Ideas for a new business in the fashion industry

Google took its first steps into AI-powered, user-powered fashion design in 2016 with Project Muze, an experiment it launched in partnership with the platform Zalando.

The project trained a neural network to understand colors, textures, style preferences, and other “aesthetic parameters” derived from Google’s fashion trends report, as well as design and trend data from Zalando. From this, Project Muze formed an algorithm to create models based on users’ interests and match the style preferences recognized by the network.

Amazon is also innovating in this area. An Amazon project led by Israeli developers will use machine learning to evaluate an item for its appropriateness to a given style. Another example of the company’s efforts in this area is a project by Amazon Lab126, an R&D unit in California. It uses a database of images to train an AI algorithm on a specific fashion style in order to create similar images. It’s a kind of “fast fashion from Amazon.” In 2017, the company patented a software system for on-demand clothing production. The technology could be used either to create the Amazon Essentials clothing line or to support suppliers participating in Amazon’s supply chain.

Of course, the results of AI design without human input aren’t always ready for the catwalk. Many designs created for Google Project Muze users were unwearable, while some reports on Amazon’s Lab126 initiative called the designs “crude.” But these are just the beginnings of using AI.

The use of algorithms in fashion design has created both legal and aesthetic concerns. For example, in 2019, it was revealed that a number of online T-shirt vendors were using bots to select images (under which people left comments like “I want this on my shirt”). These images were then uploaded to marketplaces for custom-made T-shirts. This quickly drew criticism and accusations of copyright infringement and intellectual property theft.

However, the gap between AI and human designs is narrowing. In April 2019, an AI “designer” called DeepVogue took second place overall and won the People’s Choice Award at International Fashion Design Innovation Competition in China. The system, developed by Chinese company Shenlan Technology, uses deep learning to generate original designs based on images, subject categories and keywords selected by human designers.

Tokyo-based design consultancy Synflux is also using AI in an innovative project called Algorithmic Couture. A team of designers and software engineers developed a software environment that creates custom clothing models over a series of iterations. First, the software 3D scans the body to collect data on its dimensions and proportions. Machine learning algorithms then analyze the collected data to develop templates for clothing parts that optimize fabric use and waste. Finally, designers use computer-aided design (CAD) software to create fashion patterns that can be used for sewing.

Much more research and development is needed before companies can rely solely on AI designers. But AI is already helping brands design and produce new styles faster. In 2018, Tommy Hilfger announced a partnership with IBM and the Fashion Institute of Technology. The project, known as “Reimagine Retail,” used IBM AI tools to decipher fashion industry trends in real time based on consumer preferences, runway photos, trending patterns, silhouettes, color schemes, and styles. The system’s findings were presented to designers, who used them to create their next collections.

Heuritech offers an AI platform that analyzes millions of images, identifying shades, cuts, shapes, and thousands of other fashion elements to predict how popular they will be in the coming year. For example, the system can predict the popularity of a particular color in the U.S. next season. Brands like Dior use Heuritech to validate their experts’ opinions on future fashion trends, and manufacturers like Wolverine Worldwide use it to gauge whether consumer demand for certain products is growing.

Machine learning can predict with some certainty what up to 80% of a seasonal collection will look like. And only for the remaining 20% is it necessary to develop new creative ideas. This leaves more time for the creative team to search for truly interesting and original fashion concepts.

Stitch Fix uses artificial intelligence to develop garments for its Hybrid Design line. The line is created by algorithms that identify trends and styles not found in Stitch Fix’s portfolio and suggest new designs — based on consumers’ color, pattern, and textile combinations — for designers to approve.

The company goes into detail about how it works (shown below) in "Algorithms Tour" on its website

The company said sales of AI-generated products are on par with those of fashion brands' suppliers, based on the fact that Stitch Fix has a wealth of customer data to feed its AI and the effective feedback loops that underpin its subscription business model.

An example of how an algorithm creates a new one based on two initial models.

THE FAST FASHION BUSINESS MODEL IS AN OPERATIONAL CHALLENGE FOR PRODUCTION

In the post-World War II era, fashion trends were divided into seasons, with spring/summer collections debuting on the catwalk in early fall and fall/winter collections in February. The seasonal timeline gives companies enough time to gauge retail and customer interest. Between the collection's runway show and the time the pieces hit store shelves, companies have the opportunity to gauge demand and produce the right amount of clothing for the season.

The fast fashion business model, where designs move quickly from the catwalk to store shelves, has upended the seasonal dynamics of the fashion industry. Brands like Zara and H&M have built their businesses on speed and flexibility. Once these companies spot a new fashion trend, they use their super-fast design systems and supply chains to bring the collection to market. This allows them to beat traditional brands. The clothes and accessories that appear on the catwalk in September and February are reproduced by fast fashion companies before the originals even hit the stores.

The ability to operate in near real-time allows fast fashion companies to offer a wider range of styles. This, in turn, allows them to work with small target user segments and produce pilot batches to test demand. Companies working with the fast fashion business model also have the opportunity to respond to ultra-short fashion trends.

Budget alternatives to high-end fashion are always in demand. Even amid a retail slowdown — and the economic uncertainty of the Covid-19 pandemic — Zara owner Inditex is set to doubled its net profit compared to 2020, reaching 3.2 billion euros.

Fast fashion is destroying the semi-annual seasonality that has long structured the fashion industry. To keep up, traditional clothing brands now debut about 11 seasons a year and can release up to 52 weekly “micro-seasons” a year. Zara, for example, produces 20,000 new styles a year.

Social media accelerates this cycle and is an essential element of the fast fashion business model, effectively serving as a sales channel for them. The use of influencers and other social media strategies helps new trends spread quickly, leading to rapid expansion of consumer demand. With “see now, buy now” tools on platforms like Instagram and Pinterest, shoppers react instantly. Sales strategies adapted to TikTok technology have enabled companies like Fashion Nova, PrettyLittleThing, and Shein to achieve rapid sales growth.

Company Fashion Nova — is one interesting example of a fast fashion brand. It successfully uses social media to build a customer base and promote its brand. The company relies on its fan base of 3,000 micro-influencers, who regularly submit photos of themselves wearing the brand’s clothes to the Fashion Nova website for broadcast. They form the brand’s visible community, the Novababes. And for them, appearing on the Fashion Nova homepage with 14 million followers represents an opportunity to gain instant fame and receive free new outfits as a form of payment.

The ability to produce and market new fashion collections in near real time is becoming a major competitive advantage. For example, Shein has managed to take market share from fast fashion giants Zara and H&M. Shein aims to create new collections within three days, while Inditex takes an average of three weeks. Customers are also attracted by low prices and a constant flow of fresh styles. On average, Shein adds around 2,000 new products to its online store per day.

But fast fashion has a dark side. Many brands in this segment of the market produce cheap, low-quality clothes in factories with questionable working conditions, relying on workers who are paid low wages. Cheap clothes can also be harmful to the environment, as the rapid production of clothes that wear out quickly contributes to excessive textile waste. According to McKinsey, the global fashion industry produces 2.1 billion metric tons of greenhouse gases annually. This represents about 4% of total global greenhouse gas emissions. The fashion industry is estimated to account for up to 10% of global CO2 emissions, 20% of global industrial wastewater, 24% of insecticides, and 11% of pesticides used.

INNOVATION IN OPERATIONS

The cost of creating a fashion brand has dropped significantly thanks to innovative manufacturing technologies and e-commerce.

Marketplaces that connect fashion suppliers and manufacturers use AI to assess the feasibility of a project, providing cost and production time estimates. This eliminates the lengthy process of coordinating projects over many iterations with potential manufacturers.

Platforms like Etsy have made it easier for anyone to open an online store and attract a target audience. Today, lower production costs make it possible for small or start-up companies to produce small series of products at reasonable profits and build their customer base.

In the past, companies needed to maintain production of hundreds or thousands of items to achieve reasonable costs and prices. Now, startups like Sewport , make it easy to find manufacturers willing to work with small batches. They also offer transparent pricing and sourcing standards. New companies can get an estimate of production costs and set prices accordingly. For example, the platform Pietra, which began operating in 2019,  helps with finding suppliers, organizing orders and setting up e-commerce channels.

Leading fashion houses are also innovating their production systems to compete with fast fashion. For example, the TommyNow (Tommy Hilfger) production project makes products available worldwide, both online and in stores, immediately after the collection is shown on the catwalk. Thus, TommyNow products reach stores three times faster than traditional collections.

Many other brands are eager to follow TommyNow. But it’s no easy task. Cutting an 18-month production cycle three times to six months required Tommy Hilfger to rethink its entire design, manufacturing, and distribution systems. However, there are a lot of emerging technologies that make production more flexible and scalable.

SUPPLY CHAIN OPTIMIZATION 

The Covid-19 crisis has highlighted how disruptions to supply chains can wreak havoc on businesses, including the fashion industry. Many companies saw production grind to a halt when China, where many multinationals source their goods, shut down due to the pandemic.

Supply chain management and risk mitigation are more important than ever in the fashion industry today. Artificial intelligence (AI) can help improve supply chain management. Companies are using NLP-based AI to mine news, government databases, trade journals, and more to identify circumstances that could cause supply chain disruptions, including natural disasters and industrial accidents. Machine learning is also being used to generate risk assessments for suppliers based on their supply chain.

For example, startups such as Interos And Resilinc, curate databases of business relationships with suppliers and use machine learning to assess risk levels based on monitoring their supply systems.

Supply chain risks – and the concept of supply chain risk management (SCRM) itself – have changed radically over the past six years. SCRM used to be limited to monitoring logistics and the price-quality ratio of products. Today, this approach, due to its narrowness, does not allow for effective management of the risks that companies face.

Nowadays, private and public organizations have to deal with many risks affecting supply chains, from trade wars and industrial espionage to modern slavery and climate change. At the same time, social media and the 24-hour news cycle amplify reputational risks and directly affect business. The issue of optimizing supply chain management is a common headache for many, if not all companies and is a source for creating new business ideas and business models. And since it is not unique to the fashion industry, I will not dwell on it in more detail here. It is important to keep this aspect of business in mind when building a company in the fashion industry.

USING 3D PRINTING AND PERSONALIZATION

3D printing can also help fashion companies adapt their operations to rapidly changing consumer preferences and demand.

Ministry of Supply The company, which specializes in the production of clothing from innovative materials with special properties, installed in its flagship store 3D Printer That Can Make A Custom Blazer In Just 90 MinutesThis method of producing clothing reduces fabric waste by approximately 35%.

And in May 2021, Adidas partnered with 3D printing and design company Carbon to release the 4DFWD, a shoe that gives your running an extra boost the moment you hit the ground. It does this by using a special outsole design with a lattice structure. Producing shoes with this outsole design would be nearly impossible without 3D printing.

Adidas 4DFWD Model

SENSORS, SCANNERS, CLOUD SYSTEMS.

As fashion enters its next era, goods produced using ultra-fast manufacturing systems will be tracked and distributed using next-generation inventory management tools.
To this end, companies are increasingly using a combination of sensors, scanners, and cloud-based software to monitor and manage inventory. Radio-frequency identification (RFID) technology is one approach that is becoming increasingly widespread.
RFID (radio frequency identification) tags are cheap, non-volatile smart stickers that can be used for digital cataloging. Unlike barcodes, signals from RFID tags can be read from a distance, reducing the time needed to manually record items.
Macy's began using RFID technology in 2009, and it took about 8 years to achieve 100% registration of all products in all of its stores. The company works with suppliers to tag products at the point of production, which allows it to manage inventory and logistics more efficiently.
With the increase in the accuracy of information on the receipt and sale of goods, the amount of warehouse stock can be significantly reduced, which allows, on the one hand, to save resources, and on the other hand, increases the availability of goods, which ultimately leads to an increase in sales.
For example, German company Gerry Weber, which supplies affordable women's clothing, installed RFID chips on care labels back in 2011, and received double-digit sales growth almost immediately after it began using the technology, simply because it allowed it to more accurately replenish its stock of products.

Some Macy's suppliers, especially luxury brands, use RFID to monitor counterfeit products and to determine where clothing is purchased.

Italian brand Moncler, equips its products with RFID chips that customers can authenticate via a mobile app or website, allowing them to distinguish Moncler products from counterfeits. Brands such as Benetton and Salvatore Ferragamo have similar programs.

RFID technology is also helping to streamline garment handling processes. Rent The Runway, a fashion rental startup, has RFID tags on 1.5 million items. The company launders returned rental clothes, and before that, employees had to manually sort them into 26 bins for different wash cycles. Now, items go through an X-ray machine that detects items left in the garments and an RFID scanner that sends them to the correct bin for washing.

Automated warehousing with RFID technology makes fast fashion even faster: Zara, which attaches RFID tags to each item during production, provides detailed information and tracks sales, stock levels and availability.

Every time a garment is sold off the rack, Zara's system sends that information to the warehouse system so that the item can be shipped to the showroom. The same system allows online shoppers to check if the item is in stock at their local store before making a purchase.

The ease of scanning RFID tags also makes stores more convenient: Zara says its in-store inventory ends in 2 hours compared to 24 hours before the RFID-based system was introduced.

Zara's approach to RFID fits into a broader trend toward shelf monitoring in retail merchandising. Startups like Reply And Eversight, use RFID and in-store cameras to help brands manage shelf placement and analyze the results of promotions or in-store displays. By using AI to analyze the data and identify trends, their software helps companies optimize their promotion strategies.

Today, new technologies make it possible to add information functions to standard RFID tags. Burberry, for example, uses RFID tags not only to track the movement of goods and verify their authenticity, but also to help customers during the purchasing process. Products in more than 450 Burberry retail stores worldwide contain RFID tags that interact with the Burberry app. Users thus receive information on how to wear or use them. In some stores, customers can view this “personalized” multimedia content on installed screens.

As supply chain transparency becomes increasingly important to eco-conscious fashion consumers, there is a need for a deeper, more comprehensive solution that allows consumers to see the entire process of creating a product. In this sense, the use of RFID technology is a step towards another important technology for the fashion industry: blockchain.

DIGITAL PRODUCT PASSPORT. BLOCKCHAIN IN THE SUPPLY CHAIN.

By giving commercial goods a unique digital identity, or “token,” on a decentralized, distributed blockchain system, companies can create a transparent digital history for their products. As materials, clothing, or accessories move through the global supply chain, tracking them using blockchain technology will create an accurate record of transactions based on location, content, and time of events. Digital identities can be tracked using RFID tags, QR codes, or NFC (Near-Field Communication) tags. Companies in the fashion industry are already exploring how blockchain can bring greater transparency to the clothing manufacturing process and make it easier to verify the origins of their products. For example, in 2019, Nike patented “CryptoKicks,” shoes that would be tracked and authenticated using blockchain technology. The patent suggests that the shoes would be linked to their owner after purchase using the Ethereum blockchain. Buyers will be given an NFT that is tracked and verified using blockchain technology, representing ownership of the shoe. These tokens can also contain details about the shoe’s design, colors, and other attributes. In addition to tapping into the NFT craze, the ability to digitally authenticate shoes will make it easier to combat counterfeiting.

In 2017, the blockchain startup Provenance  piloted a project with London-based designer Martina Jarlgaard. Idea consisted of tracking the path of goods along the supply chain from the purchase of raw materials and materials all the way to the finished garment. To record every step from the shearing of wool on the alpaca farm to its yarn and arrival at the designer's studio for further production.

Blockchain startup VeChain worked with fashion brand Babyghost on a similar initiative for its summer 2017 collection. In autumn 2018, H&M announced that it was also launching a pilot program with VeChain, using a wool beanie from the company’s Arket clothing line to test the transparency of product data in the supply chain. H&M-owned Cos has reportedly collaborated with VeChain  to verify the origin of clothing in Russia in April 2020.

At this point, blockchain-based supply chain management may be more of a marketing hype than a sustainable trend. However, as the industry and its consumers move toward more ethical, sustainable fashion, the potential for blockchain in the industry could be significant. Fashion could follow in the footsteps of the food industry, which has begun using blockchain to provide transparency into the environmental impact and labor use of its purchasing and manufacturing processes.

For example, Textile Genesis has created a blockchain-based supply chain management platform for the apparel industry. It tracks every step and supplier in garment production, including the factories and farms that provide the raw materials. In June 2021, the company announced that it had identified viscose, approximately 30% of which comes from endangered forests, in 23,000 garments made by Bestseller and Kering, its partners in the project. Supply chain transparency is an important step toward finding and using ethically sourced raw materials.

Due to changes in distribution channels in the fashion industry, many products do not make it into a traditional retail store at all.

Fashion shopping is increasingly shifting online. The global online shopping platform market is expected to grow from $9.6 billion in 2021 to $10.21 billion in 2022. By 2026, the market is expected to grow to $13.13 billion at a CAGR of 6.5%.

This transition fully affects the business of companies from the fashion industry. The process received a strong boost from the pandemic, when many consumers were forced to switch to online shopping. However, even after the pandemic period, the movement of fashion brands online continues.

In 2021, fast fashion retailer Boohoo acquired the Debenhams chain of stores, but only its brand and website. Debenhams' last physical department store chain closed in May 2021. ASOS bought Topshop, Topman, Miss Selfridge, and HIIT in early 2021, closing the brands' websites and consolidating them onto the ASOS platform. A few months later, Nordstrom, the American luxury department store chain, bought a minority stake in the four brands and announced it would sell their clothing in its department stores.

TEMPORARY STORES

Pop-up shops are another example of innovation in the fashion industry’s distribution channel. They first emerged in response to the US economic collapse in the late 2000s, but have become a global trend, affecting even high-end fashion markets such as Milan. Italian brands Furla, Genny and Paula Cadematori have invested in pop-up shops, using them to increase brand awareness and to test new concepts, categories or geographic markets. Brands and designers rent vacant retail space, usually in densely populated urban areas, for short-term use. Pop-up shops are attractive to both large established companies and smaller newcomers. For large companies, they offer the opportunity to establish a close connection with their customers in an original creative environment. And for up-and-coming brands, they help generate buzz and attract press to increase brand awareness. Pop-up shops can also be used to gauge consumer interest in new products.

As the pop-up store trend continues, several startups have emerged that are building their businesses around helping companies leverage this distribution channel. Bulletin, for example, is pioneering the WeWork model for retail, offering affordable rental options to brands looking to open units in physical stores. The company divides its stores into sections of varying sizes (sometimes as small as a small shelf space). Each section can then be rented out to interested parties on a monthly basis.

Pop-up stores and similar new formats are gaining popularity among direct-to-consumer (D2C) companies. They use the concept to generate demand through high-impact marketing events and direct contact with their consumers. For many D2C companies, pop-up stores, like traditional stores, are usually just a physical extension of their online strategy.

INNOVATIONS IN DIRECT SELLING

Information technology has brought about a major change in the direct sales channel. It is no longer about using catalogs or TV shopping. Leading D2C companies like Everlane, Bonobos, and Allbirds are creating their own markets by attracting loyal customers through effective SEO, social media, and online marketing strategies. This strategy relies on ranking high in search results, turning Instagram followers into influencers, and continually expanding their reach through consumer communications and Facebook advertising.

Once they have built their audience, D2C companies then use e-commerce tools and exclusivity-based marketing tactics. The “See Now, Buy Now” buttons offered by many social networks ensure immediate sales conversion.

Often, the process involves personalizing the custom clothing: made-to-order, multiple options, or the ability to add personalized details. Beautiful packaging and brand loyalty encourage shoppers to share stories of their purchases on social media, leading to a network effect and rapid growth of the target audience.

The modern D2C model is very efficient. Since this model does not involve mass production and deliveries to warehouses of huge retail chains, and the company interacts with customers who will directly wear clothes, shoes or accessories, overproduction and losses due to overstocking are reduced. Companies also do not have to fight for space on the shelves of retail chains or spend time on merchandising in stores. This creates conditions for a significant reduction in marketing costs. Supply chains are also optimized, since there are no intermediaries between the manufacturing company and its audience.

D2C brands own their customer interaction data, allowing them to accurately understand customer demand and sentiment. By minimizing supply chain complexity and focusing on quality, D2C companies are able to operate at higher margins and change promotion and pricing strategies as they see fit.

Everlane Company (https://www.everlane.com), for example, built its business around an ethical supply chain and transparent pricing. By publishing all elements of the company’s cost structure and comparing the final price with competitors, it quickly grew its target audience. The company states, “Fashion is a dirty business. Our goal is to leave the industry cleaner than it was when we started.”

A key part of Everlane’s strategy is its annual “Choose What You’re Worth Paying” event. Essentially a sales event, it allows customers to choose which stage of the supply chain they’re willing to ask for a discount on. It gamifies interactions with customers and gets feedback on its business model.

FROM OWNERSHIP TO USE - CLOTHING AS A SERVICE

The advent of the internet has disrupted traditional ownership patterns across a range of product categories. Consumers have traded in their CD and DVD collections for Spotify and Netflix subscriptions. Consumers’ growing desire for variety, sustainability, and affordability is fueling a shift from owning to using. The average consumer now buys 60% more items of clothing than they did 15 years ago, but wears their clothes for half as long as they did before. Clothing rental concepts offer consumers the opportunity to continually refresh their wardrobes while protecting both the environment and their wallets.

Rent the Runway is a fashion rental company that offers a single item rental or a subscription. The most basic subscription allows you to rent any four items for $94 per month. One of the main challenges the company faces is the high overhead costs of washing, dry cleaning, and shipping the clothes, as well as updating inventory with the latest designs. The company may have to rethink its inventory and pricing to address this. However, the business model of renting specific types of clothing has every chance of being successful in the future.

The global online clothing rental market size is estimated to be US$1304.32 million and is forecasts, will reach US$2803.69 million by 2030, growing at a CAGR of 9.97% from 2022 to 2030. And this is attracting startups and investments in this segment of the fashion industry market. The demand for clothing rental through online platforms is fueled by the growing desire to get designer outfits and keep up with the fast-changing fashion.

Building on this trend, the British platform By Rotation more than doubled its customer base from 12,000 to 25,000 between March and September 2020. The company not only offers its clothes for rent, but also serves as a platform for renting out your clothes. Using social media as a channel to promote its services, By Rotation has grown its customer base to over 150,000 by 2022.

Company Gwynnie Bee builds its business model on the principle of size inclusivity, offering fashion brands that include all sizes, including Calvin Klein, Adrianna Papell and others. Their service offers both rental and purchase options.

Old, established fashion companies are also beginning to test the trend. Banana Republic, Urban Outfters, Bloomingdale's, Vince, American Eagle, and Express all offer subscription programs that allow customers to rent their merchandise for a monthly fee.

On the other hand, the company CaaStle  offers a platform for creating a clothing-as-a-service business model - a "fully managed service for retailers" that complements existing retail channels. The platform is used by Vince, Express and American Eagle to implement their clothing-as-a-service model. In 2021, CaaStle also began to develop the UK market, launching a clothing rental subscription service called Moss Box.

VIDEO STREAMING & LIVE SHOPPING

Video streaming and live shopping combine elements of social media, entertainment, and commerce. This is effective because it helps create a stronger emotional connection between brands, products, and individual consumers.

According to a Retail Touchpoints report, a 2020 Coresight Research study found that the US streaming platform sales market will reach $11 billion in 2021, nearly double what it was in 2020. Further, the forecast to 2024 shows that the market will generate $35 billion in sales (3.3% of all US e-commerce).

Indeed, sales through streaming platforms in the US are still in their early stages. However, in China, this sales channel has already revolutionized, accounting for 25% of all sales. It is estimated that in the US, streaming sales could increase to 20% of all e-commerce by 2026. Clearly, this sales channel has huge long-term potential for both manufacturers and e-commerce platforms.

https://fitsmallbusiness.com/livestream-shopping-statistics/

https://pinkcoconutboutique.com/live

Traditional retailers like Nordstrom, Saks, and Zappos have quickly recognized the potential of live-streamed sales and are competing with e-commerce platforms by launching their own channels. Amazon has also begun offering live-streamed shopping. In November 2020, the company used its influencer network to promote Amazon Live, a service that sellers can use to livestream their Amazon customers. Meta is also interested in adapting its video-streaming apps for shopping. In 2020, the company launched Instagram Live Shopping, a platform that allows sellers to go live and showcase products that their viewers can immediately buy.

Not to be outdone, TikTok launched its own live shopping feature. In December 2021, it ran a campaign featuring its most famous creators. And in August 2021, TikTok partnered with Shopify to launch a pilot, sending shoppers to Shopify via links. After finding the pilot successful, TikTok decided to implement the entire customer journey from product discovery to payment in its app.

Some platforms are looking to up the entertainment factor of live streaming by adding virtual festivals and fashion shows. NTWRK, a video shopping app, hosted a virtual version of Sneaker Con in 2021. The event featured prominent hosts and celebrities, discussions and debates about design and fashion, and exclusive show releases.

Other platforms focus on the social factor. Popshop Live, a video-streaming platform backed by Hailey Bieber and Kendall Jenner, is built specifically for selling. Sellers can create accounts on the marketplace and launch their own streaming channels. https://popshop.live

Virtual fashion shows have also begun to integrate live shopping as a feature for the audience. Shanghai Fashion Week 2020 was held on Alibaba-owned e-commerce platform Tmall. Some of the outfits showcased in the show were immediately available for purchase while being watched.

Digital Twins for the Fashion Industry

Digital twins are virtual copies of physical objects, places and processes. They help fashion companies reduce textile waste, speed up production and increase supply chain transparency. These copies are not just renderings or visual representations of real objects. They contain data based on the physical characteristics of the objects and the changes they undergo. In fashion, this would mean that a digital twin of a T-shirt would contain detailed information about its fabric, design elements, stitching and size, as well as the source of its materials and the factories and warehouses it passes through.

With the help of spatial intelligence technology companies such as Matterport, digital twins are already being used to create virtual showrooms filled with replicas of physical garments. But it’s in the manufacturing process that digital twins could be a game-changer for fashion.

Imagine a fabric cutting machine. The machine and the room it is installed in are virtually replicated. They are then equipped with sensors that feed the manufacturer real-time data on many factors, including productivity, machine health and speed, and room humidity and temperature. AI analyzes this data and predicts outcomes, such as production volume and machine downtime.

Manufacturers can create digital twins of not only individual production elements, but entire production lines. When a production process is disrupted, the digital copy identifies exactly which machines, actions, materials, and environmental conditions caused or were affected by the failure.

As a result, the final product will be linked to data about where and when it was made, and even what machines or processes processed it. The digital twin of each garment will have real-time data about the movement of the physical item throughout the supply chain. This will make it difficult to pass off counterfeits as the real thing, since counterfeit goods will not have a digital twin to prove their authenticity.

With digital twins, the fashion industry can also modernize the data-gathering process for determining optimal clothing sizes, making it faster, less wasteful, and less carbon-intensive. Manufacturers no longer need to create — let alone ship — multiple physical samples to determine the right sizes and styles. Instead, they can work with their customers to digitally modify products until they are approved.

So, Adobe and Browzwear, a 3D fashion design company, created a digital sampling workflow for fashion brands in the US and Europe during the Covid-19 pandemic. With supplies down, these brands were unable to obtain physical prototypes from remote manufacturers. Instead, they used Browzwear’s 3D design tools integrated with Adobe Substance, a 3D texturing app, to create digital twins of garment models and tweak them until the textile structure, style, design elements, and garment dimensions were to their satisfaction.

Forecastedthat the virtual and augmented reality (AR/VR) market in retail will grow at a CAGR of $24.8% between 2021-2028 and reach $17.86 billion by 2028.

The virtual experience of choosing clothes and trying them on when buying online can successfully compete with physical fitting rooms. Several startups offer technologies and platforms to solve this problem. For example, 3DLOOK combines mobile body scanning and virtual fitting room technologies. The proposed application extracts key body measurements from the customer’s photos and creates a 3D model consisting of 86 parameters. They describe the user’s body: contour, shape, outlines of specific parts (head, neck, shoulders, forearms and legs), determines details of the customer’s appearance, such as hairstyle and skin tone. These parameters are then used to create a digital 3D avatar, which is used to determine the recommended size depending on the purpose of the clothing. The size is then specified for models of specific manufacturers to optimize the fit of the clothing. Finally, seasonal or collection trends are taken into account. Thus, the system issues recommendations that correspond to the customer’s dimensions, the purpose of the clothing and their preferences, and ensures a geometrically correct virtual fitting.

Company  Obsess offers a platform for creating virtual 3D online stores with the effect of presence. The company draws attention to the fact that the interface of online stores has not changed at all since the appearance of amazon.com, originally intended for book sales. Obsess is a software platform for augmented and virtual reality for shopping with the effect of presence. Its technology and cloud platform 3D Commerce allows manufacturers and retailers to create 3D shopping spaces on their websites, in mobile applications or in social networks. To do this, they can use various equipment, from 360 cameras to mobile phones.

Examples of virtual stores on the Obsess platform

Leading retailers have also begun experimenting with AR/VR technologies. In 2021, Gap bought company Draper, and Walmart bought it Zeekit https://zeekit.me , which offer 3D virtual try-on technology. Gap made the acquisition two months after announcing it would close all of its brick-and-mortar stores in the UK and Ireland to focus on e-commerce.

Online shopping using virtual reality may become more widespread as the technology improves and becomes cheaper. Fashion shows in virtual reality are already being broadcast by Victoria's Secret, Tommy Hilfger and other fashion houses.

Augmented reality is coming to both physical stores and mobile devices. Uniqlo's MagicMirrors technology allows customers to see in a mirror how the clothes they try on in the store look in different color variations. https://www.trendhunter.com/trends/uniqlo-magic-mirror.

Augmented Reality Mirror Uniglo

CONVERSE has created The Sampler, an augmented reality app for the Apple iPhone. It allows customers to virtually try on a pair of shoes. You select a pair you like from CONVERSE’s digital catalog, point your iPhone camera at your foot, and see how the shoe fits. You can share the image with your friends on Facebook. And if the shoes fit, you can click the “Buy Now” button.

CONVERSE mobile app

Allbirds uses similar augmented reality technology to offer at-home try-ons through its app. Amazon also offers virtual try-ons for shoes, clothes, and style searches based on uploaded photos.

Social media is actively promoting shopping using VR and AR. In January 2022, Snapchat Snap updated its AR Shopping Lenses to include a description of the displayed product, price, and a link to buy — all of which appear next to an image of a customer “trying on” the item. 

Now, any company can upload their product catalog to Snapchat and let users use virtual try-on with links to buy. Snapchat also gives companies access to real-time analytics on their products. And the ability to share try-on results with friends helps expand the target audience and increase sales.

The ability to use an uploaded photo of an outfit you like to search for similar items from suppliers, or the so-called digital stylist feature, is gaining popularity as a new way to find what to buy.

Amazon began offering the feature, StyleSnap, in 2019 for clothing items, and has since expanded it to furniture and home furnishings.

Google Lens allows users to upload photos of fashion items they like and then search for similar items online. Facebook has been experimenting with its own AI system called Fashion++. The software uses AI to analyze clothing and suggest changes it thinks might improve the look (like rolling up the sleeves).

Leading fashion houses are also testing digital stylists in select markets: Prada, for example, has introduced a “personalized concierge” chatbot for its Chinese website.

The demand for digital stylists from retailers has created the conditions for the development of technology platforms in this area.

Israeli company Site offers suppliers and retailers a camera button that can be placed next to the search bar on a website or mobile app. It allows shoppers to upload images of their favorite styles and then see looks “inspired” by those images in the store. The platform also offers site visitor analytics and a program to optimize the user experience. The platform counts a number of leading brands among its clients, including Tommy Hilfger, Myntra, and Kohl’s.

British company Snap Vision also offers a range of visual search tools for retailers and influencers. These tools allow you to turn iOS and Android apps into visual search tools.

Singapore startup ViSenze AI  created a visual recognition tool that “deconstructs” uploaded photos, making it easier to discover, search, and buy relevant items. ViSenze’s clients include well-known brands including Myntra and Urban Outftters.

Similar technologies are also finding application in the art market. For example, Thread Genius Inc. offers special software that allows you to search for similar art objects at auctions by image. Thread Genius was acquired by Sotheby's in 2018, which allowed the company increase sales through an online platform.

Consumer sentiment is shifting towards thrift and ethical consumption. Inflation with its rising prices is also a factor in the development of this segment. Consumers are cutting back on clothing spending to a greater extent than on other consumer categories. Buying and using second-hand goods is becoming a sustainable trend and a source of new business ideas. 

According to data Future Market Insights' (FMI) estimates that the global second-hand goods market will exceed US$32 billion in 2021. From 2021 to 2031, second-hand clothing sales are projected to grow at a compound annual growth rate (CAGR) of 11.2%.

Vestiaire Collective is an online platform where customers can buy used luxury and fashion items. The company’s quality control team checks the authenticity of the items before sending them to customers. The company grew rapidly in 2020 and claims to have around 140,000 new weekly listings in Europe, North America and Asia in 2021.

thredUP was founded in 2009 and started out selling used baby clothes. In 2021 thredUP processed 100 million items and displaced a total of 1 billion pounds of CO2. Consumers also saved a total of $3.3 billion off the suggested retail price of similar products!

Well-known brands are also creating their own platforms for reselling used items, including Patagonia's Worn Wear, which in addition to selling used items also offers repair services, or Lululemon's Like New, a program that allows you to exchange used items in good condition for gift cards from the company. The gift cards can be used to buy new clothing from the company, while the old clothes are sold in the Like New store.

Nike launched Nike Refurbished, a take-back program that collects and sanitizes used shoes and then offers them for sale at a reduced price. Shoes that are heavily worn are sent to be recycled.

The development of the second-hand goods trade has stimulated the growth of offers of various services in this area.  Startups like Trove, offer B2B services, from sorting clothes to creating a return and resale process, to developing a corresponding website. Lululemon, Levi's and Patagonia are Trove clients.

It’s important to note, however, that if second-hand clothing businesses want to position themselves as eco-friendly alternatives, they must address the barriers to true sustainability that are inherent in their business models. For example, some second-hand clothing startups wash and dry clothes, using vast amounts of water and energy, as well as detergents and synthetic fragrances that release environmentally harmful chemicals. Shipping also increases these companies’ carbon footprints.

And while consumers’ preference for second-hand clothing may reduce demand for new production in the long term, it also encourages consumers to buy more, not less. A real shift to more economical, less wasteful consumption is not in the interests of resale platforms, since they make more money when their users buy more clothes and when people have more fashionable clothes to sell.

One way brands are addressing this issue is by promoting the concept of product durability. For example, Patagonia markets the durability of its products as a way to reduce consumption and make them viable for resale.

Plastic bottles, bags, coffee grounds, discarded textiles - some small and independent companies build their business on recycling various waste and using it to make clothing.

Well-known brands have also announced new clothing lines and initiatives focused on recycled materials. H&M has committed to using only recycled or climate-neutral materials by 2030.

Levi's Wellthread x Outerknown collection tests products made from cotton hemp. The company's jackets feature removable zippers to make them easier to recycle. Processing hemp crops uses significantly less water than organic cotton.

To solve the problem of the material's rough structure, the company created a "cottonization" process that softens the fiber using very little energy or chemical treatment. The resulting fiber is almost indistinguishable from regular cotton. The company also created the Water

In 2019, Adidas launched Futurecraft.Loop, a line of 100% recyclable sneakers. The company also planned to use recycled plastic waste to make shoes.

For fashion companies looking to work with sustainable processes, the company Circular offers a dedicated raw materials library. It is the first digital showcase of fabrics, yarns, trims, leathers and leather alternatives that have been tested and verified for future recyclability.

However, the recycling process also creates secondary pollution and consumes huge amounts of water and energy resources. Recognizing this, the Hong Kong Textile and Clothing Research Institute, with support from the H&M Foundation, has created Green Machine, a recycling system that uses a biodegradable chemical, heat, and water (along with pressure) in a closed loop, eliminating any waste at all. Such machines are used in Indonesia and Turkey and will be deployed in Cambodia in 2022.

The shift to more sustainable materials and processes isn’t the only way the fashion industry is moving towards ethical business. Instead, some startups are developing new types of textiles.

Alternative materials such as plant-based, lab-grown leather could play a big role in making the fashion industry more sustainable.

There are many efforts being made in this area. For example, Modern Meadow, an American biotechnology company, ferments special types of yeast to grow collagen, one of the main components of normal leather, and then processes the resulting protein to create leather material.

Bolt Threads produces a leather fabric called Mylo and a silk fabric called Microsilk.

Bolt has attracted interest from a number of fashion and retail brands and has collaborated with Stella McCartney, Adidas and Lululemon on fashion collections.

The ultimate goal of the sustainable clothing trend is to extend the life of clothing as much as possible and to completely recycle it instead of producing new textiles. Its long-term solution requires the creation of a closed loop, which means that the entire supply chain must be reconsidered accordingly. As new technologies and business models develop, the fashion industry is gradually moving in this direction.

Just as technology is touching every aspect of the fashion supply chain, it is also being integrated into the features of the clothes themselves. The era of “smart clothes and accessories” is already here. Wearable technology has been around for a long time, from the first Fitbit to the latest Apple Watch. Today, consumers want more than just functional wearables; they want style and design.

Wear OS, Google's smartwatch operating system, is now available in watches from brands including Michael Kors, Tag Heuer, Montblanc, ZTE, Asus, Huawei, Fossil and Diesel. The Finnish company Oura offers consumers a smart ring.

It monitors various aspects of the wearer's life, including sleep quality, heart rate, body temperature, and more. The ring's shape and small size make it comfortable to wear while sleeping. This effectively solves the design problem of the large size of the device, which many other manufacturers face.

Companies, fashion leaders, and new startups are forming partnerships to create smart bracelets, rings, and necklaces. Among such projects are Tory Burch and Fitbit, as well as Swarovski and Misft Wearables.

But technology doesn’t stop at devices. It’s being built right into clothes, making them “smart” too.

In 2017, Levi's and Google teamed up to create a line of smart denim jackets that can recognize gestures and perform a variety of commands, such as playing the next song in a playlist or rejecting an incoming call. Users can customize the gesture controls in a companion app.

The jackets are made from a material developed by Google called Jacquard Threads, a “full-scale digital platform built for smart clothing.” The threads are made from ultra-thin conductive metal alloys that can be woven into natural and synthetic fibers and connected to embedded sensors. Notably, the garments are machine washable.

Samsung also unveiled its line of innovative smart clothing. Its Body Compass tracksuit is equipped with hidden sensors that can track not only workout parameters but also other fitness indicators. In addition, the company has created a smart suit - Smart Suit - which is equipped with gesture control via connection to applications.

The field of smart clothing presents many opportunities for new products. For example, Wearable X has introduced a line of yoga clothing that vibrates to prompt wearers when to move or hold a position. Owlet smart socks track oxygen levels and heart rate in children; and Hexoskin makes a line of smart shirts that monitor heart rhythm.

Innovations in wearable technology will also make clothing more functional. You can buy a jacket that can charge your phone from Baubax. Researchers at the Massachusetts Institute of Technology have developed clothing that can cool the wearer during exercise. Ralph Lauren outfitted the U.S. team with parkas with controlled heating during the Winter Olympics in Pyongyang.

Smart shoes are an interesting area for business. Nike’s Adapt line of sneakers lets wearers control the length of their laces and personalize the lighting in their shoes using an app. Under Armour’s HOVR sneakers are equipped with sensors to monitor physical activity. Lechal makes navigation-enabled shoes that connect to a mapping app and generate vibrations to guide the wearer along a route.

New fabrics made from next-generation materials may also be used in the future of fashion.

Athlete Tom Brady sleeps in pajamas with "bioceramic print", which uses body heat to produce far infrared radiation (FIR). This radiation reduces inflammation, improves blood circulation and promotes rapid recovery after exercise.

Fashion items that can change color also have good prospects for further development. Hypercolor color-changing T-shirts and mood rings were popular in the 90s, but the latest products are much more advanced.

Researchers at the Massachusetts Institute of Technology have created a system called ColorFab 3DThe system prints objects using "photochromic inks" that change color when exposed to ultraviolet light of a certain wavelength.

The first ColorFab element created with this technology is a ring that can be programmed to change several customizable colors. The main goal of the developers is to give the material the ability to change its properties and thus reduce the consumption (and production) of more and more new products.

Google's Jacquard Threads team also makes color change possible with Ebb, fabric color change technologies (developed by researchers at the University of California, Berkeley), which could one day be programmed to change based on mood or environment.

Using this technology will allow the jacket sleeve to be transformed into a display on which various information can be displayed.

Ebb materials allow the user to perform many actions that are currently performed on mobile devices - for example, alerting the user to an incoming call by changing the color of the cuff.

In January 2022, Harvard researchers even announced that they had developed soft, stretchable temperature sensors that could be integrated into both smart clothing and soft robots. This is a breakthrough in wearable electronics, as sensors are typically rigid, limiting their use in clothing.

According to the company's estimates Deloitte By 2030, the fashion market in the metaverse could reach $55 billion.

In 2019, the digital fashion house The Fabricant created a media hype by selling a virtual dress for $9,500 on the Ethereum blockchain. The dress can only be worn digitally. To do so, it must be edited to the owner's measurements in post-production.

Virtual clothing lines have become the subject of experiments not only by startups, but also by famous fashion houses. Virtual clothing is offered for both real people and digital avatars.

Tribute, DressX and Replicant.Fashion are examples of digital fashion brands that advertise “contactless,” “zero-waste” clothing because it’s virtual.

While skins used in the gaming space are nothing new, famous fashion houses have turned their attention to the fashion segment for avatars in video games. In 2019, Louis Vuitton released a League of Legends collection, and Moschino created a collection for The Sims.

Gucci is actively developing collections for fashion styling apps, exclusive tennis outfits, virtual outfits for avatars in Genies and sneakers for the game Aglet.

Ryan Mullins left his role as director of future trends at Adidas on August 31, 2019. About a month later, on October 1, he began creating Aglet, a smartphone app he describes as Pokémon Go for sneakers. With it, people can turn their physical steps into in-game currency that can then be used to buy virtual sneakers from brands like Nike, Jordan, Adidas, and Yeezy.

The concept is simple: the more active you are, the more Aglet currency you earn, although this also depends on the sneakers you choose in the app. The game features a real-world map that allows users to participate in adventures and gain access to prizes as a reward. In the app, a person chooses the sneakers they will “walk” in and use to collect virtual currency. This is important because not all sneakers are created equal. For example, a classic all-white pair of Air Force 1s will earn you 40 Aglet for each step, while a pair of Yeezy 380s will earn you 1,300 Aglet for the same number of steps. If you want to buy the Air Jordan 4 “BRED” to wear in the app, it will cost you 820 Aglet.

In this way, Aglet promotes fashion trends in the sneaker industry and creates a playful space for lovers of sports shoes and physical activity.

Fashion brands are also testing NFT sales in search of new revenue streams. In December 2021, Nike acquired the studio in an effort to expand its digital capabilities. RTKFT, which creates sneakers and other collectibles.

Luxury fashion brands have found that NFTs fit well into their strategy of creating unique items whose value comes from scarcity and intangible value.

For example, Neuno Neumo is working with several luxury brands to implement NFTs. The Sydney-based startup is developing 3D technology that allows users to buy iconic items, such as J Lo’s famous Versace dress. The lucky owners of the virtual outfits can post photos of themselves on social media. Neumo is also planning to work with game developers so that users can dress their avatars in clothes they bought as NFTs.

Clothia, a marketplace selling fashionable clothes and accessories from young, little-known designers, is hosting NFT auctions for clothing items. The winning bidders receive the actual clothes and the corresponding Clothia NFTs.

Arianee, a French startup, is developing a digital protocol that uses NFT-based watermarks to authenticate luxury goods, including expensive watches, bags, and more. The company raised $9.6 million in seed funding in March 2021. Its partners include brands like Breitling and companies within the Richemont Group. LVMH, the French giant behind brands like Tiffany and Dior, is also exploring the use of NFTs as an authentication method.

And as more and more brands and consumers interact with each other in virtual worlds, the emergence of “metaverse malls” is not too far-fetched. These malls will become new sales channels and virtual spaces where shoppers can connect with each other, explore digital fashion, and enjoy interesting experiences. Gaming platforms like Fortnite and Roblox offer glimpses of what metaverse malls might look like.

But creating a metaverse requires a huge amount of computing power, engineering talent, and money. The concept is probably still a long way off, and bringing it to life will require ongoing efforts from tech giants, innovative startups, and leading fashion companies.

As metaverses evolve, two trends emerge: the development of digital games on the one hand, and the merging of the physical and virtual worlds on the other.

The first trend is for fashion houses to create accessories and clothing items for digital gamers. Burberry has partnered with Mythical Games to provide NFT collection for the video game Blankos Block Party.

In Roblox, players can buy and wear Gucci sneakers and exercise in Nike clothing in Nikeland.

Leading fashion houses are establishing a presence in the metaverse space to strengthen their connection with the younger generation of millennials, supporting their desire to experiment with different selves and styles.

The presence in metaverses also provides an opportunity for fashion companies to use virtual communication channels to sell physical goods. On the other hand, activities in virtual space (such as signing up for a membership) can serve as a gateway for subscribers to an online experience.

For example, in December 2021, Adidas launched an NFT collection in the metaverse. NFTs also serve as access tokens for digital experiences and clothing in Adidas’ virtual story in The Sandbox. All 30,000 NFTs were sold out, with 20,000 sold in the pre-sale period and 10,000 sold on the day of the sale. The total value of this campaign was $23.5 million. NFTs also serve as a key to gaining exclusive access to physical Adidas products in the future.

By creating a store in the metaverse, companies can reach millions of potential consumers at once. A customer can visit a virtual store, purchase a product, and then pick it up in a physical store. The product can remain digital. There is already a market for this type of shopping experience: one study showed that 70% of the virtual store's shoppers subsequently made the same purchase in the real world.

Company Naver takes the possibilities of virtual fashion even further. By combining augmented reality, facial recognition and 3D technology, the app's users Zepeto can create 3D avatars modeled after themselves. As of 2022 The app has 20 million monthly active users, nearly double the number of users registered in 2021, amounting to 290 million visitors in annual terms.

A significant portion of this audience is made up of people born in the 21st century. The uniqueness of its audience has attracted Zepeto to major fashion brands such as Ralph Lauren, Dior, and Gucci, all of whom have launched their virtual collections on the platform.

It’s worth noting, however, that the NFT craze may run counter to the principles of a green economy. NFT transactions are energy-intensive, especially when they occur on a blockchain that uses the proof-of-work concept, as Ethereum does. By one estimate, it takes an average of 369 kilowatt hours (kWh) to mint, offer, sell, and transfer a digital token like an NFT. (For comparison, if you use a microwave for an hour, you use 1 kWh.)

Synthetic media is content created using AI. Algorithms take voices, videos, photos, text, and other types of training data and then create realistic digital content. This software can be used to imitate the appearance, sounds, and behavior of specific people.

Fashion brands can use synthetic media in a variety of ways. For example, the technology can speed up the creation of digital content for e-commerce product pages by quickly creating images and videos of people wearing new styles.

With restrictions preventing major events, Balenciaga held a deep fake fashion show in 2021, featuring clones of a real model whose face was “photographed using photogrammetry and scanned using computer graphics.” 

Advances in technology, such as pose iteration, can make synthetic models extremely realistic. AI-generated human models can speak multiple languages and quickly adapt to different audiences. Eventually, companies may find that AI-powered voice and video synthesis can be cheaper than hiring human models for some marketing campaigns.

Companies like Synthesis, are already demonstrating their capabilities in this area. The AI video synthesis platform created a video of David Beckham speaking nine languages to raise awareness of the Malaria Must Die initiative. Companies like Axiata Group, Accenture, and McCann have also used Synthesia’s technology in their marketing campaigns. And while synthetic media technology is still in its early stages, it’s promising enough to make fashion companies take notice.

Lil Miquela's Instagram account shows that a computer-generated model can become an influencer — as of March 2022, the account has 3 million followers. The model wears Prada, has worked with fashion magazines, and has appeared alongside real models in advertisements.

Other brands are joining the trend - Dior, for example, created a virtual version of the human model Angelababy. Prada and Balmain created digital models to showcase their designs and communicate with consumers.

The rise of virtual influencers is opening up new opportunities for companies that produce animated characters and digital avatars. Sidus Studio X, A South Korean film and animation company, Rosie created a virtual human, who has signed more than 100 sponsorship deals and is estimated to earn at least $800,000 in 2021. The studio designed Rosie to look like a typical representative of the 21st century generation and used 3D modeling and computer graphics technology to create more than 800 facial expressions and movements for him.

The popularity of virtual influencers is leading to a rise in AI-generated content. For example, Lil Miquela’s Brud, which was acquired by NFT developer Dapper Labs in late 2021, wants to give fans of influencers the ability to create their own virtual models and develop their storyline. This could herald a future where companies use virtual models to engage with fans and consumers. In fact, it’s now possible to book virtual models for events through a modeling agency. Digitals.