Digital Transformation
Fashion Industry Challenge

Digitization in fashion: what are the developments in the sector?

The fashion sector, which ranges from low-cost global retailers to exclusive luxury brands, is a significant engine for a large part of the global economy. Fashion is one of the most difficult areas, due to the strong impact of global economic uncertainties, distinct trends, and industrial changes. In response to pressures for growth and profitability, many brands have launched a series of initiatives aimed at improving their speed of marketing and implementing sustainable innovations in their basic product design, manufacturing, and supply chain.

Fashion brands are increasingly lagging behind the expectations of their customers, which represents a fundamental challenge for them. The role of the consumer has shifted from passive observation to active domination. He is no longer content to buy fashionable products; the exponential growth in the use of digital technologies has freed it. He wants to interact with the brands he loves, to be an actor in their success, to influence them, and identify with them. Informed, selective, and enterprising, he cares about his image with the public and on social networks and the image of the products he buys and owns. The vast majority of consumers use digital channels before, during, or after the act of purchase.

This means that becoming a digitally sophisticated brand can no longer be viewed as a separate activity. On the contrary, it will be a fundamental element of the organizations and of the global relationship between the consumer and the brand. Exit the typical consumer segments, regions, and universal solutions.

New standards of service and experience are being defined, and it is mainly a question of gradually moving away from the product brand to become a brand that shapes and implements contextualized and consumer-centered proposals. In other words, it's about becoming a brand that envisions its ecosystem of experience in its entirety. Brands established with analogue systems are judged according to these new standards and are obsolete and outdated in comparison.

But a lot of brands are still wondering how to tackle the challenges in bridging the digital divide. Given the stakes, in this case, the heritage and identity of the brand, this is a very delicate path to follow. Any digital manifestation of the brand, from social platforms to third-party distributors, must be accompanied by a redefinition of brand values and be adapted to the needs of the consumer. A poorly adapted or generic digital offer could further widen the digital divide, or even pose a threat to the brand and its reputation.

Reputational risk: Brand protection in evolving times

It sometimes takes years to build a successful brand, but only a few moments to destroy it. Fashion brands, on the other hand, have always been required to be ready and able to respond to uncertainty, risk, and reputation issues with changing times.

But in an increasingly complex and volatile world, they must find a balance between their growth aspirations and operating plans and the strategic risks they face. Factors contributing to this environment include:

• Evolution of regulations.
• Social media communications.
• Increase in the number of consumption channels.
• Larger regions.
• "Accelerated" risks.

It is therefore essential that companies exercise increased vigilance, their brand, and reputation being the most important assets to protect.

Digital transformation is the means by which companies make organizational changes, manage reputation risks, and bridge the gap between customer expectations and the service and experience they receive. For a fashion brand, this means reinventing the process of the act of purchasing in a digital world, rather than being limited to digitizing the purchasing process existing in the physical world.

The digital transformation challenges and changes the established perceptions of what a company is doing and says, in order to strengthen its relevance to consumers. While the shift to omnichannel use is real and growing, the vast majority of fashion revenue is still coming from physical and offline channels. For some fashion brands, while it is still true that geographic location is the cornerstone for capturing offline retail demand, the ability to ensure a consistent omnichannel experience encompassing the physical, virtual and emotional aspects of communication to conversion and beyond, will be key to the success of these brands.

Clienteling: what can digital contribute?

It is the convergence of digital and classic channels, coupled with the rise of consumer power that will lead to increased demand for a consistent brand experience. The value of information and analytics is therefore set to gain importance.

Imagine that it is possible to know what each consumer will buy when they enter a store.

Imagine that it is possible to know how to activate consumers at the right time and to have the possibility of cultivating individual relationships with each of them, in a distinct and personalized way.

It may be impossible to imagine, but advances in clienteling (establishment of long-term relationships with customers based on their habits) could be bringing us closer. Clienteling is nothing new for fashion brands; sellers can identify key customers at a glance. However, due to the growth of the global customer with activities spread over several regions and multiple channels, brands have more difficulty understanding their customer base in depth.

Digital clienteling (including advanced processes, analytics, technological developments on marketing, commerce, and sales platforms, and digital services) offers a personalized customer experience within multiple channels, ultimately, improve conversion rates and revenues.

The amount of information available about consumption patterns, behaviors, trends, and decision factors is more important than ever. However, if decision-makers get the wrong conclusions or lack the skills to turn solid information into business decisions, investing in big data and analytics is like throwing money out the window. Unlocking this information is key to understanding the consumer's current state of mind, and determining what it will be in the near future.

Owing to the Internet of Things and data science, the convergence of big data, and advancements in marketing technology, fashion brands will be able to better understand their customers, react to market trends and adapt their sales information and their products.

Digital transformation: how to do it right?

Many fashion brands have a fragmented approach to digital transformation and focus on digitizing isolated processes or functions. Digital transformation is often limited to individual programs or projects that affect a reduced number of departments.

Sometimes it can even be limited to one area, marketing or sales, for example, to give only limited or very slow feedback.

However, an urgency and a dynamic are about to emerge in the wake of the digital transformation, as organizations carry out reinvention, redesigns, and the adoption of new tools for an era where classic boundaries are surpassed. The increasingly rapid progress of technology and its accelerated adoption by consumers deserve that many fashion brands review the priority they give to it.

For the most part, the main drivers of digital transformation constitute significant opportunities or existential threats. And the opportunities or threats that these changes represent should be the primary concern of leaders who envision the future of their organizations and businesses. Often when it comes to reinventing the service and experience offered by a brand, and building relevance and revenue, one can easily have the impression that it will be possible to deal with it later, with significant investment and a long-term return.

It is essential to find the right balance between taking risks linked to putting innovative ideas into practice with rapid results and building a solid base for digital transformation. In both cases, the main challenges are not limited to unleashing the power of data and analytics, managing brand and reputation risks, managing the entire value chain, or bridging the digital divide. All of these are considered as the essential ingredients which bring the ultimate digital challenge for fashion companies: a complete change in an organizational culture that always puts the consumer first.