Released in the first-ever DPC Report 2022, this executive interview is one of a twenty-part series that sees The Interline quiz executives from major DPC companies on the evolution of 3D and digital product creation tools and workflows, and ask their opinions on what the future holds for the the extended possibilities of digital assets.
For more on digital product creation in fashion, download the full DPC Report 2022 completely free of charge and ungated.
Digital product creation in fashion seems to have reached critical mass, with more brands than ever kick-starting or scaling DPC strategies. Why now?
We initiated a digital maturity survey in 2016 while also serving clients in the space, and for the first four years of collecting data, we observed organizations making slow but steady progress. The rate of adoption changed in 2020 as COVID-19 and pandemic-related supply chain issues were an inflection point and a massive driver of acceleration in 3D fashion capabilities. Travel restrictions, factory and showroom closures and low availability of physical samples forced brands to work and make decisions in different ways, with different tools.
Organizations that were on a digital product creation journey prior to 2020 found themselves in a strong position to leverage their capabilities and react to the situation. Those who were behind on the journey quickly understood the potential benefits, and many rushed to partner with vendors and other 3rd parties in an effort to catch-up.
What have been the key advances in DPC maturity at a whole-industry level over the last twelve months, and why do you think those areas in particular have progressed the most?
Our 2022 digital maturity survey shows adoption has increased dramatically across all capabilities in the digital thread since our last data point in mid-2020.
The most adopted areas in 2020 were in the “Discover & Create” space; these progressed steadily over the last two years.
What surprised our team was the extent to which “Make” and “Sell” capabilities also accelerated as brands looked for ways to leverage 3D and digital across their full value chain. In the “Make” space, brands looked for new digitally enabled ways to collaborate with their factory partners in lieu of traveling and using physical prototypes. In the “Sell” category, brands accelerated their use of rendering technologies to share products and experiences with wholesale customers and consumers. The data collected on “Sell” capabilities also captured some of the intense hype over the last 18 months around digital products (NFTs) and metaverse technologies.
Now that the world is coming out of the pandemic and trying to get back to a “new normal”, many organizations are catching their breath and resetting their DPC initiative plans. While great progress was made over the last two years, it was rarely aligned to the roadmaps they had planned against before March 2020, and there are many opportunities to realize the potential of digital product creation.
Conversely, where has industry-wide progress either stalled or started to fall behind the industry’s ambitions? What do you think are the root causes?
While our survey indicated that retailers are adopting and scaling digital product creation capabilities across the digital thread, our direct experience with clients tells us they are still not mature in these capabilities. Organizations may have some users trained and potentially even working with 3D or digital capabilities, but companies are still falling short of many of their goals.
We observed that brands underinvested in foundations over the past two years as they focused on fighting supply chain and calendar fires. DPC initiative teams were scrappy and delivered value where and how they could in an effort to solve existential business threats. During this time, there has been a lack of consistent investment in improving underlying product technologies such as product lifecycle management or digital asset management, architecting integration to connect data and assets across the ecosystem, building automations that drive user efficiency and evangelizing via a well-defined organizational change management plan. We believe that now is the time to reassess the status of these foundations and ensure brands are on good footing to transition from basic adoption to true maturity that drives ROI.
Do you believe the primary value of digital product creation will be realised in digital-for-physical use cases (i.e. using 3D assets and digital workflows to optimise the production of physical end goods) or digital-for-digital opportunities such as the sale of digital goods, or the use of digital assets in real- time and immersive experiences? And do you see those as complementary objectives, or are they liable to compete with one another?
We strongly believe in the value of digital-for-physical use cases, especially when those assets can be reused and leveraged across the value chain. While there is immense potential to leverage these capabilities and change the way a company works from end-to-end, brands should be clear- eyed about the size, scope and complexity of this kind of transformation. Digital-to-physical is hard, and brands and technology partners are constantly working to solve challenges that make the concept of “digital twin” a reality in the retail and apparel industry.
Digital-for-digital opportunities have accelerated recently, and we think they have been competitive with digital-for- physical. Attention and investment that was needed for building DPC foundations was likely diverted to explore digital-for-digital concepts. Digital goods are unconstrained from the reality of physics and production, making them easier to stand up in the short-term. While some brands were able to capitalize on the hype by offering their own NFTs, the market for many digital goods has collapsed and long-term potential value creation for brands is very unclear. Exclusively digital f rameworks can completely dissolve or be supplanted as fast as they are stood up; brands should recognize that the impact of a misstep in this area could do more damage than good.
There have been benefits to the digital-for-digital hype. It has elevated executive-level visibility to the concepts of product visualization and rendering and exposed the need for visual effects (VFX) resources and digital artists. I am also bullish on the metaverse as an incubator of new venues and experiences where consumers will one day shop for physical goods and disrupt the outdated eCommerce paradigm. This will drive forward-looking brands to scale digital product creation and to connect their design and production pipelines to feed these new omni-channel marketplaces.
For an organisation that is just beginning its DPC journey, what use cases should they be prioritising to realise the most value in the least time? And for businesses that are further into that journey, how should they be looking to set – and meet – their strategic DPC targets?
We strongly suggest that organizations start with a focused effort against strategy and leadership alignment. Brands will appropriately prioritize different use cases based on many factors such as product categories, product mix and channel strategy, and leaders need to identify the most critical benefits DPC can unlock in the context of broader business imperatives. Because the digital thread is end-to- end, cross-functional leaders will need to be aligned on the benefits, commit their support and hold their teams accountable to drive the desired outcomes.
Regardless of whether your organization is just starting or further along in the journey, we always recommend building and maintaining foundations that will support and accelerate these new capabilities. A technology ecosystem that enables seamless collaboration and ensures clean, well-governed data will lock in value with users. The industry seems to be refocusing on building impactful technology ecosystems to drive scale and user adoption, but brands also continue to underestimate the level of change that these technologies will have on their resources and networks; a well-considered organizational change management approach, supported by visible cross- functional leadership support, is a critical success factor in driving maturity.
Where do you see digital product creation – and digital assets – going from here? What does the near-future look like for the industry and for your business?
Technology vendors play a key role in where things go and how fast they get there. We anticipate continued investment in the retail and apparel DPC arena and continued growth in the vendor landscape, driving greater competition and innovation. The landscape is currently complex and fragmented, with many technology vendors competing on an overlapping set of technologies and use cases. We anticipate needed consolidation that will help drive focused and more integrated efforts. Brands should dedicate time to consistently monitor the technology arena to stay on top of the latest technologies, evolutions, and trends.
I believe automation and artificial intelligence (AI) are both underutilized today and poised to make an impact in the next few years. These technologies have the potential to take DPC to another level of creativity and efficiency, and I believe we’ll see these technologies incorporated in exciting ways in the near future.
DPC leaders will be challenged to continue to deliver value in an uncertain business environment while they simultaneously architect the future ways of working. Our role as consultants who specialize in end-to- end digital transformation is to help them do both; operationalize new capabilities and technologies that can drive this value, but also be strategists and thought partners to help anticipate what could be coming next. We will continue to champion research like the 2022 digital maturity survey and other efforts to help inform our clients and partners as we all move together towards a digitally enabled ecosystem.