The fashion industry is undergoing an AI revolution
- The fashion industry is one of the largest sectors and amount to 2% of global GDP
- AI applications are increasingly being blended into the dynamic fashion world
- Retailers are reaping the benefits of AI in inventory management and customer service
In 2018, the fashion industry accounted for up to 2% of global GDP, responsible for about US$3 trillion. The following year saw the e-commerce fashion industry amounting close to US$520 billion. The stakes are high for a dynamic and glamourous sector.
Adding to the mix, artificial intelligence (AI) is set to revolutionize the fashion industry by providing fashion brands with greater intelligence. With the power of AI, fashion companies can gain insights into fashion trends, purchase patterns, and guidance for inventory management. Inevitably, AI will supercharge the fashion industry by scaling up business operations with more intelligence added to the decision-making process across its value chain.
Beginning with inventory management, AI can be applied to increase productivity within stores and digital platforms. For instance, AI can ensure the record of sales and returns are securely and accurately documented. In combination with the available products in stores and incoming stocks from warehouses, AI is efficient in helping retailers keep track of inventory.
Taking it to a higher notch, large streams of inventory data can help businesses predict the amount of stocks needed in specific stores and plan ahead for warehouses to deliver high-on-demand products, ensuring no sales are lost.
Capgemini revealed that the global annual spending on AI by retailers is projected to hit US$7.3 billion by 2022 and AI could potentially help retailers save US$340 billion annually due to optimization in processes and operations.
Global brands such as H&M have been enlisting AI-inspired solutions to boost their business operations. By employing AI, the clothing-retail giant is able to organize and allocated masses of unsold stocks to stores with high demand, reducing the need for discounted sales. Essentially, H&M is able to optimize their supply chain and inventory management, reducing the number of wasted clothing.
In the back-office, AI is weaving seamless operations in retail. In the front-office, AI is emerging as a familiar face for shoppers online.
What’s driving the growth of AI in the fashion industry is also a rising demand for hyper-personalization. This idea of superior personalization can come in the form of customer experience when shopping, such as the option to try on a variety of products at the comfort of one’s home, the ability to customize products to suit a shopper’s individual taste or simply the quick response to queries that AI advisors have been known to fulfill.
For instance, UK online fashion company Asos launched an AI-powered tool to help shoppers find the perfect fit, a notorious flaw in online shopping as customers are unable to try on a garment before purchase.
The new AI sizing tool, called Fit Assistance, provides a recommendation after asking shoppers a list of questions such as age, height, weight, and body measurements.
“This recommendation is based on the size that people like you bought, and whether they returned it,” as stated in the platform. Furthermore, Fit Assistance also reveals the percentage of shoppers that were satisfied with the recommended size.
Basically, the deployment of such AI assistance not only helps with consumer satisfaction but also help retailers mitigate the drastic costs of free returns policies and returned goods that are known to cost the industry billions of dollars.
Essentially, AI offers a list of benefits that will assist the fashion industry to thrive in a consumer-driven era through optimized inventory management and enhanced customer services.