On the eve of a new decade, 2019 is a year of awakening and revival in preparation for changes to come. As the world becomes increasingly digital at ever faster speeds, success will come to those who embrace technology to help increase productivity and efficiency. With uncertainty and volatility in the industry on the rise, bigger risks need to be taken to reap bigger rewards. Following greater than expected growth in 2018, this year may see some stagnation, so prioritizing strategy over survival is key.
The digital world is unavoidable now, and to move forward, companies need to maximize their outreach and omnichannel presence. Now is not the time to be cautious. Modernization is lagging in the fashion industry because companies are not taking big enough risks. Consumer patterns are changing, and brands need to adjust their business models to cater to them. Self-disruption is going to be a continuing pattern for established, traditional brands to compete with small, emerging brands. Brand heritage and prestige are no longer enough, with social media marketing and engagement drawing attention to challengers who provide the novelty consumers want. Recently, this has encouraged logo makeovers and new streetwear sub-labels from established brands, but brand loyalty just isn’t what it used to be. Creative measures need to be taken not just in design aspects, but in the business side of fashion. While the top 20 companies continue to take the large majority of profits, smaller brands are disproportionately displayed on store shelves and have garnered a wide social media presence. Through celebrity endorsements and eye-catching platform advertisements, customers are buying items from direct links, reducing the friction between discovery and acquisition. Not only that, small brands are able to better capitalize their target audience by finding a specific market niche.
Social media presence aids in explosive growth for small brands through engagement and interaction with their customers, often asking for input and feedback. This makes customers feel more connected to the brand on a personal level, which fosters brand loyalty. Subscription services have found their way into the market based on this principle of personalization and customization of their product offerings. Large companies are learning to think small trough exclusive collections and customizable items, but it’s not enough. They should focus on engaging with their customers to create a brand personality beyond the brand name and heritage. Traditional advertising is just not reaching as wide an audience, and digital marketing allows brands to target specific consumers through advanced search activity algorithms, rather than aiming advertisements at the public and hoping to capture the target audience.
With retail profit declining, companies need to diversify their platforms and improve upon the ones they already have. Consumers prefer to shop online, and are often only going to retail stores to try on items for size and fit. Brick and mortar stores should reduce stock and reorganize their displays to facilitate this transition. Mobile traffic is steadily increasing, but currently, many mobile interfaces are not user-friendly, with inconvenient check out processes and difficulty in discerning product quality in blurry images. Payment processing varies across the board. The experience needs to be streamlined with less redundancy, as e-commerce continues to be the most active sale channel, and consumers are spending less time considering each item they come across, as a variety of choices continues to expand industry-wide.
Responsiveness to customer demands and speed to market are crucial, but it comes with its challenges. As trends come and go faster than ever, decreasing the purchase lag is essential to keep customers interested. With same-day shipping, immediacy has become an expectation. It’s no longer the case that brands are setting trends through advertising, rather, it’s influencers on social media who are pulling the market direction, making it difficult to anticipate the future. Artificial intelligence and analytics can track purchase patterns and help brands determine what to produce, but the most difficult aspect is knowing how much to produce of each item. A new pattern of releasing more frequent, smaller stock collections have been occurring to try and combat overproduction and maintain relevance. Just-in-time and made-to-order production are becoming increasingly popular, as it greatly reduced overstock. Unfortunately, small-batch production creates higher transportation costs due to a smaller scale. To continue this model, production costs must be reduced elsewhere in the supply chain.
Automation and innovation is a necessity in the fast-paced nature of today’s society and economy. Labor costs are increasing and productivity remains stagnant. To maintain growth, the supply chain needs to cut down on inefficiencies and digitalize the process to track where issues are occurring to correct them in real time. While transition costs of going digital may be high, it will allow better data analysis and monitoring of problem areas. Furthermore, reduction in production time will improve the goal of instant gratification.
Above all, digitization is the future of fashion and the textile industry.
© BSAMPLY – March 2019