AI gets real in 2018 and expects to take mainstream in 2019 and beyond. The AI work initiated by the founding team of Stylumia in Myntra, India’s largest online fashion retailer gets a mention in the report
# Trend 1: Consumer Shift – End of Ownership
A survey done in Britain found that one in three young women consider clothes old after they wear them once or twice. This is a clear reflection of people craving for “Newness”.
Also, research shows an average person buys 60% more clothing items than 15 years back and keep that clothing for only half as long as they used to.
While there will be a higher trend towards renting or pre-owned in high-value items, we would like to interpret this to be a need for solving the “newness” challenge in the near term.
With half of the products made in the industry not selling at full price, the ways for the players to get their newness quotient right can be through:
1. Speedy mind to market
2. Make the right product in the first place
3. Look at innovating with the business model of ownershi
# Trend 2: Consumer Shift – Instant Gratification
With the consumers getting ever improving the speed of fulfilment from the likes of Uber, Amazon etc., the time lag expectation between discovery and purchase is coming down significantly.
One key shift is in how consumers are getting inspired. They used to get inspired by in-store assistants of brands and retailers. Now that has shifted to multiple sources like the social media, influencers and celebrities. A 2017 study shows about half of the respondents get influenced by bloggers, influencers compared with just 20 percent placing faith on the in-store assistants.
We see the need for the players to use technology solutions to minimise/crush the time between “want moment” to “have moment“.
Also, there is an opportunity for offline retailers to promote products in-store with social / influencer credibility with real-time intelligence.
# Trend 3: Aggressive Productivity Improvements
With a potential slowdown in the global economy by 2020, players will look for key opportunities to boost productivity compared to previous years. Indian economy is showing the highest growth across all developing economies with over 8.0% GDP growth projection.
“More with Less” will be a theme the players would drive.
Our view on effectiveness in fashion is for the players to work on key areas to get maximum return on invested capital through:
1. Get Product Designs Consumer-Right: Use technology/big-data to drive decisions along with human intuition
2. Get quantity forecasts right: Use cutting-edge prediction models than just trade partner feedbacks in deciding volume bets.
3. Get distribution right: Shift from traditional replenishment and rule-based replacement models to sophisticated stock deployment using cognitive technology enabled replacement/replenishment models. Also, present relevant propositions personalised to consumers across channels.
# Trend 4: Disrupt Yourself
Best way to stay relevant is to disrupt yourself before someone else does. This is more critical in the context of technology and social media enabling a new breed of “challenger” brands disrupting the incumbent players.
As per Mckinsey millennial survey, young generations are more likely follow up-and-coming brands. These brands show high saliency and engagement in social media.