also need to refine and scale up your online operation. If your customer is online, digital marketing is the best way to reach them. This includes making sure that your web presence and apps are easy to use with neat user interface, your social media posts are engaging, your brand and content are consistent, your story and value propositions are presented clearly, your email marketing campaigns are targeted, and your search engine characteristics are optimized so buyers can find you.
Leveraging global platforms
Another critical thing to keep in mind is leveraging global platforms. This means using media that are popular worldwide. For example, it's essential to make sure that you use platforms like Amazon, Facebook, Tiktok, Snapchat and Instagram, among others to reach people in other countries, unless you are able to build your distribution network worldwide.
Using granular data and advanced analytical tools to manage stock
Granular and advanced analytical tools are essential for managing stock in the fashion industry. This data can help you make better decisions about what products to produce and how much inventory to keep on hand which is a key challenge in providing consistent customer experience and managing cash flows efficiently in Fashion.
Partnering with other businesses
This could involve collaborating with companies that provide complementary services or sell different products. Partnerships could help you reduce costs, strengthen your brand, and access new markets. If done well, partnering with other businesses can lead to tremendous success for all companies involved.
Optimizing costs using a zero-based approach
Optimizing your costs using a zero-based approach means looking at each expense and deciding whether or not it is necessary. For example, you need to decide whether items like office equipment and furniture are necessary. If they're not needed anymore, consider selling them or donating them. In addition, you can use several saving levers such as cloud migration and vendor renegotiation, which can help you drastically decrease operational costs.
You also want to make sure that all projects that do not require immediate work are halted and revaluated and your staffing is at an optimal level for the amount of work done to optimize productivity. This could mean hiring more people if there's a lot of extra work or cutting back on your workforce if you don't need as many employees, especially with more digital adoption.
Digitalizing product development and support functions
Digitalizing product development and support functions can help speed up the process of bringing products to market. This could involve using software that helps with design, prototyping, and even manufacturing.
It's also essential to have a sound system for managing customer support inquiries. This includes having a remote team of people ready to help customers with any issues.
Using data-driven decision making
Data is the largest asset an organization has as it can leverage this data to improve business growth. Data-driven decision making is essential for success in the fashion industry.
It is estimated that more than 70% of the fashion industry would invest in AI to analyze their data for forecasting, supply chain management, and behavioral analysis. Several stock management solutions can allow you to grasp your inventory and supply chain. Other analytic tools can help you decipher your consumers’ behavior. These offer meaningful insights that can be used to improve your customer experience. This means using analytics to decide on things such as what products to produce, how much inventory to keep, and where to sell products.
Providing an omnichannel experience
Several fashion brands allow customers to pick up their item from a physical store if it is out of stock online. This is made possible through omnichannel communication. The concept drives traffic from online stores to physical stores and vice versa. It can also help you reconfigure your store footprint by optimizing storage space and using innovative ideas such as pop-up stores.
Betting on personalization
Betting on personalization means tailoring your products and services to meet the needs of targeted customers. This could involve using data to identify trends and then producing products that match those trends. It can also mean creating micro clusters of your customers based on their behavior and offer them incentives or providing customized customer service or offering unique experiences that can't be found anywhere else.
How to attract and retain top digital and tech talent in the fashion industry?
It's no secret that digital and tech talent in the fashion industry is becoming more and more scarce; and with the ever-growing demand for tech and digital skills, fashion brands are finding it harder than ever to find and keep top tech talent.
So, how can you attract and retain the best tech and digital talent in the fashion industry? Here are a few tips:
- Create a desirable work culture: This could include offering flexible working arrangements, providing opportunities for professional development and ideas sharing, and having a fun and social office environment.
- Promote creativity and innovation: one of the main reasons digital and tech talents are attracted to the fashion industry is creativity and innovation. Promote these values within your company, and you'll be sure to attract top tech talent.
- Offer a clear vision: With so much hype and distractions today, digital and tech talents tend to follow the next big thing. Offering a clear vision will give them a clear Quest to their contributions and how their future will look like.
- Invest in employee training and development programs: This will help keep your digital and tech talents up to date with the latest advancements and trends in the industry.
Ollen Group is one of the leading management consulting, retail design, and tech consulting firms in the Middle East & Africa region (MEA) offering fashion and consumer products consulting services with turnkey solutions from strategy to execution. Our Fashion strategy, design and information technology dedicated consultant will help your through your journey.
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