Fintech company Lemonade created a new business model that is humanising the insurance industry. With a mission statement of “transforming insurance from a necessary evil into a social good”, the company uses artificial intelligence to deliver insurance policies and donates underwriting profits to charities nominated by its customers. It’s an example of the way that companies can use new technology to revolutionise tired business relationships. But how is the fashion industry rising to meet this challenge? It’s already carving out its own rules.
Keep your shoppers close, your suppliers even closer
One of the big fashion/tech successes is online retailer ASOS. Sales hit £1.9bn in 2017. ASOS has grown its relationship with customers by anticipating their needs and by continuous innovation. Last year it launched a visual search tool that allowed shoppers to find products by snapping a photo of the desired item and uploading it. But it’s also sharing its success by providing opportunities to new designers via its Fashion Discovery Competition, now in its third year. With a £50,000 investment, mentoring and two seasons of clothing stocked by ASOS, this year’s winners are already finding a place within the industry. These relationship-strengthening initiatives are among the reasons Chief Executive Nick Beighton was named the most influential person in fashion retail in Drapers’ Top 100 2017.
Interact with your customers
Social media fan interaction in the fashion industry is 36% higher than the overall industry average. Fashion consumers are highly engaged. Athleisure company lululemon beat pundits’ expectations when it announced that its 2018 Q1 revenue had risen by a quarter.
One of the reasons for its strong growth is its dedicated social media engagement. The brand’s Twitter account @lululemon has over a million followers reading its inspiring feed, featuring motivational tweets and healthy lifestyle tips.
Social media sites have given consumers a platform to voice their views. This means building relationships with customers by understanding their values. Companies which succeed are the ones that not only listen, but act.
For a growing number of consumers, ethics and sustainability are key watchwords. Influential Instagram accounts like Fashion Revolution (@fash_rev — 168k followers) and Eco-Age (@ecoage — 78.7k followers) are contributing to — and reflecting — a shift in consumer perspective. Who do you do business with? What are your partners’ values? More of your customers will want to know.
But responsiveness is also about being able to seize opportunities. Trends can take off and spread around the globe in the time it takes to like a picture. Being able to capitalise on Instagram-led shifts is vital. Accounts like Block Shop Textiles (@blockshoptextiles — 153k followers) are doing just that, with a shop that links straight from its Instagram page.
Accentuate the personal
As belief in the efficacy of traditional market segmentation has declined (what reliable information can we extrapolate from age, marital status and income now?), so personalisation is on the rise. Monogramming and engraving have been making a comeback. Deloitte research shows that one in three consumers are interested in personalised products, with 71% of those prepared to pay a considerable mark-up for clothes and accessories that are individualised.
Burberry’s online shop carries a range of bags, scarves and leather goods that can be monogrammed, while Ralph Lauren and Tommy Hilfiger offer in-store customisation of blazers and other items while you wait. Meanwhile, companies that offer digitally printed, personalised fabrics to order are proliferating.
Waste not, wait not
Swedish fashion studio Atacac is redefining the phrase fast fashion. The company, which calls itself “an ongoing fashion experiment”, uses sophisticated 3D visualisation software to create virtual garments that can be purchased online before they are produced. As an added incentive to customers, the studio uses a system of dynamic pricing to encourage sales. The innovation means not only lower prices and a lean system with little waste, but that that the company can afford to manufacture its clothes in Sweden.
The fact that Amazon won the patent for an on-demand manufacturing service in April 2017 means that this kind of quick, post-purchase garment creation will be more widespread — and soon. What will this mean for the textiles trade? It’s up to people within the industry to work together and turn it into an opportunity.
Collaboration is key
What links all of the points above is collaboration: collaboration between technology companies and fashion houses, between retailers and consumers and between suppliers and buyers in the chain. To maximise opportunities and make connections, influence needs to flow both ways.
At the heart of technological change is the chance to escape stale ideas and old limitations to build global communities based on shared experiences, values and personal relationships.
We want to embody that change. Join us.