There’s a revolution in the fashion industry. Technological innovations are fundamentally changing the way brands and retailers do business. And it’s not just in-store. Supply chain, manufacturing, logistics, delivery, customer service – all are being impacted by technology.
It is enabling established retailers to embrace innovation in recognition that their industry is being disrupted from the ground up – in many instances by purely digital companies.
“The barriers to entry are completely removed,” warns Alessio Rossi, Global Chief Digital at Japanese skincare brand Shiseido. “The indie brands are becoming very big and distribution is no more an issue because you can distribute online and literally reach any consumer segment and any market at any time.”
As Mauro Porcini, Chief Design Officer at PepsiCo, points out: “The key challenge traditional retailers face is how to be relevant digitally – both in terms of brand building, then through selling products through the digital channel and then how to build engaging experiences – both virtually, but eventually also physically.”
“If they don’t, they really run the risk of being irrelevant,” adds Saisangeeth Daswani, Head of Advisory – Fashion, Beauty and APAC at research firm Stylus. “It’s really offering brands a bigger opportunity to extend themselves to consumers; it’s giving consumers a lot more touch points.”
A key challenge for all retailers is how to get closer to their customers. How can they use technology – and especially data – to understand what drives consumers not just to purchase products, but to build meaningful relationships with the brand?
One way that retailers can cosy up to customers – and even personalise products for them – is via assisted tech. A good example of how this works comes from Shiseido.
“We recently deployed a mobile device-based app that lets the consumer customise their own foundation based on their exact skin tone match at any time simply by tapping their skin with their phone,” explains Rossi. “That was an interesting experiment in going down the path of consumer intimacy and relevancy to the most granular level.
“The key challenge traditional retailers face is how to be relevant digitally – both in terms of brand building, then through selling products through the digital channel and then how to build engaging experiences – both virtually, but eventually also physically”
Mauro Porcini, Chief Design Officer at PepsiCo
“The digital transformation offers a great opportunity for us to learn more about the consumer journey and their preferences, and how can we go to market with campaigns and products that are truly relevant,” he adds. “We use a lot of digital signals, primarily from social, that can inform our decisions to really come up with better ideas to win their heart.”
So what are the trends likely to shape the fashion industry in the coming years? Timo Weiland, Co-Founder of events and publishing company The Lead, believes that tech-savvy online disruptors could have the upper hand.
“My predictions for the next two to five years are capital raising for companies that really have a handle on technology, and that are communicating with technology, especially across e-commerce vertical, digital-native brands,” he says.
“There’s just so much excitement around these companies that are achieving luxury, personality and real unique differentiating qualities all online,” says Weiland. “How they go beyond that physical bricks and mortar, that’s very exciting.”
All these developments need support. “The fashion industry is one of the pillar industries in Italy,” says Tony Gherardelli, Head of Innovation Promotion at Intesa Sanpaolo Innovation Center. “That’s why Intesa Sanpaolo supports our customers in those industries, finding the right start-ups in fashiontech – scouting the new trends like blockchain, big data, artificial intelligence and nanotech.”
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