Technology in the fashion industry has increasingly become more mainstream over the last few years, as digital fashion paced up recently. The use of blockchain and crypto assets, material innovation and other fashion technology trends may become more relevant going forward.
Fashion industry has recently become one of the favourites for adoption and scaling of cutting-edge technology. Over the years, and even more prominently due to the pandemic, as fashion has become more digital, some aspects of technology and innovation in the fashion world have seen tremendous pickup, while several others continue to move on their same trajectory. The industry over the last few years has focused more on building ways to understand consumers better, both in brick-and-mortar and online formats, while it has also realised that fashion can be more sustainable.
Use of blockchain and cryptographic technology to solve legacy issues in the industry, use of AIbased recognition techniques to make digital fashion more environmentally friendly, use of AI to revolutionise physical fashion retail and bridging the sustainability gap through materials innovation are some of the relevant trends that could bring tremendous change in the industry as they see greater pickup going forward.
FASHION INDUSTRY EMBRACING BLOCKCHAIN TECHNOLOGY AND CRYPTO ASSETS
The use of blockchain technology has happened in various ways in the fashion industry over the last few years. The technology has use-cases in the fashion industry in various forms as well as in various parts of the overall market. For instance, a lot has been talked about blockchain being used for bringing transparency in the supply chain and sourcing practices of the companies. Essentially, blockchain is allowing companies to provide a digital twin for their products, along with tracing each step of the product development and also providing a reliable solution for reducing counterfeiting of luxury goods. The digital version of the product will be unique and will ideally have information of every step in the production of the physical product. To market these products even better, companies are also embedding QR codes and near-field communication chips on their products, which help brands build a closer connection with their consumers, assuring consumers of the authenticity of the products, and providing a new and more effective marketing tool for the brands. Blockchain will also facilitate building more transparent supply chains enabling consumers to make their decision based on what material their products are made of.
Similarly, cryptocurrencies and digitised non-fungible tokens or NFTs are also becoming the new favourites of fashion brands. Before the onset of the pandemic, the use of digital space for creating articles of fashion was only on the fringes as names like RTFKT (and their digital sneakers) were only restricted to a niche community of gamers. Now with the boom in NFTs, big names such as Gucci, Burberry, Louis Vuitton, Dolce & Gabbana among several others have launched their exclusive digital collections catering to different groups of luxury buying consumers. The latest trend in the fashions NFT hype is launching digital and physical twins of the luxury products providing exclusive physical products for consumers as well as digital design for their online avatars. As the metaverse is considered an extension of our reality, our presence in it is also being looked at as an extension of our personality in the real world. Fashion houses are keen to provide fashion statements for the extended digital personalities as well.
The first ever crypto fashion week held in 2020 became a historic moment. Featuring cutting-edge innovations in digital fashion, it provided a walk into the future where perception of fashion would extend beyond what we conventionally think of. Large sportswear brands like Nike, Puma and Adidas have now teamed up with digital-only fashion or NFT creators such as RTFKT, The Fabricant and Bored Ape Yacht Club respectively, to get a stronger hold for their brands in the metaverse. On the one hand, fashion NFTs provide tremendous value for those who like to collect rare items, while on the other, NFTs are also being touted as a way for fashion designers to protect rights on their designs. As fashion and metaverse mingle further, the market for digital wearables will likely increase manifold. The size of the digital wearables market is not yet clear, but on Decentraland (one of the metaverse spaces) total sales of digital wearables reached $750,000 in the first six months of 2021, jumping from $267,000 in the same period of 2020. The current figures and growth in this market is much higher and is one of the most prominent factors behind why large fashion and apparel brands want a piece of the crypto pie.
ALGORITHMIC FASHION DESIGNING AND CONSUMER FEEDBACK
The use of AI-based software in designing clothes is being experimented with for the past five to six years as many professional fashion designers and computer scientists have taken up the task of bridging the human computer disconnects in conventional fashion designing. Use of computer-aided design (CAD) software has been around for even longer, but with it the role of technology was limited to originating the designs. Conventionally, the idea, the philosophy and the context of the designs still came from the designer (human) itself and thereby, it derived the legitimacy amongst the community as well as the followers. On the other hand, innovation in design while maintaining the designers authenticity was conventionally a tougher task due to cognitive and emotional biases.
Generative Adversarial Network (GAN)the technology used today to make designing less subjectiveis an AI algorithm which takes inputs as previously available designs and uses neural networks to churn out similar designs, that may have aspects which differ in colour, shape, or texture from the input.1 This could also be guided by the designer itself, putting various other features that maintain the core aesthetic value. Digital-only fashion company, The Fabricant, in collaboration with designer Amber Joe Slooten, has been able to create a collection of digital couture using this technology.2 On the other hand, large players such as Zalando and Amazon have been experimenting with this technology more recently to help people shop for specific designs. Various other versions of this algorithm are also being extensively used to give greater insights to companies as well as the users as to which clothes (or the way to wear it) are more fashionable or appealing and reduces design waste by having a greater product-market fit.3
Similar AI techniques are increasingly being used to gain real time consumer feedback and to understand what is more appealing, and what kind of designs are increasingly being preferred over others. Several other applications of AI are also providing consumers a better understanding of how a particular outfit will fit them. Solutions such as StyleScan and TrueFit help consumers find products that would fit them better. This also helps brands reduce waste as they can now catch trends early on and produce sizes which are much more in demand in the market rather than relying on historical data.
PHYSICAL FASHION AND AMAZONS ENTRY
Amazon is expected to formally enter the fashion space this year with its first physical fashion store Amazon Style in Los Angeles. This is not a technological aspect in the conventional sense in the industry, but with its store Amazon expects to bring a revolution in the way retail fashion stores operate. Inside the store, customers will be selecting clothes to try using their Amazon Shopping app. The store and the app will then work in tandem to get these selected items to a personalised waiting room for the customers and will also provide the customers more curated recommendations based on their selection. The interesting part is that different styles and sizes of a product would not be needed to put up on the racks and can be easily chosen from the app itself and will be placed in the waiting room.4
This will be Amazons first entry into physical fashion retail, which comes after the e-commerce giant became the largest apparel retailer in the United States surpassing Walmart in 2021.5 With presumably the largest user-base for clothing and fashion amongst all physical retailers, Amazon will take much more market share from its competitors in the coming years. With this concept, Amazon is also trying to blur the gap between online and in-store consumers, making both the mediums more complementary to each other. Amazons timing of entry into this space is also of importance, as physical retail sales bounce back fully from the effects of the pandemic. Powered with a plethora of user experience and preference data related to apparel and fashion, it will be worth watching if Amazon Style could really bring a technological change in physical apparel retail experience.
MATERIALS INNOVATION IN FASHION
The next aspect of technology worth highlighting in fashion relates to the core of the field, the material. Fashion industry is not just frowned upon for largest post-consumption waste but also for using materials coming through processes which harm animals and have a significant impact on the environment. The recent report from the Material Innovations Initiative (MII) on next-gen materials gives useful insights into different materials (and their technologies) that could possibly see scale going forward. These next-gen materials come in various forms plant derived, mycelium derived, laboratory grown animal cell constructs, derived from proteins and biopolymers through fermentation processes, from recycled plastic or textile feedstock and others. The potential market for next-gen materials for all conventional materials (leather, silk, wool, fur, down and exotic skins) was estimated to be around 54-66 per cent of total purchase for each of the material subcategories.6 This reflects that in mature markets such as the United States and China, a large market already exists for products made from environmentally friendly and ethical material, and consumers will prefer next-gen over conventional materials once these are produced at scale, have fairly similar quality and are priced reasonably.
A large part of the environmental impact from the fashion industry happens at the raw material stage, estimated to be as high as 75-80 per cent. Early studies by companies producing leather made from pineapple (Pinatex), cactus (Desserto) and other plant-based materials (Mirum by Natural Fibre Welding) have all reported lower carbon footprint and water use, while affecting the ecosystem much less than the bovine and PU leather. Similar lower environmental or ecological impact has also been reported by alternatives to animal-based silk, down, fur and other conventional materials. Increasingly more aware consumers and global concerns for sustainability have given rise to several game-changing partnerships between large corporations and material innovation companies.
Recently, various major fashion and sportswear brands have partnered with the next-gen materials to make them more mainstream and gain an advantage in the market. Apparel & accessories brands such as Nike, Adidas, Lululemon Athletica, H&M, Hugo Boss, Stella McCartney, Ralph Lauren and other luxury fashion brands like Fossil, Karl Lagerfeld, and Modher launched exclusive lines with sustainable materials to move the market ahead. Next-gen material use in luxury fashion has therefore increased significantly over the last few years, and it has also spilled over to home décor materials, furnishing, wearables and luxury automotive. On the other hand, several large fashion houses have also introduced their in-house materials, which are currently exclusive to their products. For instance, brands like Gucci, Jord, and Von Holzhausen have developed their in-house substitutes of animal leather, whereas House of Fluff introduced non-animal fur (BIOFUR) material use. A third way of material innovation that has seen a boost is through rounds of investment from large brands into materials start-ups, primarily to get early access to newer materials and perhaps also to get a greater hold on the sustainable materials supply chain.
However, the overall market for innovative and sustainable materials is currently very niche and relies largely on luxury consumer segments. Upscaling this market will require changes in consumer preferences as well as significant reductions in their unit costs. MII in its report suggests that less than 20 per cent of the next-gen materials are available in the market at a commercial scale. There are some other challenges with these materials such as lower performance metrics in bio-based materials. This increases the use of PU and leads to blends of bio-based and which makes them difficult to recycle, but more environmentally friendly than conventional materials. However, it is expected that with significant improvements in several of the next-gen materials, they will be much more suitable for use in all marketable aspects than what they currently offer.
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