TRENDS, TRANSFORMATION AND TECHNOLOGY

CHANGING THE FABRIC OF FASHION

1 INTRODUCTION 06. Future fashion Brands to watch Trends, transformation and technology 08. Market dynamics changing the fabric of fashion 12. The fashion industry has always evolved The fever pitch of an ever-faster fashion The prominence of digital at the speed of seasonal shopping. Not cycle has many questioning the ethics of an

anymore. The time it takes to upload a industry that sees a huge over-production CONTENTS new look on social media feeds, shared by of garments, with massive environmental millions instantly, is the new normal. The impact. The industry produces 20% of 14. sector, now in hyper-drive, is not for the global wastewater and 10% of worldwide It’s all about the supply chain undisciplined or slow-moving. carbon emissions - more than all international flights and maritime shipping At the same time fashion companies combined, according to the United have less power to drive these speedy Nations. Textile dyeing is the second largest 16. trends, which come and go as soon as polluter of water globally. Sustainability is The rise and fall and rise again of in-store an influencer has posted their ‘outfit of now topping the agenda. the day’ and moved on. The industry may depend on the illusion of change, newness, There’s no doubt that the industry needs and must-have trends, but it has reached to find a new model that aligns financial 18. dizzying heights. In this “out with the old, in profitability with sustainability. How can we Sustainability: Should fashion cost the earth? with the new” sector it’s hard to stay cool evolve from the fast fashion model without for 30 years – fashions change fast. compromising the profits of brands? What are the antidotes to mass consumption of The fact is, technology has been rapidly clothes and ever-faster fashion cycles? 20. changing how people shop and style The future and trends to watch themselves. Young consumers crave fashion The good thing is that start-ups, disruption and lifestyle-related digital content. This and reinvention could hold many of the is not just about inspiring a new look, it’s answers. The mentality around fashion is about entertainment now, too. Today, many now changing. 28. digital-first fashion labels act like media Conclusion brands in their own right. Online retailers Fashion leaders must take more risks to are making money as physical stores stay ahead of the pack and embrace more continue to struggle. That’s not to say that flexible approaches in many parts of their brick and mortar stores are dead, they just operations, whether it’s their business have to evolve to stay relevant. model, supply chain, or distribution. These are interesting times.

2 3 “Fashion is the same as politics in theory - JORDAN NODARSE, FOUNDER, BOYISH JEANS the people have the power.”

4 5 2. BRANDS TO WATCH

The global fashion market is dominated Farfetch – The London-based organization by just 20 companies – dubbed the ‘super runs a luxury online marketplace allowing winners’ – by the latest McKinsey-Business people to buy from nearly 1,000 brands of Fashion report. They make up 97% worldwide. It’s also expanded into of global economic profit in the retail technology, working with Chanel to sector of the industry. They also own the link its stores to digital services biggest and most well-known brands. including chatrooms. But the landscape isn’t limited to supersize companies. There are smaller Global Fashion Group – With fast-growing disruptors, including: operations in Russia, Brazil and Indonesia. GFG was set up with a focus on emerging ASOS – Sells fashion aimed at twenty- markets ignored by established online somethings, stocking over 60,000 items, fashion retailers. Its platforms give it access allowing the company to regularly to more than 1 billion consumers. update its inventory with new products. ASOS constantly tracks how well its Lyst – A personalized fashion marketplace clothes are selling online, before that lets customers search thousands of adjusting its inventory. online fashion stores at once, bringing together five million products from 12,000 Boohoo – Has become a shining star in brands and retailers. the UK retail slump as it benefits from consumers shopping online. Even some Reformation – Los Angeles-based label digital pure-players are outmaneuvered known for tongue-in-cheek marketing by Boohoo, which adds roughly 200 new and a strong sustainability mission. It’s items to its website daily. expanding in the UK and Europe and has a big-gun backer, global private equity firm Everlane – Known for its eco-friendly and Permira Advisers. socially conscious business model, this American born-online brand is a favorite of fashion models and royalty alike. In what it calls a “radically transparent” approach, Everlane partners with the best, ethical factories around the world.

6 7 The old rules of fashion, particularly in retail, For instance, China is set to overtake the don’t work anymore. Players now need to U.S. as the world’s largest fashion market, 3. be agile, think about their online strategy thanks to an expanding middle-class. first, and look to achieve even faster speeds MARKET DYNAMICS to market. Staying relevant to consumers Established labels are also creating is crucial. Self-disruption is now of accelerators and incubators in a bid to paramount importance. test new approaches to the market. These A vital market in the global economy can be more flexible and less risky than a Those fashion labels that disrupt their merger or acquisition, which can also be own offerings, their own business models, costly. Think LVMH’s La Maison des Startups and how they operate are the ones likely or Kering’s Plug and Play, an accelerator to survive. Appealing to mindful female looking at sustainability. $1.66 trillion millennial shoppers in North America, market value Europe, and Asia isn’t easy. Fast fashion is hot. In a polarized market that has hollowed out the middle – leaving Brand makeovers are one tool – creating luxury and affordable – budget items are new images or refreshing old ones to thriving. In fact, fast fashion has changed show that the company has their fingers the market for clothes for good. Across on the pulse. Burberry developed a new most apparel categories, items are kept 100 billion garments logo while other brands have turned to for half the time they were a decade ago, produced each year, streetwear. There is a greater tendency with some of the lowest priced garments to look at new collaborations and flex a disposed of after seven or eight wears, more than doubling brand’s identity as far as it can stretch to according to McKinsey. since 2000 pique interest. In this climate, companies have The McKinsey Global Fashion Index predicts compressed production cycles. In the that the best-performing segment is luxury, space of two weeks a trend exhibited fuelled by fast-growing economies in Asia- on the catwalk can be turned into an That’s 14 new clothing Pacific. Luxury brands are also increasingly affordable fashion item on the shelves of embracing digital channels as a route to a store. This enables shoppers to expand articles for every person market. Focusing in on Asia, this is the and refresh their wardrobes in an affordable on earth region for growth. manner, at speed, keeping up with the latest fads.

7th largest economy ranked alongside GDPs Companies have compressed production cycles. of global countries In the space of two weeks a trend exhibited on the catwalk can be turned into an affordable fashion item on the shelves of a store. 5% annual growth in consumption per year through 2050 8 9 A vital market in the global economy

$1.66 trillion market value Size matters

100 billion garments produced each year, Interestingly, no online fashion retailer more than doubling since 2000 has yet been able to break into the elite group of fashion super winners, denoted That’s 14 new clothing articles for every by McKinsey. Size matters – having a scaled person on earth business is a key advantage in fashion. A combination of physical stores, a strong 7th largest economy ranked alongside brand image, efficient operations, plus the GDPs of global countries ability to produce garments rapidly and at a lower cost is essential. 5% annual growth in consumption per year through 2050 This is why Inditex of Spain, which owns Zara, and Hennes & Mauritz (H&M) of Sweden, are two of the world’s largest clothing retailers. They not only slavishly follow fashion trends, but have the winning combinations listed above.

Then there is Uniqlo, the main brand of the third-largest company, Fast Retailing, of Japan, which focuses on timeless basics, while TJX buys excess inventory of brand- name clothes and resells them at low prices. It is the leader in discounted retail The race with Amazon fashion in the U.S. providing countless outlets in a bid to clear excess inventory. Amazon has yet to fully conquer fashion, but it would be foolish to ignore its presence. While fashion brands, particularly DNVBs (digital native vertical brands) create products, services and end-to- end experiences that drive passion in consumers in a way that Amazon never will, it doesn’t matter. This is not where its strengths lie.

The global behemoth has now entered into fashion retailing, meaning the market needs to think about price and logistics, both of which Amazon has mastered. It’s the reason Zalando, Europe’s biggest online- only fashion retailer, has invested heavily in logistics. The aim is to offer speedy delivery, with Zalando having doubled the number of parcels it delivers same or next day in Germany.

10 11 4. THE PROMINENCE OF DIGITAL

Fashion executives are pivoting towards A meteoric ascendance for DNVBs eCommerce for growth, with a focus on mobile platforms. A new breed of ultra- From Boohoo to Bonobos, MM. LaFleur fast online brands are challenging retailers to Everlane, Misguided to ASOS, these such as Zara and H&M. This is becoming digitally-native companies with direct to the key battleground. consumer (D2C) offerings are transforming the face of fashion. They’ve promised new Online fashion sales account for 15% in the and better ways to shop. Above all they’re European Union, 20% in the U.S, and 39% about content and storytelling, hyper- in China. In many emerging markets it’s focused on the customer. still as low as 6%. Yet more consumers are now purchasing fashion items they have DNVBs in fashion have been able to never touched or tried. Retailers are commercialize a highly differentiated being challenged to create digital product offering, seducing younger experiences that provide excitement, consumers by giving them convenience, context, and inspiration. value for money, or just something different. Their core business mostly lies in As we enter the digital-first age, fashion the digital world, although some of these labels rely on Instagram, WhatsApp, brands have now opened retail outlets. Facebook, and apps to propagate sales and marketing. Today, it’s about Launching these businesses requires conversational commerce. The trend huge amounts of capital. They have is set to continue with brands using had to do everything from designing a mix of automated and digitized and manufacturing clothes to sales and responses, alongside personal and human marketing, creating whole supply chain interactions; both Everlane and Tommy mechanisms from scratch. DNVBs have also Hilfiger rely on this. tried to unlock a tremendous amount of cost savings in the supply chain. They are implementing novel approaches and riding on trends in the market to be successful.

12 13 A vital market in the global economy Social commerce IGC – Influencer generated content New apps are starting to pop up with social Boohoo was one of the first to use social- $1.66 trillion market value commerce at the core of their business. Users media influencers on an industrial scale. It can discover products and brands in Instagram, now has a network in the tens of thousands. 100 billion garments produced each year, Pinterest, Snapchat, then buy natively in those Young consumers want more personalized more than doubling since 2000 apps, or download a separate app to explore communications and IGC helps with that. When a full collection. These apps allow product IGC leaders align themselves with popular That’s 14 new clothing articles for every discovery, either through unique independent social movements such as body-positivity person on earth fashion labels or product recommendations or diversity and inclusion, this helps foster based on a user’s social activity. Authentic communities around brands. 7th largest economy ranked alongside GDPs of global countries content is crucial. Personal testimonies win every time. Fashion retailers have also been teaming up with influencers to co-create exclusive 5% annual growth in consumption per year Maturing mobile collections. These partnerships benefit both through 2050 ASOS launched an augmented reality virtual parties; the brand is exposed to the influencer’s catwalk within its shopping app – point a following, while the influencer builds their smartphone at any flat surface and customers profile by doing something cool with a are able to see a model, as though they’re fashion brand. walking along the surface in front of them. Bringing mobile shopping into consumers’ own Micro-influencers physical space, means fashion labels can create When targeting 16- to 30-year olds, focusing on more intimate experiences. Social media, apps, digital and social media rather than traditional and mobile-first eCommerce sites are key here. forms of marketing is crucial. Alongside high- It is predicted that by 2021, nearly 70% of retail profile influencers, fashion retailers are also eCommerce sales will come through mobile. capitalizing on smaller scale influencers -- think Boohoo, in the form of student ambassadors. The ‘Happy Meal’ approach The most effective influencers aren’t always DNVBs are challenging traditional ways of the ones with the most recognizable names. selling fashion items, for instance bundling Companies also look for savvy consumers who items together in a specific look. It’s not a might have a smaller social media reach, but new tactic, McDonald’s has been doing it more engagement with followers with its happy meal for years. It allows apparel brands to offer advantageous price points for UGC – User generated content consumers, while selling more. Social proof – that is, photos of a garment being worn by real people in a positive way – is Drop culture enough to drive shoppers. Boohoo encourages Fast fashion + social media = drop culture. consumers to ‘shop the feed’ with a focused Drops involve posting a picture of a garment ‘Instashop’ on its website. Companies are on social media, alongside its release date, increasingly trying to ensure that shoppers can ramping up interest in its release. Limited easily buy items found and featured on social edition garments, select outlets, and short media feeds such as Instagram, while also timeframes are all tactics used. The idea is sharing customer photos, hashtag campaigns, to create a sense of urgency and illusion of and reviews directly on eCommerce sites. scarcity. The drop model is used by Adidas, Gucci, Nike, Louis Vuitton, and Alexander Wang among others.

14 15 In this era of fast fashion, the fit of the takes full-length images of the consumer garment is one element that companies and can make recommendations based can have issues with. A change in fabric or on outfits worn. Amazon has also acquired design can have a big impact on sizing. body-scanning start-up Body Labs.

5. Brands like ASOS try to overcome the issue Companies are hoping that technology by allowing people to buy several sizes to will slow the growth rate in returns. Many IT’S ALL ABOUT THE try at home and return items free of charge businesses also use Fit Analytics, a Berlin- SUPPLY CHAIN — at a huge cost to them. Free returns based organization, which uses a machine are very much part of the norm for learning sizing platform. It’s now used fashion DVNBs. by over 200 companies including ASOS, Tommy Hilfiger, Calvin Klein, and It’s why the likes of Zara and H&M are Hugo Boss. Those with a formidable supply chain – styles before ramping up production. utilizing software that suggests sizes for This is all about personalization at the end taking products from a nascent trend to Boohoo makes 300 examples of a single those who order online. Customers type of the day, yet no single example has quite a clickable online purchase delivered at style before going all-out on those that in height and weight; the data is then cracked the code for the perfect fit. Those a lightning-fast pace – are the ones doing sell best. processed alongside historic data on well. This involves superior digitalization, purchases and returns. who get there first, minimizing returns and maximizing customer satisfaction great analytics, and a backend that is Transparency - Consumers are increasingly and profits, will gain a huge advantage second to none. Flexibility is key. expecting companies to be fully Amazon is driving innovation in this area, over rivals. transparent about their supply chain. developing services via its Echo Look Quick turnaround – Launching the latest There are many questions around how the device. The first-generation Echo Look trends in ultra-quick turnaround times industry values those who grow the cotton, is what it’s all about. Identifying trends, and make the products, the environment, designing products, going to production, and equitable profit for those in the supply fulfilling orders, and the processes around chain. Many believe positive change starts these stages takes time. Brands need to be with transparency and traceability. focused on agility, they want to be known as the first place to get the new look. Dealing with returns and size When designs can go on sale in as little as HOW FAST CAN FAST FASHION BE? two weeks it can make a big difference. Research shows that 76% of consumers return clothing because of size. While a Inventory turnover – This is crucial for the rise in returns is an inevitable part of the Take Zara, its 300 designers can create 12,000 new bottom line. There’s no point in clothes eCommerce boom, returns are a costly being on the rack – they’re better off in business, and can also affect customer patterns every year. For the fastest fashion, it takes six someone’s wardrobe. Some companies satisfaction. Then there’s the issues of in the fast fashion business realize this. re-processing and putting items back into weeks to go from a sketched design to a product in a Boohoo turns over its inventory 6.7 times a stock. In the fashion industry, free returns store. Boohoo can design, manufacture and dispatch tiny year, compared with 4.4 times for Inditex, drove profits as a competitive advantage. and 3.1 times for ASOS. Now they’re the industry norm, brands are batches — 300 pieces — of a particular design in two re-thinking returns. Test and repeat – This is a good tactic weeks making it even more responsive to customers. for those brands that work heavily online, because they can try out examples of

16 17 Call it experiential retail, call it Connecting both the offline and online retailtainment worlds is another concept that brands are looking at. It’s why Farfetch is talking about Stores are an essential tool in the multi- the ‘store of the future’ and ‘augmented channel pantheon of offerings. What’s retail’ raising questions like, “why doesn’t 6. different now is that they need to the retail staff know my previous purchases?” complement other channels, and not and “why as a loyal customer am I not THE RISE AND FALL AND RISE purely be a sales space. It’s why pop-ups, given the same treatment when visiting a physical experiences and showrooms are store in New York as Shanghai?” AGAIN OF IN-STORE on the rise. Physical retail isn’t dead, it’s just evolving. Farfetch is looking to solve these problems through in-store data. Collecting data in- The ‘store’ is the last word the industry store, using smart mirrors and interactive Physical brick-and-mortar stores remain is expected to increase this year. Both wants to use to describe these spaces. screens, gives visibility to retailers, in a the best way to make a direct and firms say that online is still less than 15% of There’s guide-shops or spaces, concepts, similar way to online data. The store of the powerful connection between fashion overall sales, in contrast to around 27% in showrooms or long-term pop-ups – just future is all about offering the experience garments and customers. This was the the U.S. Fashion still benefits from physical don’t call them stores. This reframing is of Apple, but the convenience of Amazon. conclusion of the 20 super winners meaningful engagement in the real world. about giving shoppers and brands more The aim is to provide full visibility around in McKinsey’s fashion report. And the Brick-and-mortar should not be viewed flexibility. These physical spaces aim to customer behaviour and intent, mirroring fact that DNVB brands are investing in simply as a retail strategy. It is better to connect people with products and brands what’s possible online. Think of it as the stores shows the importance of physical think of it as an extension of a brand’s in different ways. physical cookie. garments in a branded space. marketing and advertising. With the costs of digital marketing on the rise, screaming H&M and Inditex have said that they are into a saturated, expensive online mass is still in growth mode when it comes to also an issue. In some instances, it can be brick-and-mortar. Their net store count more beneficial to open a physical store. JOSÉ NEVES, FOUNDER, FARFETCH

“Retailers need a way to collect Fashion still benefits from physical meaningful engagement in the real information about their customers while world. Brick-and-mortar should not be viewed simply as a retail strategy. they are browsing in-store, just as they Think of it as an extension of a brand’s marketing and advertising. collect data from online searches.”

18 19 7. SUSTAINABILITY: SHOULD FASHION COST THE EARTH?

Reaching peak garment If you buy a pre-worn pair of jeans from Levi’s Authorized Vintage collection, you There is no doubt now that fashion should can now go to the in-house tailors in stores not cost the earth. But the industry is where the jeans can be repaired, resized or rough on the environment. The emissions restyled, thus prolonging the life and soul of from clothing exceeds those of all the garments. maritime shipping and international flights combined. There is now the UN’s Sustainable Fashion Charter, as well as the European Clothing There is now a broader push to make Action Plan aimed at reducing clothing waste the fashion industry less damaging. and embedding a circular approach. At the Sustainability is increasingly seen as a G7 summit in Biarritz, 32 fashion companies commercial opportunity, with calls for the signed a so called “fashion pact,” aimed at JOSÉ NEVES, FOUNDER, FARFETCH word ‘sustainability’ to be synonymous driving sustainability in the industry. Those with success in the sector. This has picked who signed included Chanel, Ralph Lauren, up momentum recently. and Prada plus fast fashion producers, including H&M Group and Inditex. Inditex has announced that all its “Retailers need a way to collect collections will be made from 100% #LoveNotLandfill is a campaign targeting sustainable fabrics before 2025. Other young Londoners to reduce waste in fashion. fashion giants like Nike and Gap are Recently, the British Fashion Council (BFC) information about their customers while making similar commitments to using has revealed its commitment to sustainability more sustainable materials and cutting by launching a new initiative named the they are browsing in-store, just as they down on their carbon footprints. H&M has Institute of Positive Fashion. In New York been offering a garment recycling service an organization called Fashion of Tomorrow collect data from online searches.” across all stores for years now. advocates a more sustainable approach. There are many other initiatives.

20 21 Time for a circular economy The resale of clothing through curated platforms has grown 21 times faster than Rethinking materials and sourcing are the retail apparel market in the last three one thing, but this doesn’t address the years, with 26% of luxury shoppers saying issue — that is the industry is producing they now buy second-hand. The message too many clothes. There is an emerging is focused on community marketplaces, trend, especially among millennials and collaborative consumption, innovation, and Generation Z to buy less, but better a sharing economy. garments; back to the age-old idea that consumers should treasure and reuse This is not just a phenomenon spreading in clothes and remove themselves from the Europe and North America. In Asia, China’s seasonal cycle. YCloset is also leading the way in fashion resale and rental, offering a subscription There are several digital services that membership to five million members. The bring the circular economy to the company has observed that one piece of fore – an economic system aimed at trendy, durable clothing can be used by up eliminating waste and the continual use to 40 different people. of resources. It’s all about post-consumer recycling, finding new life for garments Executives certainly have their eyes firmly that would otherwise go to landfill. The focused on the pre-owned, refurbished, demand for ethical clothing has increased repaired and rental markets. Some 44% exponentially, with 66% more searches for surveyed in the McKinsey Business of ‘sustainable fashion’ occurring since 2018, Fashion Report for 2019 see this trend ANNA GEDDA, HEAD OF SUSTAINABILITY, H&M GROUP according to fashion search engine Lyst. having a greater impact on the fashion industry in 2019. Expect more rental-native Some now call it peer-to-peer fashion brands in the years ahead. Renting fashion commerce. The RealReal – valued at over is seen as a guilt-free way of shopping for a $2 billion – and Farfetch’s Second Life are new look. active in this space. Then there’s Mudseller, which offers a choice between buying jeans or leasing them.

Vestiaire Collective, Poshmark, ThredUp, “We only have one Grailed, Rebag and Tradesy, are a handful in this space raising investment in the tens planet, and the toll the of millions of dollars. Subscription clothing service Stitch Fix says it hopes to do for fashion industry has clothing what Spotify has done for music. They’re all trying to get a slice of the $20 to on resources today is $28 billion resale and second-hand market — expected to more than double in the simply unsustainable.” next four years.

22 23 “We need a new economic model for fashion… UK PARLIAMENT’S ENVIRONMENTAL AUDIT COMMITTEE REPORT ON FASHION.

business as usual no longer works.”

24 25 A vital market in the global economy

$1.66 trillion market value Companies are using digital platforms now Clothes for rental — the Airbnb to meet the emotional desire for newness. of fashion 100 billion garments produced each year, The rental market is shifting from special more than doubling since 2000 occasion to ready-to-wear apparel. Suit hire is already a norm for men’s formalwear, and rental clothing companies That’s 14 new clothing articles for every Some of the key players involved in the are on the rise. This is because the rental person on earth U.S. online lending market include Rent model aims to reduce the amount of the Runway, Ann Taylor, NY&Co, Le Tote, clothing consumers buy and addresses the 7th largest economy ranked alongside Gwynnie Bee, Secret Wardrobe, Girls Meet ‘not wanting to be seen in the same outfit GDPs of global countries Dress, Dress Hire, Swapdom, StyleLend, twice’ issue that many customers want to Rentez-Vous, and FlyRobe. The global avoid. There’s also a rising emphasis on 5% annual growth in consumption per year online clothing rental market was estimated sharing rather than owning. through 2050 to be worth $1.1 billion in 2018 and could grow to $2.8 billion by the end of 2027.

FASHION AS A SERVICE – (FAAS, NOT SAAS)

If you think the rental market is small fry then look to Rent the Runway (RTR), a New York-based, privately owned start-up now valued at $800 million. The company rents clothes, handbags, and jewellery – think of it as FaaS. Its dry- cleaning warehouse is the world’s biggest, processing 2,000 items per hour. RTR started with women’s formal outfits for weddings and other events. Now nearly three-quarters of its nine million clients across the U.S. use it for work clothes. Membership starts from $89, allowing members to choose from thousands of designer pieces.

26 27 8. THE FUTURE AND TRENDS TO WATCH

Fashion forecasting designers prevail over the homogeneity of data-driven algorithms? It remains to The most fascinating occupation in the be seen. industry is that of fashion forecasting. A dark art involving peering into a crystal AI’s proven strength is analyzing data, ball to second-guess the garments, shapes connecting dots, and predicting outcomes. and colors that consumers will click on This is logical, but not truly creative, and in a frenzy with the coming seasons. AI has yet to generate creative concepts Forecasters still travel to remote corners itself but it’s probably a matter of time of the world to closely document sartorial before we see the first example of this. choices of resident micro-communities Designers are unlikely to be out of a job and report back. in the years to come but need to keep innovating and experimenting. Dominated by the likes of WGSN and Stylesight, who shed light on the latest

fashions, it has traditionally been an CHIEF MARKETING OFFICER, REVOLVE instinctual affair, but not anymore. Now it’s “Everything the data-driven analysis. Forecasting agencies pour over information collated from company does stems retailers’ IT systems and supply chains.

We also live in the social media age where from data. If we take a RAISSA GERONA, online communities are easy to follow and access. It’s a marriage of both quantitative risk on a trend and can data and qualitative analysis for short and long-term predictions. see it doing extremely

The integration of artificial intelligence, well, we can qualitatively or machine learning with fashion is still an emerging science, algorithms are playing a distinguish how future complementary role in the fashion design styles will sell.” department. Will the ingenuity of exciting

28 29 A vital market in the global economy

$1.66 trillion market value Who owns fashion data will win Take Lyst, an innovative social curation platform. Connecting consumers to nearly 100 billion garments produced each year, It’s all about data and who owns it, ask 11,000 fashion designers and stores more than doubling since 2000 Facebook, Google, or Amazon. In fashion, worldwide, its platform uses technology take Stitch Fix, and its obsession with to curate the shopping experience of each That’s 14 new clothing articles for every data science. It has a growing list of over of its users. It stands out from competitors person on earth three million clients sharing a lot of fashion by producing exclusive data and offering a detail and data, including sizing, likes, wealth of information on the global fashion 7th largest economy ranked alongside and dislikes. Some customers share very market. It’s an invaluable source of data for GDPs of global countries personal information, such as what parts of advertisers and partners. their body they like to cover up or show. 5% annual growth in consumption per year All of which feeds into their system. And through 2050 with more data Stitch Fix can make better predictions on what any single customer will like. Data is a powerful tool. Whoever owns the data owns the future.

ZALANDO AND ITS ALGORITHMIC FASHION COMPANION

Using data to second-guess the personal taste of millions of users is likely to be the future for many digital players in this sector. Take Zalando’s algorithmic fashion companion, this comes to life each time a customer selects a piece of clothing on their website, instantly creating an entire outfit around the initial choice. It also considers peoples’ preferences and budget constraints based on a customers’ previous shopping.

With every additional click and purchase, the system learns more about personal likes and dislikes, as well as about broader fashion trends. The company has some 200,000 images of outfits created by the company’s real- life stylists that it has fed into this system. The software then decides what combination of colours, textures, and styles makes up a good outfit.

30 31 Trends to watch Community-driven labels – Diversity, inclusion, body-positivity, and sustainability- An increasingly fragmented market – The driven labels were first. Now try community- future of fashion is likely to involve many more driven. Companies like MadHappy in the U.S. small, niche companies rather than the big which combines mental health, happiness, conglomerates we’ve seen in the past, yet and hoodies. Consumers are now interested the aggregate of these smaller eCommerce in buying, wearing, and posting images that sites will be powerful. They may have tiny says something about them. Community revenue streams compared to colossal super groups are very active, it’s about being an winners, but when you add up these smaller ‘in-the-know’ consumer. proliferating brands, they start eating away at the pie. Second-hand and rental options eat Social media and eCommerce unite – The into this market share, too. Instagram Shopping feature is the most obvious example of this, but many more Collaborations – Take Barbour. The heritage digital elements are starting to merge to brand is now more than 125 years old, and achieve sales. H&M launched an online some in the industry say that its success is fashion advice forum called Itsapark due to its collaborations – from Land Rover answering consumer questions and to Japanese brands or Daniel Craig wearing offering videos or outfit photos, created Barbour in the movie ‘Skyfall,’ not to mention by an influencer. This is linked to H&M’s the brand is worn by the British royal family. eCommerce platform – each piece of There are countless collaborations out content offers shopping suggestions there. Expect new and unusual partnerships going forwards. Collaborations keep the Gamification – There is now increased industry fresh. collaboration between fashion and gaming, with competitive experiences seen as a way Fintech – Collaborations don’t just stop of encouraging engagement and loyalty. You at other cross-industry and celebrity can get dating advice via Topshop’s, Date endorsements, they also involve sectors that Dash, a game where contestants race against boost their capabilities. H&M invested in the clock to assemble an outfit in-store to fintech unicorn Klarna last year, the largest impress an eligible date. Chanel rolled out private fintech start-up in Europe. It is a a series of beauty pop-up arcades in cities Swedish “buy now and pay later” company, throughout the world last year. Gamification helping simplify H&M’s returns and delivery is likely to grow as part of experiential retail. processes as well as combining its in-store, online, and mobile payments. ASOS uses it Fast Luxury – Louis Vuitton has offered “small too. It allows fashion labels to drive higher collections” in two-week cycles to appeal to returns, as customers don’t have to pay the fast fashionistas. While fast fashion and when they order. luxury isn’t necessarily an obvious match, it’s hard to ignore that consumers crave novelty, and luxury is no different.

32 33 VR and AR – There are increasing creative Visual search – When visual artificial possibilities using both VR and AR tools as intelligence firm Syte raised more than $21 they become more accessible. Nike Fit uses million in funding, you have to take note. computer vision and augmented reality Product discovery is crucial in fashion. The to analyze a photo of someone’s foot, to company’s technology powers visual search determine the correct size and recommend for those in the fashion industry from Boohoo the correct Nike product. to Tommy Hilfiger, Farfetch and Marks & Spencer. Shoppers take a picture of a garment Wearable tech and smart fabrics – An and search for visually similar products within emerging trend that integrates technology a retailer’s website or app. It’s a matter of time with our daily activities and fits them into before this goes mainstream. people’s changing lifestyles. Expect smart fabrics, i.e. specially made garments infused Scaling start-ups – It’s easy to create a buzz in with sensors that collect data and integrate it the fashion industry as a start-up or a nimble within a smartphone app. Nike launched the DVNB, but transitioning to a more mature HyperAdapt smart sneakers at an affordable company as the pace of growth slows can be price. It collects personalized information an issue, ask Boohoo, which has had to lean about the user as they run or walk. It also self- on acquisition as a way of scaling. tightens. A lot more is coming. JOSÉ NEVES, FOUNDER, FARFETCH “The brands of the future will have three core elements. First, a creative tastemaker able to leverage digital channels to engage a global community; second, best-in-class design, planning and manufacturing; and third, direct-to-consumer global online distribution, complemented by a connected wholesale presence in the most prestigious physical boutiques.”

34 35 9. CONCLUSION

Yes, the fashion industry is in the These technologies are slowly midst of transformation. The perfect creeping into the physical retail storm of fast fashion, social media, environment, too, as brands continue eCommerce and experiential retail has to evolve the in-store customer super-powered the turnover, creation, experience to engage and inspire and speed-to-market of garments and consumers, while gleaning vital data trends. In the instant-gratification and behaviour insights. The future of age of Snapchat and Instagram, fashion will see brands drive further consumers flock to be seen in the innovation to the in-store experience, hottest look – or just the hottest store which remains a powerful connection – while wanting to buy faster, more between garment and consumer. A conveniently, and with more fun. vital revenue driver will be aligning physical retail with digital media Data and artificial intelligence become and eCommerce. further engrained in the fabric of fashion business, from forecasting However, as fashion struts its trends to streamlining supply chain transformation catwalk, brands and efficiency. Digitally-driven business consumers need to be wary. In their models have driven the rapid growth wake lies the ever-increasing impact of digitally-native fashion brands. Agile on the environment. Fashion simply inventory management, revolutionary cannot continue to mindlessly chase speed-to-market, consumer-centric the next hot trend, while ignoring the social media and content, and the colossal carbon footprint the industry evolution of frictionless online or continues to tread. It’s time for brands mobile purchasing experiences push and consumers to fully embrace fashion into a new digital era. rental, reuse and recycle initiatives, prolonging the life of garments, and the planet.

36 37 Resources

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