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AI, VR and AR: The Shift to Demand-Driven Fashion Supply Chain

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AI is a top investment priority for 56% of industry respondents globally, and the adoption of digital technologies throughout fashion supply chains remains a priority today, as it allows for long-term gains, including shortening the “last mile” to circumvent production and transportation disruptions. But could it also enable the shift to an on-demand model?

Fewer human touch points to reduce risks and costs

Because of the unprecedented disruptions caused by the pandemic, and the soaring costs of shipping and production since the war in Ukraine started, many fashion players are seeking to reduce the human touch points within their supply chains to reduce risks and inefficiencies while increasing visibility through data collection and setting up more agile production systems.

Hence robotics/automation and barcodes/GTIN, as well as 3D printing, micro-factories and IoT, ranking as high priorities in terms of investments in the next five years, according to our Voice of the Industry survey results.AI, VR and AR Chart 1.svg

Indeed, more and more fashion players are deploying bots that can work around the clock and will be unaffected by any future pandemic. Automation can also help offset the costs of proximity manufacturing.

For example, since 2020, Nike has deployed over 1,000 “collaborative robots” or “co-bots” that support its factory employees with sorting and packing sportswear products, allowing it to ship out orders faster and reduce inefficiencies. More recently, the company launched BILL (Bot Initiated Longevity Lab), which is a robot-augmented system designed to clean and repair shoes, with selected customisations.

Trend forecasting: One of the most profitable future avenues for AI

The same survey, however, shows that the cloud, AI and IoT are the technologies set to benefit from even more investments in the next five years among industry professionals.

Analytics through these technologies can be used to predict when a consumer may order an item, thus enabling the retailer to get the product closer to the consumer before the order is placed, reducing shipping and inventory costs.

For example, Levi Strauss & Co has developed a Google Cloud-based data collection portal that uses AI to make informed pricing decisions, predict demand and optimise fulfilment. In fact, with the development of visual search engines, trend forecasting is set to become one of the most profitable avenues for AI. Combining inventory tracking with AI’s demand prediction tools could give brands a significant competitive advantage, allowing them to plan the right designs in the right quantities, in a timely manner.

Client-facing VR/AR tools: A real game-changer

Even if VR/AR only ranks as sixth priority in terms of investments, according to our Voice of the Industry survey, these technologies have great client-facing possibilities and are essential to invest in. Hence many fashion brands building equity among the metaverse pioneers since 2021.

Client-facing VR/AR tools have the potential to drive the shift to a more demand-driven supply chain, as tech giants like Snapchat and Meta make 3D assets, try-on tools and digital avatars more accessible.AI, VR and AR Chart 2.svgIn a world where VR/AR would be mainstream, trying on NFTs and digital garments before buying their physical copies could be the new way consumers buy fashion items, as illustrated by the Voice of the Consumer: Digital Survey 2022 which shows trying on a virtual product or service as the virtual activity gathering most interest among consumers globally.

In such context, virtual garments like those produced by DressX for Farfetch influencers recently could become prevalent and enable brands to secure preorders of digital versions of items yet to be produced. This would prevent all waste and costs associated with unsold inventories, issues that brands might soon have to deal with to comply with the law, as various environmental legislations are shaping up in different parts of the world, starting with the EU and its Strategy for Sustainable Textiles.

For more information about this topic, please read our briefing, Transforming Fashion Supply Chains in a High Inflation Environment.


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