It’s become something of a truism to say that the pandemic has catalysed uptake and use of the various technologies that reside under the umbrella of digital product creation (DPC). After all: with non-digital tools taken off the table, digital alternatives were all that remained.
But is that common refrain backed up by actual data? Does it apply equally to different sectors of the fashion retail industry? And different divisions and processes within individual organisations? How successful have brands and retailers been at turning crisis-management into lasting change? And what barriers stand in the way of realising the vision of digital product creation that’s connected all the way through the cycle of create, make, and sell?
Working in partnership, Kalypso, The Interline, and the Indiana University Kelley School of Business Center for Education and Research in Retail set out to answer those questions and more in a far-reaching, global survey of digital product creation in late 2020.
Over the course of several months, we solicited detailed input from more than forty leading brand and retail businesses. The panel of participants included a cross-section of revenue bands and business sizes – from the growing small-to-medium enterprise to the multi-billion multinational.
Almost every company we surveyed designed and developed apparel; many also created or sourced accessories, equipment, and footwear; around a quarter traded in hardlines and home goods, too. And the answers we received came from a broad distribution of job roles, from executive and operational functions, to product development, IT, and merchandising.
How the pandemic is steering DPC strategies
First: the validation of the assumption that the last twelve months have led to an increase in adoption and uptake of DPC. The vast majority (more than 90%) of the retail businesses surveyed agreed that the pandemic has heightened the need for digital transformation in design, development, and merchandising. And a related datapoint reveals that this opinion is shared top-to-bottom in most organisations, with close to 80% of Product Leaders stating that their digital transformation strategy has been reframed by COVID.
Given the diverse nature of the organisations that volunteered their time for this data collection exercise, it’s fair to say that recognition of the pandemic’s impact on the urgency of digital transformation is universal. Similarly, the majority of people – taking this survey as a representative sample of retail as a whole – appear to have already reshaped their strategic direction to respond. And while the form those different strategies take varies dramatically from business to business, the inescapable fact is that the pandemic has altered the speed and direction of digitisation.
Proven results, but only at the proof of concept stage
To help quantify the scale and shape of this change, our joint from 2020 can be compared to the same aggregate findings from last year. (This is the fifth time that Kalypso has run this survey or one much like it, but the first time The Interline has partnered in the data collection and interpretation.)
Responding to the survey, retail businesses were asked to gauge their current maturity in eighteen different areas of digital product creation, which are bundled into three groups: Discover & Create, Make, and Sell. And at the same time, participants were asked to extrapolate from their current position to where they intend to be in two years’ time for each of these individual areas, and consequently where their investment is likely to be focused.
Together, we measured both current and future states on a 1-5 scale, where 1 signifies either an extremely early examination of the potential of a particular area, or no attention having been paid to it at all. The maximum value of 5 is used to represent a use case that has seen extensive or even company-wide adoption, with significant uptake among fully-trained end users. Between those two poles are a range of states from initial strategy and proof of concept, to the start of a proven idea being scaled.
Comparing this year’s data against the same set from the previous survey, we saw modest improvements to current DPC maturity essentially across the board, with the most significant strides being made in design, development and production rather than further downstream. On aggregate, the industry made its most notable progress in areas like voice of the customer integration, visual line planning, development task automation, and virtual testing and simulation. Although an important outlier was virtual consumer try-on, which accelerated from almost a standing start to become a strategic priority.
Keeping our attention fixed on the present for the moment, it’s important to note that, on average, only 8 of the 13 use cases we surveyed have advanced far enough to have formal strategies and plans built around them. And none have yet reached stage 3, where formal proof of concepts have been put in place, although 3D product design and digital product development are the two use cases that have come the closest.
The difficult transition from segmented success to long-term strategy
Obviously these maturity stages are averages, since many brands have clearly implemented isolated proof of concepts and indeed scaled beyond that point, but their progress is still being offset in most areas by brands and retailers that have not yet reached a similar point.
And this demonstrates two further indicators for how DPC technologies are being adopted industry-wide: with high variability, and in a segmented way. The organisations that have made the most significant inroads into 3D design, for instance, are not necessarily the same ones that have focused their attention on virtual showrooms and immersive store planning applications.
Crucially, while this information is valuable as an indicator of the wide-ranging potential of 3D and digital product creation (concentration in just a few areas would suggest that it was either naturally limited or being artificially ringfenced), it also demonstrates the challenge the industry faces in integrating use cases of highly variable maturity levels.
This is also reflected in a key statistic: only 59% of the organisations that took part in our survey believe that they have a clearly-defined strategy for joining up these different areas and building a product-focused digital transformation initiatives that are fit for the future. But it’s important to note that the maturity of the technologies themselves is not the root cause of this scepticism towards realising a more cohesive vision for digital product creation; process inertia, cultural considerations, and the perceived unavailability of qualified talent were the most commonly-cited barriers.
Of course the usual technology adoption teething pains also applied: budgetary constraints, resources being torn between multiple projects, and insufficient consideration being given to the impact that deployment has on people and related processes. Generally speaking, though, the industry now faces considerable uncertainty around the process of translating segmented use cases and short-term risk management into lasting, enterprise-wide change.
Current barriers are not preventing big plans for the near future
But if brands and retailers are concerned about the practicalities of getting from here to there, they certainly do not doubt DPC’s long-term potential. When we look at the aggregate future state, optimism reigns: nearly every use case under the Discover & Create banner is targeted to have advanced beyond proof of concept and into its scaling phase by 2022-2023. And the industry as a whole has similar ambitions for the manufacturing side of digital product creation: virtual fit testing, automated cutting and sewing, virtual testing and simulation, and even additive manufacturing are all expected to have reached or exceeded the proof of concept stage within the next two years.
In fact, only one area falls short of the overall positive outlook: customisation. And this will hardly be surprising, given the complexities of scaling that use case are something of a perfect storm of integration. While customisation front-ends for eCommerce platforms exist, the combination of design, development, and production agility that needs to exist to back them up is not something that any brand or retailer should underestimate.
Process, culture, and talent could be obstacles to the industry’s ambition
So where does this leave DPC in 2021? In a better position that it was in early 2020, evidently, but also at something of a critical juncture where quick wins that have taken root – such as replacing physical samples with digital ones – now need to be parlayed into enduring, enterprise-wide transformation.
To pass this inflection point, there is education to be done. Both in the literal sense, to fill the talent gap that brands and retailers see as reining in their goals for digital transformation, and in the sense that everyone from the executive sponsor to the end user needs to become more conversant and more comfortable with the idea of taking isolated DPC initiatives and integrating them into a full digital transformation strategy.
At a time of historic disruption, it’s clearer than ever that fashion has appetite and ambition for change. And technology vendors have also done a lot in the last twelve months to accelerate their roadmaps. So, with this latest benchmark established, we are looking forward to seeing where DPC goes from here.
- Visit the Kalypso retail page to download the full findings from the 2020 Digital Product Creation Maturity Survey, and to see how your digital transformation stacks up against the industry average.
- Explore The Interline’s archive of 3D and DPC material here.
- View the archived recording of our post-survey briefing webinar and panel discussion, featuring speakers from Kalypso, The Interline, PVH America, Salomon, and The Fashion Innovation Agency – coming soon.