Forbes India – Metaverse, Connected Stores, Traceability: Technology Embedded in a Fashion Transformation

In their “State of Fashion Technology” report, McKinsey and The Business of Fashion identified areas in which the fashion industry needs to work in order to “maximize its technological resources.” Photo: FotografieLink / Getty Images

yThe pandemic has accelerated the digital transformation of the fashion industry, with online shopping, virtual fittings and fittings, and even social shopping as well as the metaverse emerging. And this is only the beginning. A new report reveals that fashion players will double their investments in technology by 2030 to improve the customer experience and respond to the challenges of climate change, with personalization, connected stores, new digital worlds, and sustainability as key themes.

2020 was a pivotal year in terms of digital engagement. The pandemic has had a significant impact on the time spent in front of screens, which has increased sharply, especially among younger people, shifting the buying and interaction habits of consumers, who are turning more to social networks, games and new virtual worlds. The major players in the fashion industry, in all sectors, from fast fashion to luxury, are noted, multiplying projects and initiatives based on technological innovation. Online shopping, direct shopping, NFTs, digital fashion and virtual experiences have characterized the shopping habits of customers in many brands and fashion houses. Even fashion brands experimented – perhaps prematurely – with the possibilities presented by the first Metaverse Fashion Week last March.

While these shifts do seem to represent major shifts in the industrial landscape, they may just be a precursor to a true fashion revolution, notes a report by McKinsey and The Business of Fashion. Fashion companies are expected to invest significant, if not record, amounts in technology in the near future, rising from about 1.6-1.8% of revenue in 2021 to 3.0-3.5% in 2030, and nearly doubling in less than a decade. These numbers underscore the importance of brands incorporating technological innovations, starting with artificial intelligence, to help “support sustainability, as well as create an exceptional customer experience,” the report asserts.

Embedding digital processes, personalization and sustainability

In their “State of Fashion Technology” report, McKinsey and The Business of Fashion identified areas in which the fashion industry needs to work in order to “maximize its technological resources.” Topping the list, through NFTs and digital fashion, is the metaverse, but the analysis underscores an important point: “The marketing value of digital fashion and non-fungible tokens (NFTs) may now be evident. An opportunity from the hype to generate sustainable revenue streams.”

As brands rush into these realms with a seemingly endless stream of initiatives to win over young consumers, several surveys show that this demographic is not yet fully convinced. The goal of brands will be to target initiatives that make a difference. Fashion companies that focus on indirect innovations and marketing can generate more than 5% of virtual business revenue over the next two to five years. However, it will be the task of decision makers to focus on specific opportunities.”

It can also go through an increasingly personal experience, using artificial intelligence in particular to improve the relationship between brands and their customers, and build their loyalty. It could start with online shopping, but will continue, according to the report, in stores with the goal of providing increasingly connected physical spaces. “Fashion executives can solve consumer pain points by using in-store mobile apps to improve the store experience and micro-implementation techniques to take advantage of the store in the age of fast commerce,” experts say. The general idea is to reduce the gap between physical and virtual stores, and make them integrated.

Technology must also be put more at the service of more sustainable and transparent fashion, in response to the most demanding consumers on these issues. “Tracking systems powered by tracking software and big data will help fashion brands penetrate their supply chains to fully understand the lifecycle of their products.”

Whether it is dedicated to creativity, craftsmanship, sustainability or the shopping experience, technology will be an integral part of the fashion shopping process for consumers in the not too distant future. The question now is how brands will put it into practice.

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