Suffering from the consequences of the Pandemic, the fashion industry after 3 years has begun to find its feet but the journey ahead is not as simple as one might imagine. The Pandemic acted as a catalyst and forced major fashion organizations to question their traditional mode of doing business. Changing consumer behavior, the emerging digital frontier, and a highly volatile demand are some of the factors that are forcing fashion organizations to reevaluate their key priorities. The fact is, the nexus for growth lies with adaptation to changing consumer behavior and by being on the forefront of digitization.
According to Mckinsey, in 2020, 7 percent of fashion companies left the marketing in entirety, either due to financial distress or because they were bought by the competition.
Tying the loose ends
One of the recurring patterns over the last couple of years is the acceptance and undisputed relevance of digital acceleration. Partly catalyzed by the Pandemic and partly due to changing consumer behavior, it is apparent that the need of digital adaptation is important to survive for fashion organizations. Hyper-interactive digital environments and investment towards supply chain transformation must be taken into consideration as digitization is now multi-dimensional.
Source: Mckinsey Client Benchmark 2021 Fashion companies are investing in advanced technologies to cater to the ongoing supply chain disruptions.
The State of Fashion & its Challenges
The current state of the fashion business poses several challenges including:
Logistical Gridlock
The fashion industry is volatile. The industry is riddled with an intricate web of global supply chains that are under tremendous pressure and disruption. The ongoing geopolitical crisis along with evolving consumer behavior, is pushing the fashion industry towards turmoil. These factors have resulted in logistical gridlocks, increased shipping costs and inept sourcing models. Supply chain professionals must rethink their strategy and leverage cutting-edge technology to build greater flexibility so that they can keep product flow in-tact with consumer demand.
Consumer Shifts
The Pandemic drastically altered consumer behavior and not just in a specific fashion category, rather the entire fashion purchasing behavior evolved. This purchase behavior pattern included irregular spikes and even lulls of activity which was a cause of concern for many. In such situations, investing in traditional eCommerce capabilities might not be as effective as one might think. Consumer demand isn’t something that you can ignore as it can make or break your business. Hence, adaptation to modern technology is vital.
Inept Sourcing
It would be right to say that the fashion industry faces a plethora of challenges and sourcing effectively is on top of the list. Fashion sourcing has been crippled due to demand volatility, logistical challenges, uncontrollable inflation, and supply chain disruptions. It is vital that fashion organizations must move towards digitizing their supply chains by leveraging analytical decision making and improve the overall operational process.
In fact, nearly 50% of companies have started investing in digital transformation to achieve speed and flexibility in their digital sourcing processes.
Planning Intelligently
Everything is interconnected. Supply chain disruptions, inept sourcing, changing consumer behavior and the overall impact of digitization must be addressed with advanced technologies including AI/ML. One of the major reasons why companies face inefficient processes is their lack of investment in AI technology. Automation is the key to streamline all processes and it improves the overall efficacy of your operations. With intelligent planning, fashion organizations can leverage automation to drive enhanced decision-making that leads to great business growth.
Newer horizons are a sight away
There is no denying that the fashion industry was severely disrupted due to the Pandemic. However, the challenges give us an opportunity to make things better. Fashion organizations must expand their horizon and look for ways that can enhance their overall outcomes. Investing in newer technology can be the first step towards success. Get in touch with our experts.