2021 was a truly unique, disruptive, and a year unlike any other for fashion retail. Technology undoubtedly proved to be the major driver of change. Last week, Daniel Bobroff, our Head of Retail, attended various events, including Drapers Future of Fashion during London Tech Week, an annual initiative designed to showcase the UK’s vibrant and unique tech scene.
From the Metaverse and NFT’s to gamification and livestream shopping, the week explored the biggest trends shaping the future of fashion, as well as emerging next-tech frontiers that are bubbling to the surface. To help you get a taste of what’s to come, we highlight some of the areas that caught our attention.
1. More and more fashion brands are announcing their entrance into the world of NFTs
There is clear evidence emerging that in the pursuit of digital experience, younger consumers want to engage with many new technologies such as NFTs and live streaming. It is recognized that fashion has a strong play in this area. This, in turn, is driving the conversation around the emergence of digital fashion more broadly.
2. DTC brands are reinventing the role of physical retail
Increasingly direct-to-consumer (DTC) brands, many of which were born on the web, are re-imaging the role of physical retail towards more social spaces that are not just there to sell stuff, but rather to build trust in the brand with customers and deepen storytelling around the brand. Gymshark’s eagerly anticipated flagship store opening soon on London’s Regent Street is expected to follow this trend.
3. Metaverse initiatives currently focus on engagement and activation initiatives with their customers more than on sales
Currently, some luxury brands are leveraging the Metaverse to enhance customer interaction, engagement, and experience more than focussing on sales. Still, Gartner predicts that, over the next five years, one in four people will spend at least one hour per day in the Metaverse for different reasons, including shopping, so it seems clear that this will become a standout sales channel in the near future.
4. Pop-up stores and multi-tenant environments are on the rise
Physical retail landlords are changing their behaviour and even their role, offering greater flexibility with shorter-term rentals, new use types, and different financial models, encouraging the appearance of pop-up stores and multi-tenant environments.
5. Data collection has become an imperative for improving overall retail CX
Data collection and refinement continue to be of the utmost importance for retailers but especially challenging for those with legacy infrastructure. DTC brands have a distinct advantage here with their ability to collect first-party data, helping them customize their offering quickly for new international markets. Data collection is also at the heart of retail’s drive to personalization. As we move towards Web 3.0, are we entering a shift from e-commerce to me-commerce?
6. Retailers are boosting customer experience through building community
Community building is now viewed as key to fashion brands, with technology at the heart of a retailer’s ability to drive this at scale.
7. Fashion retail is increasingly in need of external engineering excellence and partnerships
Fashion retail requires ever-sophisticated technology skills, and the recent period of the pandemic has ushered in a new deal with its human engineering capital. We have entered an era of the distributed development team.
During the recent “great resignation”, retailers understood the limitations of traditional in-house development teams and now increasingly favour a more distributed model. This prioritizes engineering excellence over physical location, addresses talent scarcity, and masters faster, more agile development methodologies.
Retailers are moving towards a more hybrid approach with full-time teams and external engineering partnerships (such as offered by HTEC), particularly for some of the most demanding technical challenges such as artificial intelligence.
8. Fashion retail automation is on the rise
For any retailer, being able to provide exceptional customer experience is key. Automation is at the core of this target, with many traditionally manual processes being addressed. Physical stores are also reinventing themselves, with in-store automation enhancing shopper convenience and delivering a seamless omnichannel experience. At the same time, the store associate’s role is changing dramatically to reduce repetitive, manual work, now done by computers, in favour of more time spent with the shopper. This offers a virtuous circle of efficiency gains, greater job satisfaction and improved customer experience.
9. 3D offers an opportunity for greater innovation
3D is playing an increasing role across fashion’s value chain. Considering 3D’s ability to generate quick and limitless editions and create entirely virtual hyper-realistic goods, designers are starting to recognize the massive potential of 3D assets.
10. Resale platforms, rentals, and subscriptions are among the most impactful new business models to emerge in retail
New business models are increasingly being tested within fashion retail, with resale platforms, rentals, and subscriptions being amongst the most prominent to accelerate. Younger consumers who want companies to have positive environmental and social impact are increasingly turning to companies that offer these models — opening up massive economic opportunities for forward-thinking business leaders.
11. Gamification is emerging as a key tool in customers’ engagement
From boutique brick-and-mortars to enterprise-level corporations, retailers of all sizes are exploring ways to gamify their customer experience, thereby boosting engagement and sales. Gamification is emerging as a key tool in the retailer’s ability to engage longer and further with its customers in a digital environment.
12. The pandemic is accelerating the digital transformation of retail
There is a distinct feeling within retail that digital innovation has accelerated as a distinct consequence of the pandemic. This period has profoundly impacted consumer behaviour causing the end of business-as-usual. As stores closed, digital sales accelerated across many retail categories in Europe, including fashion. 56% of European consumers say they bought three or more products online at the peak of the crisis. This trend looks like it is here to stay.
Looking ahead – Big Bets for Future
While 2022 looks significantly more positive for the global fashion industry than the previous year, weaknesses exposed during the Covid-19 pandemic, significant supply chain challenges and the threat of recession continue to affect the industry adversely. However, those that seek to change their status quo and meet the changing expectations of customers will leapfrog ahead in an industry that will emerge leaner, fitter and faster to delight the shopper in untold new ways.