Our regular analysis selects one or more news stories from fashion technology, and presents The Interline‘s take on why they matter to our global brand and retail audience – as well as what they might mean for the longer-term future of fashion. As always, this analysis is also delivered to Interline Insiders by email – and signing up continues to be the best way to get a fresh look at the fashion technology news, completely free, in your inbox.
The past three years, the first three of the 20s, have been nothing short of roaring. The fashion industry, like many others, saw status quos being refreshed, age-old cultural norms shaken up and replaced, and we caught glimpses of how technology will continue to be fundamental to fashion going forward.
Stepping into 2023, it is to be expected that certain activities that we saw in 2022 are going to continue. The first is that consumers’ willingness to engage with brands appears to be at an all-time high. For brands, this provides a host of opportunities for connecting with customers, experimenting with non-traditional means of advertising, and data driven insights into constantly-shifting consumer demand. Other factors also remain at play, such as the volatility of the global market, and its potential to affect material sourcing, securing factory capacity, controlling costs and more.
The Interline believes that technology will be instrumental to helping brands, retailers, and their suppliers to both cope with challenges carried over from 2022, and to capitalise on new opportunities presented by a new year. There have been advances in NFTs, augmented reality (AR), and artificial intelligence (AI), alongside heightened sustainability requirements, and the pressing need to scale digital product creation. The year ahead is likely to be defined by practical implementation of the bold ideas and strategies put in place during the disruption of the last few years.
In this first weekly analysis of 2023, The Interline looks at the twelve month horizon to share our perspective on how fashion-specific challenges and trends are evolving in the direction of practicality, and on how global technology and tech-adjacent changes are likely to influence the way fashion thinks about technology in 2023.
NFTS: as the hype fades, reality sets in
Up to this point, there has been substantial hype around NFTs. Some innovations that have emerged have been hype-worthy (think: ways to purchase luxury goods and real estate, access to fashion shows and shopping in the metaverse). Going forward, it’s the hope that there will be a continuation of the initiatives put forward by those brands who had the clearest vision for real, practical use cases for NFTs – brands that are less likely to be deterred by events like FTX’s demise. Take Nike, whose pioneering investment into the space will be less closely tied to how people feel about crypto and will instead be driven forward by the brand’s resolve to become a primary force in digital creativity, collection, and community in a way that’s consistent with Nike’s already-established brand identity and the natural fit between sneaker culture and digital collectibles.
It’s possible that the term NFT itself will become a thing of the past – either to shed negative connotations, or as part of brands’ desires to move as much of the ecosystem as possible into their own spheres of control – and that going forward there will be different monikers for the benefits that they hold. And the benefits themselves will become the focus, rather than the technology surrounding them. We could potentially see the headline-grabbing, substance-lacking NFT news fade away, but more use cases centred around pillars like the ones Nike has built its strategy on remaining and improving.
Sustainability through technology: unlocking accountability and transparency
Some tangible changes are coming to the meaning of sustainability near you. For example, new legislation, named Decree 2022-748 (or AGEC), requires importers and producers of garments, shoes, and home textiles in the French market to provide detailed labels regarding the environmental qualities and characteristics of any consumer product. While progress has stalled on some headline regulatory proposals, it’s likely that other countries will soon follow suit, bringing the timeline for substantiating sustainability commitments with objective, first-party data much closer than many brands will find comfortable. This is a concrete step in the right direction for the sometimes nebulous and opaque nature of sustainability claims as they stand today, and it marks a pivot supply chain visibility, transparency, and accountability. The Interline will be involved in the discussion around how technology can support the growing requirement for more concrete disclosure on-stage at Munich Fabric Start, Première Vision Paris and at SOURCING at MAGIC, all taking place over the next few weeks.
Digital Product Creation (DPC): scale, but at what cost?
DPC has quickly become one of fashion’s hottest topics, and one of its biggest investment priorities. In our first-ever DPC Report, our analysis found that, based on annual recurring software subscription revenue alone, the DPC market is approaching the same market size as other enterprise software (like PLM). This year we expect that market to grow even further, driven by a huge demand for digital assets. This growth is likely to come from brands, retailers, and their partners turning vision into action: whether that means starting to create in 3D for the first time or scaling up DPC strategies that are already in place, but that haven’t yet been extended enterprise-wide.
The biggest barrier, though, remains the practicalities of 3D asset creation at scale: with both process evolution, a shallow talent pool, and ecosystem maturity standing in the way. Take the skills gap, for example. According to the 3D Skills Report by Adobe Substance 3D and It’s Nice That, 3D design skills are more in demand than ever before, and there is much more work than there are people trained to take it on. This applies across industries, but is especially true in fashion, where education is only now catching up with the requirement for digital-native working.
The power of Augmented Reality (AR)
2022 revealed that AR is a powerful way to engage with consumers. This was shown through experiences presented by big brands and research. For instance, Snap Inc. asked 4,000+ shoppers about their experiences with AR and 80% of them said that they would be more confident to spend if AR was a part of the shopping process. This is representative of the primary power of digital assets: they allow people to make decisions with confidence; whether those are creative choices, commercial choices, or consumer buying decisions.
An important component of enabling consumers to make informed buying decisions based on digital assets will be to have those digital assets serve as cornerstones of a multi-channel brand presence that meets the consumer where they are, and should include the full extent of real-time channels and collaborations. The most popular spaces and channels are arguably on store websites, in video games, TikTok, and Snapchat. What will be essential is to bring digital assets into these channels and, by extension into the real world as AR overlays, taking digitally-enabled advertising beyond virtual photography and into immersive experiences that cover engagement and transaction.
Integrating Artificial Intelligence (AI)
AI has enjoyed a lot of publicity this year with society-redefining generative creation of text and images. However, behind the scenes, the more practical side of AI might be having an even greater impact. Harvard Business Review estimates that more than 50% of companies across different industries have adopted AI in at least one function in their business. In many cases, these applications of AI will go unnoticed by the public; they may take the form of data gathering and analysis, trend prediction, intelligent product tagging and other behind-the-scenes use cases.
As these ‘hidden’ applications of AI build up, and their benefits compound, the likely outcome is that fashion’s primary use of machine learning will be enhancing and integrating all the different components of the technology stack. While these applications may seem mundane, over time their benefits are likely to become more obvious. So this year, we may see significant leaps in the accuracy of forecasting and planning as consumer purchasing insights as a wider range of data points are used to intelligently inform design, development, sourcing, and production of new collections.
This might be less immediately compelling than generating art, conversation, or images from text inputs, but its effects on fashion’s profitability, stability, and creativity are likely to be just as pronounced as we begin to see precisely how difficult a year 2023 proves to be.
And the best from The Interline:
We started 2023 with an examination of the vision for blended digital-physical fashion, in the first exclusive of the year from our friends at The Digital Fashion Group, featuring perspectives from PlatformE.
This week has also seen us examine the up-and-down fortunes of wearable technology – a category that was quickly taken over by smartwatches, but one that’s now being rightfully re-evaluated as an opportunity to capture data and create meaningful experiences for consumers.
With 2023 set to be a year of increasing scrutiny being placed on the environmental and ethical impact of fashion, brands and their partners are looking for ways to measure and manage the carbon footprint and greenhouse gas emissions of their operations. We published a new manifesto from Mark Harrop this week, which makes the case for PLM (enhanced by integrations) as the engine for those calculations.
Our series of digital product creation interviews continues in 2023, with independent releases of our conversations with executives from Centric Software, Embodee, and Kalypso – all of whom shared different angles on the future of 3D and DPC.
To see these interviews in context, alongside exclusive editorial, detailed technology listings, and market analysis, download our full DPC Report – completely free.