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-Introduction:

explore post-pandemic acceleration of tech adoption

pose introductory questions on how VR could improve CXP

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The pandemic has accelerated fashion's adoption of digital tools that meet new customer behaviours and needs. The Vogue Business and Google Summit covered a range of technologies that are top of mind for brands, and highlighted a few standout themes expected to proliferate in the months ahead.

Fashion's tech-driven future

Fashion brands are no longer experimenting with tech to gain headlines or be "first". Amid a digital push, brands are emphasising one-on-one customer relationships. Direct-to-consumer means first-party data and algorithm-driven personalisation, according to Michael Burke, director of branded apparel and durables at Google. Burberry, for example, conducts "pathway analysis" on online customers, and uses remote chat with online shoppers, says Burberry SVP of digital commerce Mark Morris.

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Fashion's future hinges on digital tools that combine the physical and digital while adapting to customer needs, including 3D design, on-demand manufacturing and video shopping.

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discuss:

which industry did the technology emerge from? (cryptocurrency market and bitcoin)

A. how did it end up in fashion? (supply chain management)

B. how can it improve supply chain management? (HBR article)

C. graphic of FTI 2023 Traceability Score

who are the early / first adopters in fashion? (martine jarlgaard in 2017)

write:

create innovation landscape for blockchain

write about supply chain management for fashion industry

write about martine jarlgaard's adoption of blockchain

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Sociological Background to the Trend In Fashion

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Sociological Background to the Trend In Fashion

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fashion's obsession with futurism since the 1960s; reflects cultural relationship with tech

technological advancements and innovations accelerated since then

opened up new consumer touchpoints with brands

revolutionises at home / digital shopping - potential to reduce product returns

what is the benefit for consumers?

PLACE IN APPENDIX

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History - Fashion & Futurism - 1960s-90s

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History - Fashion & Futurism - 1960s-90s

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the history of retrofuturism, 1960s, 1980s-90s, 2020s.

societal perceptions of futurism and how those changed in the past 60 years as technology has rapidly advanced.

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Retrofuturism Revived: From '60s Space-Age to '90s Hacker Chic to Now - Virtual Fashion

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Retrofuturism is an ever-changing constant: The fashion industry will forever look forward, and back, to understand its role in the current cultural moment.

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Vogue Business + Google Summit on Fashion Technology

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Vogue Business + Google Summit on Fashion Technology

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An Overview of Tech Innovations In Fashion & The 10-Year Prospect

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An Overview of Tech Innovations In Fashion & The 10-Year Prospect

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PODCAST:

mention of ethics and workers rights (how could blockchain confront this)

mention of AI and its uses in production and across the supply chain

mention of Resale and link to sustainable consumption (how could AI or tech innovations boost consumer trust in the model and contribute to conscious consumption)

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In this episode of the McKinsey on Start-ups podcast, McKinsey executive editor Daniel Eisenberg speaks with Anita Balchandani, a London-based McKinsey partner who leads the firm's Apparel, Fashion & Luxury practice in the UK, Europe, the Middle East, and Africa. An edited transcript of their conversation follows.

To hear more episodes of McKinsey on Start-ups, subscribe on Apple, Audible, Google Podcasts, Spotify, or Stitcher.

Daniel Eisenberg: Hello and welcome to McKinsey on Start-ups, I'm Daniel Eisenberg.

When you think about the pandemic's impact on fashion, what comes to mind? How about sweatpants or pajamas, or maybe jeans and t-shirts? For many people, the answer would likely be really any super casual attire or cozy athleisure, the likes of which so many of us around the world started wearing regularly as our homes suddenly became (and have remained) our offices.

But far from the Zoom calls or runways, the business of fashion has been undergoing a serious makeover. As with so many other industries, the digital transformation of fashion and apparel has radically accelerated during COVID. This has impacted not only how customers interact with brands and retailers, but just as critically, how the industry operates internally, whether managing its inventory, pricing, and supply chain or designing and producing its products.

An industry that has always been (and still is) built on a foundation of creativity and artistic expression is now adding more science to the mix, embracing technology to an unprecedented degree. To help us understand how technology is fundamentally changing the business of fashion and fashion innovation, we are pleased to be joined today by Anita Balchandani, a McKinsey partner based in London who leads the firm's Apparel, Fashion & Luxury Practice in the UK, Europe, the Middle East, and Africa.

As well as helping clients with developing strategic responses to the disruptions shaping the retail industry, Anita co-leads the industry's leading thought publication, State of Fashion, in partnership with the Business of Fashion. Prior to McKinsey, Anita was the Global Head of Retail at OC&C Strategy Consultants and served as a Non-Executive Director on the Boards of Space NK Apothecary Ltd and Majestic Wine PLC.

Anita, thanks so much for joining us today.

Let's start with a broad perspective. What is the role that technology and digitization has generally played in shaping the apparel and fashion industry over the course of the past two to three years? And how did this change with the arrival of the pandemic?

Anita Balchandani: Technology has been playing an accelerated role in the fashion industry over the last two to three years, particularly when it comes to the customer-facing side of the industry. This is impacting where and how consumers are discovering brands and shopping the category, through to purchase, transaction, and commerce.

If anything, during the pandemic that acceleration of digital and e-commerce has completely step-changed; in fact, you could argue it's what kept the wheels on the bus. When the fashion industry faced the fallout of the lockdowns that took place across many regions, and stores were closed, digital was the only way you could access the category and shop it.

But the expanding role of fashion and technology has not just been about the customer-facing initiatives, but also about the end-to-end initiatives across the organization. It's how people have designed product, it's how people have flowed product through. The role that technology has played in keeping the entire fashion value chain going has been immense.

Daniel Eisenberg: There's a tendency to often think about technology and fashion in the context of what consumers or customers see and touch. But, as you point out, there's the entire value chain and the back-of-the-store story that is just as important. Can you talk about how technology is being leveraged across the rest of the supply chain in light of disruptions that occurred during COVID, and how the fashion industry is looking at technology going forward?

Anita Balchandani: I think the answer to that is two-sided. On the one hand, we're seeing, for example, that 23 percent of the investments that have been made in the fashion and retail-tech space have been in supply chain.

But if we step back, I think there is still a lot more to be done on this front. In particular, we're excited about innovations such as the role that technology can play in much more predictive demand forecasting to enable the flow of product; the role that technology can play in on-demand production; the role that technology can play at the design front end and really eliminate a lot of the waste and the long lead times related to the physical production of samples.

So I think we're still at the tip of the iceberg, or the foothills, if you will, of all that's capable here.

Daniel Eisenberg: In fact, McKinsey's recent "State of Fashion" report pointed out how that demand-centric approach is going to have to be a real guiding principle for the industry going forward, including better management of inventory and sharper focus on the best-selling, or core, brands or products. And of course, better management of everything in the supply chain means hopefully that waste can be at least minimized, if not entirely eliminated.

Speaking of State of Fashion, one of the statistics that really jumped out was that up to 73 percent of the industry had actually destroyed value in the wake of COVID. Does technology have a role to play in starting to reverse this trend? How does a player leverage technology to win in the next normal of fashion?

Anita Balchandani: First of all, you're right, that's an eye-popping stat. And, if anything, that's been a trajectory that has been advancing. So every year we see that the proportion of the industry that is value-creating is actually shrinking, with fashion arguably becoming more of a "winner takes all" industry.

Do we think technology has a role to play in reversing this? Absolutely. Typically in the industry, overproduction is a big issue-40 percent of garments are currently sold at a markdown. And that markdown is a huge source of value leakage and profit leakage in this industry. The potential impacts of technology around advance-demand forecasting, AI-guided stock management, promotion, and price optimization are huge.

Another area ripe for change would be waste, more broadly tied into toxicity and the sustainability record of the industry. Even today still only a fraction-it's less than one percent-of used products are recycled back into the fashion industry's value chain. So, again, we feel like technology has a huge role to play in sustainable materials, recycling, fashion repair, and creating new streams of propositions and revenues for customers who are increasingly mindful of sustainability.

Finally, another area that we think has huge potential is returns and e-commerce economics. We anticipate that by 2025 fully half of the fashion industry globally will be online, sold via e-commerce. The proportion that will be influenced by online will be far greater. At the same time, we also see that 93 percent of apparel retailers expect returns will continue to grow in importance and cost over the next three years. And when you look at a lot of fashion retailers' online economics, their P&Ls are pretty challenged, even as they scale. So we do believe that technology has a huge role to play there, with things like omnichannel inventory management and predictive virtual sizing.

We certainly see the potential of technology to solve some of the industry's biggest pain points and challenges, which fundamentally are sources of profit leakage.

Daniel Eisenberg: You recently did some research in the UK looking at what succeeds in e-commerce, the key outperforming factors. What stood out in those findings?

Anita Balchandani: Yes, we were trying to get under the skin of what really matters, and a few key themes emerged. First, none of what you might call the core "basics of retailing"-product, price, experience-have gone out of fashion. And, actually, making sure that your proposition is strong, effective, and differentiated is as, if not more, important in the current competitive age.

However, it is also very clear that there is huge consumer appetite for new innovation; we're definitely pushing on an open door with consumers when it comes to fashion tech. We ran another study very recently just to pulse the consumer on "adoption" rates viz and "likelihood to adopt" a number of more fashion tech-forward innovations, such as sustainable clothing, AI-driven customer service, personalized clothing, livestream shopping, et cetera. And we have been quite surprised by the huge proportions of the population that have either already tried, or indicated a very high likelihood of trying, some of these innovations, which one might assume to be still quite niche.

So it is true that the basics and fundamentals of what it takes to operate a brilliant fashion business, to some extent, haven't gone away. But there is also a lot of consumer openness to evolve that formula, drawing upon a huge host of fashion-tech innovations that are now accessible. And for players to win here, we do believe that both speed and innovation will be of the essence.

Daniel Eisenberg: You were talking earlier about the use of analytics for inventory management and predictive modeling. Is it fair to say that that until recently the fashion industry has not used these technology tools as much as other industries? Is it in some ways playing catch-up, compared to other sectors?

Anita Balchandani: On the one hand, when you look at online adoption in this industry, while it's nowhere at the order of magnitude of what you see in consumer electronics or music, it's definitely well ahead of categories such as food and beauty. You could look at that and say, "The fashion industry and its shift to online actually puts it in a pretty good relative position to other industries."

On the other hand, because the industry has long been founded on the importance and centrality of creative art design, I think it would be fair to say that the industry has been slower to adopt some of the core disciplines, or the thinking, around how you combine that art with science, how you get the best value, and how you take very effective data-driven decisions in the end-to-end system.

There's been a lot of talk, clearly, and if you look back over the last five to seven years this has definitely been part of the promise. And over the last decade, 2021 has been the high point for investment into fashion and retail tech. Yet, when you actually look at the quantum of investment, while $18 billion might put it at a ten-year peak, it is still a fraction relative to the scale of the industry.

So we do think there is some catch-up to be done, and fashion tech, if anything, is still at the early stages of its evolution. However, the pandemic has really shone a light on the criticality of getting digital and tech working effectively in the fashion industry-and how it can be a fabulous complement to the art and creative energy that goes into this industry.

Daniel Eisenberg: How does technology factor into the evolution of the in-store experience for fashion brands? Does the physical store have a role to play, and, if so, how is it changing?

Anita Balchandani: I like to think of it as the pandemic forced the industry to collapse the walls between online and stores. Traditionally, you've always seen a bit of segmentation by channel-this is our online channel, this is our store channel. With the lockdowns leaving online as the primary source of customer interaction, engagement, and purchase, many retailers simply pulled down the walls that exist between the two main channels.

There were some practical ways in which that took place. One was a huge investment retailers made in clienteling, which effectively meant that in-store colleagues could use mobile phones to engage with e-commerce customers and have digital access to the brand's inventory. In-store colleagues were able to provide brilliant service to customers who were shopping online.

We saw the rise of virtual appointments, particularly in the higher-purchase investment categories such as jewelry and watches. Many players also used the stores as a source of inventory and points of fulfillment at a time when e-commerce distribution centers were overloaded and running out of inventory.

Suddenly, the walls that existed between the two channels were really brought down, and I think people realized that that's probably how the customers actually do engage with the brand. The customers are much more brand-driven and mission-driven, rather than channel-driven. Now a whole host of innovations are really helping bring the digital and the physical together, with CRM, clienteling, customer service and experience, and inventory, as the glue that brings all of that together.

Daniel Eisenberg: You talk about what in-store workers can now do with their phones, whether it's inventory or virtual service. It almost sounds as if those people are getting additional responsibilities, empowered to do more than a traditional store worker might have, say, just a few years ago.

Anita Balchandani: Yes, and we also think that is driving a whole new level of skills and capabilities, and actually making those roles much more exciting and interesting. Because one of the things technology has the power to do is to liberate store colleagues from what you might call the more administrative, routine, and repetitive tasks to spend time on customer service, advice, and some of those other things that enrich the shopping experience and give customers added reason to visit the store or, indeed, the website.

Daniel Eisenberg: You've talked previously about the trend of "casualization" of what people are wearing, and buying often these days, especially with so many people staying home to work during the pandemic. I'm wondering to what extent you think that trend will be permanent. And does a shift like that have long-term implications for the industry, such as needing to rely on technology even more to cater to changing tastes?

Anita Balchandani: Fashion has always been centered around catering to changing tastes. And those who have been the most successful brands at any moment in history are the ones that have the had the best pulse on what the customer wants. I do think that this is where tech has a huge opportunity to play in keeping a retailer current on where trends and tastes are likely to go. You could look at data that tells you what's likely to surge next, and how you can position your offers and ensure that you've got the right levels of inventory to back that level of customer demand.

On casualization, while that is a trend that is here to stay, the data is already showing that people are back buying more glamour and special occasion-wear with a vengeance. People refer to this as the "back to the Roaring '20s": we have done some machine-learning analysis of 2021 runway collections, and you can clearly see the expressions of optimism, boldness, and self-expression.

Now it doesn't mean to say that casualization has gone away. It doesn't mean to say that, in a hybrid world when we are going to be spending more time at home than we did prior to the pandemic, that athleisure and casualization go away.

But the evidence would suggest that the role that fashion plays in self-expression, in the ceremony of dressing up, is starting to return as people are injecting their lives with more special occasions, and going back to more of a sense of normalcy, as well.

Daniel Eisenberg: Right. Folks are clearly hungry, some might say desperate, to go out to celebrate something and to maybe make it more special by dressing up after, say, wearing sweatpants for the better part of almost two years.

In terms of the use of technology to help discern and cater to changing tastes, it seems that science is playing a bigger role in the industry than ever before.

Anita Balchandani: We certainly think the importance of science is growing, and that we can find a happy medium where the science enables the art, because it's actually helping point the art in a more targeted way. At the end of the day, though, this is also about creative imagination, and really bringing things that surprise consumers, and I don't think technology or science will take that away.

Still, the role that tech and science can play in really solving some of the pain points and the bottlenecks in the industry is critical. You could say the airbrushed view of the fashion industry is that everything is beautiful and looks perfect. But in reality, getting that perfect-looking item or product on the shelves requires a lot of back-of-house tasks, many of which have been manual, wasteful, and the opposite of streamlined. So the role that technology could play to make that much more sustainable, much more streamlined, much less wasteful, and much more effective, is huge.

Daniel Eisenberg: And by that logic, technology could potentially free up even more time for designers' creative spirits to flourish.

Anita Balchandani: Exactly. As a designer, you could spend even more time doing what you love, which is designing, versus a lot of the other more administrative tasks that are essential to making sure that you've got a sample at the other end that is ready to approve. So I think this is very much about liberating those who work in the fashion industry to actually spend more time on the creative side, the customer value-add.

Daniel Eisenberg: Let's shift gears a little bit and talk about the fashion-tech start-up landscape. Earlier you spoke of the amount of investment going into fashion and fashion-tech right now. What is your outlook going forward? And how much has COVID impacted the view of investing in the space?

Anita Balchandani: You could argue that a lot of the innovation that's coming onstream is still small in scale and quite niche, but we do believe there is huge growth and runway on a number of fronts. That includes technologies that make shopping more frictionless, but also more fun, because we're certainly seeing consumers have appetite in fashion not just for shopping experiences that are highly convenient, but also for something that is much more engaging: livestream shopping, conversational commerce, everything that we're seeing at the interface of the fashion industry and gaming and NFTs.

A large amount of this kind of innovation is still, arguably, early-stage, but there are certainly a slew of new tools to make the entire process of how people transact and interact with brands online much smoother to operate-predictive sizing and AI-driven customer service are just two examples that come to mind. Then you have a whole other swath of innovation around completely new business models: resale, rental, personalized subscription boxes. And finally, all of the innovation having to do with sustainable materials, sustainable clothing, and so on, which is also in the early stages.

Daniel Eisenberg: It sounds like the last two years, as challenging as they have been for the industry as a whole, have not dimmed interest in investing in the fashion-tech space?

Anita Balchandani: Not at all. I think, if anything, people are now increasingly seeing technology and data as one of the things that could be a source of competitive advantage, particularly if you look at some of the moves that the biggest winners in the industry are making with their own heavy emphasis and focus on direct-to-consumer, machine learning, and AI.

Daniel Eisenberg: Is there still momentum behind digitally-native, small fashion and beauty brands? And how has that been impacted by the last 21 months, if at all?

Anita Balchandani: What we're seeing is continued consumer interest in, and investor interest, in this space. If I look at beauty as an analog, there has been a lot of innovation that's been in the pipeline that's started to come out during the pandemic. Even prior to the pandemic, however, the data showed that only five percent of these innovations or digital brands then go on to scale and succeed. So a key skill will be in spotting which of these disruptors will indeed become billion-dollar-plus brands.

Increasingly, what we are seeing is that these new brands' playbook of scaling is clearly rooted in digital and tech, around community-building with social media and social commerce; around direct-to-consumer engagement; and around personalization. But, at the same time, in order to become a billion-dollar-plus brand, many of these brands are having to adopt a wholesale, or wholesale-like, models, that include physical distribution. I think the playbook to scale is evolving from being purely digital towards one that is increasingly more omnichannel.

Daniel Eisenberg: Would you say distribution is the biggest obstacle to succeeding at that scaling stage?

Anita Balchandani: I'd say distribution is one of the challenges, for sure, more so in fashion than in beauty, because of the way the contract manufacturing base is set up. But in fashion the supply chain, how it's set up and friction points in it, is also a major issue, particularly if you're a brand that's looking to do something that is more sustainable and technologically ahead of the curve. When it comes to some of the investments in underlying technologies and supply chain or back-end infrastructure that can help scale these more innovative models, there is still a tech deficit in the industry.

Daniel Eisenberg: Sustainability is obviously an important trend, and it was highlighted quite a bit in the " State of Fashion" report. You've also done reports on the industry and climate change. Walk us through the kinds of business models that are emerging to create value from a "conscious consumption" in fashion.

Anita Balchandani: There's a lot of exciting innovation in this space, and I'll maybe just call out a few areas that I'm particularly excited about.

One has been the growth and increase in resale and resale models, which are definitely starting to show signs of being scalable and are attracting more interest from luxury brands. I think increasingly the opportunity to extend the life of a garment, or an object, has some very powerful potential, in terms of what it can do to the carbon footprint of consumption, while still satisfying the intrinsic desire that we, as consumers, have for newness and self-expression.

The next interesting space is the growth and rise of models and brands that use deadstock or recycled fabric to produce garments, something that is capturing a lot of consumers' attention. Not only are these models producing fashion with a lower carbon footprint, but they are doing so with materials that are not accessible and available all the time, especially in mass quantities, which makes the final product feel that much more special and unique.

Finally, you have the whole space of new materials, biomaterials, eco-fabrics: This is a sector that is growing extremely fast. We expect, for example, the US eco-fiber production market to be around $15 billion by 2025. I think it would be fair to say that these are not yet at full commercial scale. But investment in some of these sectors-be they biomaterials, be they HEMP, what we see players like Bolt Threads or Renewcell doing-is very interesting and worth watching.

Daniel Eisenberg: How long do you think it will take for these alternative materials to become a core part of the industry's output?

Anita Balchandani: Look, it's definitely a longer-term play. As a share of actual garments or of products that are drawing on some of these biomaterials or recycled materials, the number is still very low. Having said that, you have a number of key players in the industry that now are partnering with many of these companies, looking to bring these sorts of products to life. Given that kind of collaboration, we are starting to see early markers of this being able to scale and succeed over the next five to ten years.

Daniel Eisenberg: Going hand-in-hand with sustainability are issues like social justice, working conditions, and the supply chain: How much are those issues driving the conversation in the industry and forcing it to think about new approaches to doing business?

Anita Balchandani: Throughout the pandemic, as lots of producing countries like India and Bangladesh were severely affected with lockdowns, the livelihoods of millions of human beings were negatively impacted. I think these disruptions really shed light on the importance of the sustainability debate to be not just about the planet but to really expand into worker rights and social justice. In fact, during the pandemic many brands have been either lauded or vilified for how they have treated partners and supplier workforces.

As a result, increasingly when the industry scores itself on sustainability, social justice and worker rights are critical factors in that assessment. And I think more players are absolutely clear that, even if they're working with suppliers on an arms-length basis, or with a second tier of suppliers over which they have no direct control, it is no longer acceptable to have worker rights violated and infringed upon. Fashion brands are becoming acutely conscious of making sure that that record is set straight.

In addition to the increased importance of social justice, the industry's focus on sustainability has moved beyond just focusing on being net zero in terms of emissions to being nature-positive. This means asking the question, "What are we giving back to the environment as well?"

Daniel Eisenberg: Going back to investment themes, social commerce platforms and marketplaces have obviously grown meaningfully over the past few years. Is that still a major area for investment focus in fashion start-ups?

Anita Balchandani: Online marketplaces have absolutely been the powerhouses driving the huge growth and share in online shopping over the pandemic. They arguably took more than their fair share of the growth in consumer traffic and spend, and they continue to be on a scale trajectory and a major focus of investment. If anything, we may start to see some consolidation focused on the winning models start to play out in that space.

As for social commerce, China has always been at the forefront of that trend; it now accounts for 13 percent of total e-commerce in China, compared to four percent in the US. Certainly in the fashion and beauty industry, as we look ahead for the next three years, that is the source of growth, even in the Western world beyond China, that we are most excited about.

Daniel Eisenberg: I know we're getting short on time, so I just want to ask one more question. We usually end our podcast by talking about a longer-term horizon. By the end of this decade, how much do you think technology will have transformed the business of fashion? And what do you think will stand out as the biggest tech-driven transformations?

Anita Balchandani: There are three main areas of innovation and transformation that I believe hold huge promise. And in a sense, they are equally aspirations and areas where we're seeing the biggest investment and focus.

Number one would be the role that technology can play in minimizing overproduction, waste, and actually better matching consumer demand and supply. I think there's a huge potential to pioneer a fashion model that is just much less wasteful, but also much more responsive to what the customer wants and demands.

The second area I would think about is a world in which the fashion industry is really able to reshape its economics, particularly its online economics, through addressing returns the last mile, the flow of goods, and a lot of the waste that exists in the end-to-end value chain. I think that's there's great potential there to streamline the value chain to be much more efficient and effective.

And then, finally, I think would be just the promise around new circular business models, new technology, and fabric innovation, things that can enable the fashion industry to make the resources that go into its production and consumption part of a fundamentally better equation.

Daniel Eisenberg: That gives us a lot to think about. Fashion is obviously such a key part of all of our lives, and the intersection of technology with fashion will continue to capture our attention.

Anita Balchandani: I like the challenge of the ten-year view, because I do believe it's time for the industry to look at where it would like to be in ten years, and then work back from there. To take full advantage of these technologies, the industry will need that kind of lens, one that poses the question, "How do you completely reimagine what you do, versus tweaking and refining the system that we have?"

Daniel Eisenberg: Well, watching the industry, especially in the resale category, it has been encouraging to see how they're starting to embrace that kind of disruptive innovation. Whereas a few years ago many players seemed wary of these new models, more are now really starting to take part in them. They're striking partnerships with online resale marketplaces and getting their customers involved, while making sure that the brand still remains a key part of the equation. So it seems like that's a positive indicator of an industry becoming more open to change.

Anita Balchandani: I'd absolutely echo that view.

Daniel Eisenberg: Anita, I want to thank you so much for taking the time to speak with us today. It's been a great conversation.

Anita Balchandani: And a great opportunity for the fashion industry to not waste a good crisis here, and take the opportunity to really reimagine itself.

Daniel Eisenberg: Indeed. Well that's our podcast. Thanks again to our guest, Anita Balchandani, a London-based McKinsey partner who leads the Apparel, Fashion & Luxury practice in the UK, Europe, the Middle East, and Africa.

As always, I want to thank our great McKinsey on Start-ups production team-Molly Karlan, Polly Noah, Sid Ramtri, Myron Shurgan, and Katie Znameroski.

And of course, thank you for listening. We hope you'll return for future episodes of McKinsey on Start-ups.

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What tech innovation means for the business of fashion

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In this episode of the McKinsey on Start-ups podcast, McKinsey executive editor Daniel Eisenberg speaks with Anita Balchandani, a London-based McKinsey partner who leads the firm's Apparel, Fashion & Luxury practice in the UK, Europe, the Middle East, and Africa. An edited transcript of their conversation follows.

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structure / discuss:

sociological background to retrofuturism trend in fashion and advancements + highlight cultural shift and fashion's role as a reflection of society - could do a timeline of tech-influenced design from 1960s-2020s?

the emergence of VR technology - which industry did it come from? - timeline key dates (split into history and contemporary)

how or why did it end up in fashion? (cite CXP benefits, community building, content creation around the idea of democratising typically exclusive Fashion Weeks)

who are the early / first adopters of VR in fashion? accessible through VR headsets? (Topshop, Tommy Hilfiger, Coach, Dior - 360 runway shows)

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discuss:

which industry did GEN AI come from? - trace the evolution of GEN AI from original industry into fashion (create timeline)

what are the use cases for fashion's adoption of GEN AI? (see trends and industry reports on AI - BoF / McKinsey)

who are the first / early adopters of GEN AI in fashion and what was the technology used for? (BoF Playbook)

structure:

Gen AI Definition & Historical Timeline

Gen AI Industry Adoption - Focus On Specific Uses As a Tool for LUXURY Fashion:

Overview (Gen AI Augmentation vs. Automation Critical for Luxury Sector - Use Examples to Explain Why:

To Aid Design (Collina Strada)

To Aid Marketing (Casablanca)

To Aid Customer Service (KNXT & Kering)

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State of Fashion Technology Report 2022 by McKinsey

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State of Fashion Technology Report 2022 by McKinsey

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In 2021, fashion companies invested between 1.6 and 1.8 percent of their revenues in technology. By 2030, that figure is expected to rise to between 3.0 and 3.5 percent. Behind the predicted increase is a conviction among many that technology could create a competitive edge-in customer-facing activities, where companies have mostly focused to date, and, more increasingly, in operations. Technologies such as robotics, advanced analytics, and in-store applications may help streamline processes and support sustainability, as well as create an exceptional customer experience (exhibit).

Consumer digital engagement rose sharply during the COVID-19 pandemic, as a result of more hours spent online, new shopping habits, and rising interest in gaming and virtual worlds. In 2021, people spent on average just below four hours on their mobile phones, which includes about two and a half hours of scrolling though social media. Of the fashion customers who made the move to online-shopping channels in 2021, 48 percent said the pandemic was the reason, 27 percent cited convenience, and 11 percent cited product availability and promotions. The pandemic also boosted digital brand relationships, with 72 percent of customers reporting they interacted with brands online in 2021. In the year ahead, as restrictions ease in some geographic areas, digital interactions will likely stabilize at about 66 percent on average.

Looking ahead, the impact of technology on people's lives may accelerate. By 2024, AI-generated speech could power more than half of human interactions with computers, McKinsey analysis shows. Soon after, more than 75 percent of enterprise-generated data could be processed by cloud or edge computing. This offers a more flexible, scaleable foundation on which brands can potentially build their tech offerings. By 2030, more than 80 percent of the global population is expected to have access to 5G networks, enabling, among other things, faster connectivity and data transfer across Internet of Things devices.

The operational potential of technology is becoming ever more apparent. McKinsey analysis shows that fashion companies that now embed AI into their businesses models could see a 118 percent cumulative increase in cash flow by 2030. Conversely, those that are slower to invest in digital technology will lag behind-and could see a 23 percent relative decline. Over the next three years, potential key areas in which fashion executives could make digital investments are personalization, store technologies, and end-to-end value chain management-areas in which digital can make a real difference to performance.

Fashion's five key technology themes

As fashion industry executives consider how to maximize their technology resources, McKinsey and the Business of Fashion have identified five key themes that could help the industry address some pressing challenges, as well as unlock potential opportunities: metaverse reality check, hyperpersonalization, connected stores, end-to-end upgrade, and traceability first.

Metaverse reality check. The marketing value of digital fashion and nonfungible tokens (NFTs) may now be clear, but fashion brands will need to separate the concrete opportunities from the hype to generate sustainable revenue streams presented by growing consumer engagement with the metaverse.

Hyperpersonalization. Brands have access to a growing arsenal of personalization tools and technologies to upgrade how they customize and personalize their customer relationships. The opportunity for executives now is to harness big data and artificial intelligence to provide one-to-one experiences that build long-term loyalty.

Connected stores. The inexorable rise of e-commerce has forced fashion players to rethink the role of physical stores. Fashion executives can address consumer pain points by using in-store mobile apps to enhance the in-store experience and microfulfillment technologies to leverage the store for the quick-commerce era.

End-to-end upgrade. Digital tools and analytics have transformed key parts of the fashion value chain, but these optimizations are often siloed within organizations, limiting the potential of cross-functional improvements. Brands should embark on end-to-end value chain integration to create more efficient and more profitable ways of operating.

Traceability first. Traceability systems powered by traceability software and big data will help fashion brands reach far into their supply chains to understand the entire life cycle of their products, a key enabler for sustainability road maps.

Of all the technology-based evolutions affecting the fashion industry, one of particular interest is virtual worlds, also known as the metaverse. Global spending on virtual goods reached more than $100 billion in 2021, more than doubling the total in 2015, with around 30 percent of revenues attributed to virtual fashion assets. Amid demand for products such as virtual fashion and NFTs, fashion companies focused on metaverse innovation and commercialization could generate more than 5 percent of revenues from virtual activities over the next two to five years. The task for decision makers, however, will be to focus on specific opportunities.

For many fashion brands, highly personalized customer experiences are a cornerstone of their digital businesses. Their customers expect nothing less. Advancements in AI, analytics, and cloud computing mean that businesses have the tools to work with all types of data across channels in real time. This could support a move to hyperpersonalization, in which technology could help search-based e-commerce transform into individualized discovery of products and styles. This may enable customers to routinely access curated websites and marketplaces, from landing pages to payments. To make that vision a reality, decision makers may need to optimize their data and analytics capabilities and roll them out at scale. While this may create some important considerations (for example, to ensure that customer data is protected and that data collection follows best practices), the upside could be the ability to acquire and retain loyal customers.

In parallel to personalization, the coming year will likely see many brands investing in in-store functionality and experiences, bridging the gap between online and offline channels-and moving away from stand-alone technologies such as magic mirrors, connected hangers, and interactive holograms. In-store mobile "clienteling" apps could offer a frictionless way for store associates to serve customers, while in-store mobile apps can help boost engagement, reduce customer pain points, and increase time spent browsing. Beyond the shop floor, robotics and stock optimization software can help brands and retailers set up microfulfillment centers, integrating physical stores as digital nodes in their distribution and delivery networks and cutting fulfillment costs by up to 90 percent.

From demand forecasting to transport operations, a critical element in expanding the role of technology could be to apply digital tools to make end-to-end improvements in the value chain. To operate more efficiently, brands could consider breaking down the silos that have defined many digitization programs and integrating multiple back-end systems, workflows, and data functions. More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be among their top five areas for digitization as they look to 2025. By adopting digitally enabled value chain solutions, brands could see a 50 percent reduction in time to market, an 8 percent rise in full-price sell-through, and a 20 percent decline in manufacturing costs, our analysis shows.

More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be among their top five areas for digitization as they look to 2025.

More than 50 percent of fashion decision makers say traceability will be a top-five enabler of reducing emissions in their supply chains, but many brands currently have visibility over only direct supplier relationships. We see brands increasing their focus on traceability through their supply chains, helping them address demands from regulators, investors, and customers for greater transparency. As they aim to cut emissions and meet their environmental, social, and governance (ESG) targets, brands could benefit from a common data language to enable comparability, as well as new labeling standards and tracking software. Brands could consider joining forces with peers, start-ups, and industry bodies to establish a common data standard and to share data and knowledge via software platforms, open ledgers, and big data technologies.

One of the few certainties in fashion is that nothing stays the same, and the opportunities offered by technology are continuing to evolve as some markets look to move beyond the challenges posed by the COVID-19 pandemic. The task for fashion decision makers is to consider how to harness technology to creativity, streamline operations, and create value from innovation that can be sustained in the years ahead.

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As technological innovation accelerates, fashion companies have an opportunity to serve customers better whilst also creating a more efficient, more responsive, and more responsible business.

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McKinsey on European Consumer Sentiment (2023)

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McKinsey on European Consumer Sentiment (2023)

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To save or to splurge? That is the question confronting European consumers, who have the most optimistic economic outlook they have had in at least a year, in the face of continuing price increases. For some, the answer is "both." The following five charts highlight findings from our latest ConsumerWise research survey, conducted in May 2023 in five European countries: France, Germany, Italy, Spain, and the United Kingdom.

The snapshot of the European consumer today reflects the tension between intending to spend and save under the pressure of higher prices, albeit with more nuance than one might find in a typical economics textbook. These sentiment data indicate that value may become a more important driver of purchases-but certainly not the only one.

Check out our ConsumerWise page and contact us for more information and additional insights.

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High hopes despite high prices: An update on European consumer sentiment

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Consumer confidence has grown dramatically across the continent-but geopolitical concerns and price increases continue to affect how consumers intend to spend. ConsumerWise offers its latest research.

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Saudi Arabia GCC Personal Luxury In 2021 (2023)

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Saudi Arabia GCC Personal Luxury In 2021 (2023)

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Chalhoub Group released its comprehensive report
"GCC Personal Luxury in 2021: A Story of Early Recovery and Growth" with a deep dive on Saudi Arabia, in collaboration with the Fashion Commission of Saudi Arabia's Ministry of Culture. The report was launched at Riyadh's Retail Leaders Circle summit on March 22nd.

Chalhoub Group and the Fashion Commission are bringing together industry propriety insights and data to support regional and international brands and businesses. The report offers deep insights into consumption patterns and factors that will drive the growth of the GCC market. With this report, Chalhoub Group reinforces its leading position as a thought leader, innovator, and knowledge partner keen to offer unique insights about the regional luxury market that's set to grow.

According to the report, insights indicate that in 2021 the GCC luxury market outpaced pre-pandemic level by 23% versus 2019. By 2023 the GCC luxury market is projected to reach $11 billion growing from the current $9.7 billion.

As such, the GCC luxury market is under a massive transformation as brands are in a constant state of evolution to cater for young, informed and hybrid consumers. A few of the many drivers of growth include:

·

Spend repatriation where 60% of the spending now happens in-country

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Brand investments in marketing and localized events

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E-commerce market more than doubling, led by pure players

Deep diving on Saudi Arabia, the largest country in the GCC, the Kingdom has shown remarkable growth in personal luxury, reaching $2.2 billion and growing at +19%, driven by spend repatriation, female empowerment, boiling retail landscape, events and activities, and e-commerce boom.

Patrick Chalhoub, Group President, Chalhoub Group, said: "With over 65 years of presence in the GCC, the Group has always been invested in understanding the unique market dynamics of the region, its savvy consumers and valued partners. We are proud to collaborate with the Fashion Commission, which shares our ambition and plays a pivotal role in the region's fashion industry. Our report on the GCC personal luxury market reinforces our commitment to sharing knowledge and supporting local and international brands to connect with the region, celebrate our culture and heritage."

Commenting on the collaboration with Chalhoub Group, Burak Cakmak, Chief Executive, Fashion Commission, stated: "Our mission is to develop a thriving fashion ecosystem in KSA to uphold Saudi heritage, promote local talent, designers and brands, and also attract international brands to the Kingdom. In doing so, strategic collaborations with authoritative private sector entities will play a pivotal role in supporting us with intelligence and insights on the fashion industry. Such collaborations will ultimately benefit the regional fashion industry, nurture local talents and support the growth of retail."

Looking ahead, the GCC luxury market is projected to reach $11 billion in 2023, fueled by several factors such as local spending by GCC nationals and development of new categories. Chalhoub Group will be at the forefront of the future growth of luxury in the GCC by continuing to contribute to and support brands, partners, and the regional luxury fashion market.

Click here for summary and full report

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Chalhoub Group - Blogs - CHALHOUB GROUP RELEASES "GCC PERSONAL LUXURY IN 2021: A STORY OF EARLY RECOVERY AND GROWTH" REPORT IN COLLABORATION WITH THE FASHION COMMISSION OF SAUDI ARABIA'S MINISTRY OF CULTURE

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Chalhoub Group is the leading partner for luxury across the Middle East since 1955

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some basic facts and application suggestions for blockchain across a variety of industries

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Blockchain technology is a new approach to recording, sharing and verifying information among members of a community. Instead of relying on a central party, community members can directly run networks and host data that represents anything from payments to carbon credits.

The technology is near impossible to cheat, ushering in exciting opportunities to build trust.

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Many of the technologies we now take for granted were quiet revolutions in their time. Just think about how much smartphones have changed the way we live and work. It used to be that when people were out of the office, they were gone, because a telephone was tied to a place, not to a person. Now we have global nomads building new businesses straight from their phones. And to think: Smartphones have been around for merely a decade.

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One of the most promising applications of emerging blockchain technology is supply chain management. Blockchain-the digital record-keeping system developed for cryptocurrency networks-can help supply chain partners with some of their challenges by creating a complete, transparent, tamperproof history of the information flows, inventory flows, and financial flows in transactions.

The authors studied seven large U.S. corporations that are exploring how blockchain might improve their supply chain operations. Their early initiatives show that the technology can enable faster and more cost-efficient product delivery, make products more traceable, streamline the financing process, and enhance coordination among buyers, suppliers, and banks.

There are special requirements for using blockchain in supply chain management: restricting participation to known, trusted partners; adopting a new consensus protocol; and taking steps to keep errors and counterfeits out of the supply chain. But if implemented thoughtfully, the authors suggest, blockchain could pay big dividends for companies in a host of industries.

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One of the most promising applications of emerging blockchain technology is supply chain management. Blockchain-the digital record-keeping system developed for cryptocurrency networks-can help supply chain partners with some of their challenges by creating a complete, transparent, tamperproof history of the information flows, inventory flows, and financial flows in transactions.

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include graphic of supply chain transparency industry score!

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TAKE ACTION

Anyone, anywhere should be able to find out how, where, by whom and at what social and environmental costs their clothes are made. This requires greater transparency across fashion's global value chain.

So, our call to you is this - do not use this Index to inform your shopping choices but rather use these findings to inform your activism.

We urge readers to use these findings to speak up and challenge the big profitable brands and retailers on their claims, urging them to be more accountable and prove that they're making changes in reality and not just on paper.

For citizens, this means calling on:

European policymakers to legislate on living wages. Through the Good Clothes, Fair Pay campaign, we collected hundreds of thousands of signatures calling on the European Parliament to introduce living wage legislation for garment workers worldwide - stay tuned for future campaign updates!

Major brands and retailers to be more transparent on all the issues included in the Fashion Transparency Index - get in touch with brands and ask them #WhoMadeMyClothes?, #WhoMadeMyFabric? and #WhatsInMyClothes?

Policymakers, using our postcard template, to create legislation that holds big brands accountable for human rights and environmental impacts across the entire value chain.

Shareholders and investors to use their power to influence big brands to be more transparent and do better for the planet and the people who make our clothes, including making investment decisions on the basis of how transparent companies are or are not.

Civil society, such as trade unions and NGOs, to ensure that brands' policies and practices translate into positive outcomes in the places where clothes are made.

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FASHION TRANSPARENCY INDEX 2023 : Fashion Revolution

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We love fashion, but we don't want our clothes to come at the cost of people or our planet.

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How Blockchain Could Unlock Transparency In Fashion Supply Chains

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How Blockchain Could Unlock Transparency In Fashion Supply Chains

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Fashion supply chains are notoriously complex. This is due to their composition of multi-layered processes which include - but aren't limited to - sourcing of raw materials, transportation to factories where materials are assembled into garments or accessories, and distribution for delivery to consumers. Complicating matters further, it is common for raw materials to be grown, processed and sold in different locations. The past two decades have seen an acceleration in the demand for high speed, high volume and cheap consumption - intensifying the burdens on the supply chain more than ever. Recently, pressure has been mounting from consumers when it comes to scrutinising the sustainability and ethics of brands' practices. Without true transparency, supply chains have the potential to include exploitative and unsafe working conditions and cause significant environmental damage.

Transparency, in this context, can be defined as companies sharing details of each component of their supply chains when it comes to how they treat workers and their overall environmental impact. And the bigger the brand, the bigger the possible scale of damage. Thus, major brands have a special responsibility towards supply chain transparency. The question that arises is: how exactly can this be achieved?

One modern solution has been to use blockchain technology. Along with building consumer trust and confidence, a blockchain may also be used in the fight against counterfeiting - an unrelenting concern for luxury brands - as blockchain records are difficult to alter. However, it may all sound too good to be true. To what extent can we expect a widespread uptake of the blockchain movement by the fashion industry?

Understanding blockchain's main selling point: 'immutability'

At this point, it is worth revisiting how blockchain works to appreciate why this technology can make claims of immutability. At the heart of most blockchains is cryptography and a prime example is the SHA-256 encryption algorithm. SHA-256, published by the United States National Security Agency in 2001, beats inside the chest of Bitcoin and many other blockchain applications. The algorithm takes any length of text or numbers as an input and outputs a series of 64 characters. If any part of the input is changed, the output will be entirely different. These 64-character series are known as 'hashes' and each block has one for itself and one for the block that came before it. The hash has an additional benefit, being a condensed form of information. Dr Karin Lorez, blockchain lecturer at the University of Zurich and senior legal advisor, points out "one does not have to store all the data on the blockchain itself - only the hash."

A blockchain-enabled supply chain can be visualised as having one block containing information regarding materials, one block for manufacturing, one block for transport and one for distribution. These are added through time, and each time a block is added it locks in the previous information by hashing it. It takes an instant to calculate the SHA-256 encryption. However, if one imposes certain restrictions on this seemingly random sequence of characters (such as that the first few characters must be zeros) and then generates the hash each time changing the input slightly, it can take a long time to compute. Combining this selective hashing with storing the data in several, decentralised locations can make it impractical to alter details of past blocks. Lorez also mentions that the decentralisation of storage, while contributing to immutability, has drawbacks. "It becomes a question of who is responsible for storage, where is the data stored, and what happens if the storage provider ceases to exist."

Current levels of transparency in the fashion supply chain

The demand for greater transparency in fashion supply chains has been growing for years, fuelled by public outcry due to several major disasters. Between 2011 and 2013, the industry saw events such as factory fires in Pakistan's Ali Enterprises and Bangladesh's Tazreen Fashions, as well as the Rana Plaza building collapse. The last of these resulted in over 1,100 factory employees killed and thousands more injured. Until then, almost no public information was available regarding the companies that were utilising the factories involved. Some brands themselves had no idea that their own labels were found among the wreckage, due to their limited oversight of their suppliers and who these suppliers were subcontracting.

Since these events, the incentives around transparency are gradually inverting. Where before, brands kept details around their supply chains confidential, either for protecting trade secrets or not wanting to expose their business practices. Today, however, disclosing one's sustainability and ethics can place a brand ahead of its competitors. 43% of Gen-Z say they intentionally buy from companies that have a robust sustainability reputation, according to the 2022 State of Fashion report by McKinsey & Company and the Business of Fashion. Disclosing supply chain information also builds the trust of employees, labour and environmental advocates, and investors.

A leading measure for transparency in the global supply chain is the Transparency Index, created in 2016 by non-profit organisation Fashion Revolution. The 2021 Transparency Index found that there was a lack of public disclosure across all major brands with regards to reporting on items such as living wages for supply chain workers, purchasing practices, waste volumes, and carbon emissions in the supply chain. Among the lowest scorers were Max Mara and Tory Burch. Encouragingly, global brand H&M scored in the top 10, showcasing that scale does not preclude transparency.

The 2021 Transparency index, fashion revolution.

Adopters of blockchain for supply chain transparency and traceability

As mentioned, two of the goals of using blockchain in the supply chain are as follows: first, to provide transparency by enabling consumers to inspect the sustainability and ethical claims of a product, and secondly, to provide traceability by enabling the verification of a product's authenticity and ownership.

One of the first instances of using blockchain for transparency in fashion supply chains was in 2017, where designer Martine Jarlgaard partnered with blockchain technology company Provenance for a pilot programme that tracked raw materials through the supply chain to the completed garment. Each item of clothing was allocated a unique digital token, allowing for the verification of every step of its production. Customers can access the information on the Provenance application, after scanning the item's QR code or Near Field Communication (NFC)-enabled label. Another designer, Sarah Regensburger, uses blockchain platform VeChain for her sustainable fashion label. Her motivation for doing so was to ensure her customers could access information about how to care for the clothing, sizing, certificates, information about the design and construction process, and where the organic materials were sourced. VeChain also supports Arket, a subsidiary of H&M, to verify the organic manufacturing process of their wool beanies.

Martine Jarlgaard x Provenance

VeChain also has consumer-facing projects which help to provide traceability, notably working with Givenchy to supply NFC chips for its leather products and sneakers to verify authenticity. Other high-end products to use consumer-facing blockchain technology include watchmakers Vacheron Constantin, Breitling and Audemars Piguet. The brands began working with Arianee, a Paris-based company that describes its offerings as "end-to-end web3 solutions for brands." Using Arianee's blockchain solution, each Breitling watch produced after the 13 th of October 2020 includes a digital passport that allows owners to assert the authenticity of their products and the validity of their ownership.

Arianee.

A major recent breakthrough in the traceability space occurred with the creation of the Aura Blockchain Consortium - whose members include LVMH, the Prada Group and Richemont (owner of Cartier). The Consortium operates as a non-profit, luxury-specific blockchain technology platform with the goal of developing passports to ensure authenticity and traceability of the brand's products. The passports offer lifecycle tracking, proof of origin, and protection of intellectual property after being given a unique digital identity based on a non-fungible token (NFT).

This is a major step in the direction of promoting circular fashion. "The future of supply chain traceability is not cradle-to-grave, but rather cradle-to-cradle," says Luca Barneschi, a fashion consultant with over 35 years of experience specialising in the supply chain for ready-to-wear and luxury goods. "The younger generation has changed the way in which we consume. There is an emphasis on borrowing, reusing and upcycling quality products, rather than just buying and owning them for a short period of time." Barneschi believes that herein lies the next significant challenge, but also the next opportunity. "The opportunity is for brands to not only sell products, but to sell a service in line with the notion of use, reuse, repair, recycle and return. Being able to trace the product journey with the consumer from beginning to end will be imperative." Given the recent enthusiasm for blockchain, Barneschi does see its value but recognises that, in the end, it is more important that it happens rather than how it happens. "There are more initiatives and technologies than ever to support this new system. Blockchain is just one possible option."

Outlook for blockchain - is it the best solution?

Current traceability frameworks are, to an extent, still paper-based and often utilise assorted, unconnected systems to manage the supply chain. Thus, the uptake of blockchain in this area is a welcome development, especially by groups such as the Aura Blockchain Consortium and sustainable fashion innovation platform, Fashion for Good. James Crowley of Fashion for Good suggests that while cloud-based solutions and the internet of things (IoT) may be adequate for gathering and storing data regarding the supply chain, forward-looking blockchain technology has the potential to be particularly useful for traceability. "There is a place for fibre-forwards blockchain solutions where a digital twin is created of the particular fibres, yarn, fabric roll and final product and are tracked in parallel as they move through the supply chain," Crowley says.

Fashion for good museum.

The pioneering Organic Cotton Traceability Pilot run by Fashion for Good, the Laudes Foundation and the Organic Cotton Accelerator (OCA) did exactly this. Supported by C&A, Kering, PVH Corp. and Zalando, the project focuses on tracing organic cotton from farm to retail, both digitally and physically, combining blockchain with on-product markers. Crowley adds: "It is becoming essential to have real-time visibility of supply chain journeys to understand the environmental impact of a product, as it happens."

Amid the beneficial advancements of blockchain, attention must still be paid by the conscious consumer. This is even after a brand mentions that it is using blockchain technology. It is true that blockchain does not allow for individual blocks to be altered, without invalidating the chain of hashes. However, changing the hashes of all subsequent blocks after an altered block is a way of circumventing this issue. Hence, the true envoys of transparency will most likely be decentralised, public blockchains (as opposed to private ones) as it is impractical to rewrite the blockchain if copies of it exist in different locations, on computers owned by different parties. Arianee does just this: operating a decentralised blockchain and using open-source protocols. This means that the code is published, and anyone can contribute and build on it. Customers are also able to see every event in a product's lifecycle and these events cannot feasibly be altered after the fact.

To keep in mind: the unalterable nature of data on the blockchain means there is an incentive for the information to be accurate and complete, but not a guarantee. If a brand enters data on the blockchain and this is later exposed to be false or even accidentally incorrect, the brand can be held accountable. How the appropriate data from each stage of the supply chain is collected and placed on the blockchain is a separate issue.

Ultimately, the consumer holds the most power. By demanding communication and transparency in the supply chain from all brands, the cultural shift towards sustainability and socially sound practices will continue to propel forward, making it the only viable game in town.

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Blockchain: Unlocking Transparency And Traceability In The Fashion Supply Chain

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Fashion supply chains are notoriously complex. This is due to their composition of multi-layered processes which include - but aren't limited to - sourcing of raw materials, transportation to factories where materials are assembled into garments or accessories, and distribution for delivery to consumers.

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Can blockchain revolutionise supply chain transparency within the fashion industry?

The FIA collaborated with Martine Jarlgaard, Provenance and A Transparent Company to demonstrate how blockchain technology could change the future of fashion. This project highlights the role of blockchain technology and how it could increase transparency in the fashion industry, by tracking the journey of raw material through the supply chain through to the finished garment.

Registering and tracking items on blockchain via the Provenance app, this project followed the production of garments made from sustainable alpaca fleece, from shearing to spinning, to knitting and finally to Martine Jarlgaard's studio in London.

Users were able to scan the NFC-powered label on the garment to see its journey through the supply chain. Martine showcased her blockchain-tracked garment at the Copenhagen Fashion Summit in 2017 as the world's first garment using technology to track product provenance from raw material to finished product. With the ever increasing demand from consumers for transparency, this is an important development for the fashion industry.

"Until now, centralised data systems were the only way to power traceability for materials, to ensure trustworthy data. Blockchain disrupts this by changing how we track the journey of things, and powering a system that everyone in the supply chain can be part of."

Jessi Baker, CEO and Founder of Provenance:

"Vision, ethics, accountability and education - these are the most important ingredients for change, laying the foundations of a sustainable future for the fashion industry. Blockchain technology and the Provenance platform is a step in the right direction, and will help make sense of the massively complex and often secretive processes which make up the supply chain. Full transparency and traceability becomes a stamp of approval allowing consumers to make informed choices with no extra effort."

Founder of Martine Jarlgaard London

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Blockchain for Transparency | Fashion Innovation Agency

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The FIA collaborated with Martine Jarlgaard, Provenance and A Transparent Company to demonstrate how blockchain technology could change the future of fashion. This project highlights the role of blockchain technology and how it could increase transparency in the fashion industry, by tracking the journey of raw material through the supply chain through to the finished garment.

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structure ideas / discuss:

A. overview of blockchain applications to target specific goals + consumer shift towards conscious consumption.

B. examples of blockchain adoption by companies to address these specific goals

business use cases (key areas plus examples of blockchain against counterfeits, blockchain for traceability, blockchain as marketing tool)?

1x industry adoption example (see Case Study section)

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read Theme 05 of the downloaded report for Blockchain & Consumer Sentiments on Traceability / Accountability

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In 2021, fashion companies invested between 1.6 and 1.8 percent of their revenues in technology. By 2030, that figure is expected to rise to between 3.0 and 3.5 percent. Behind the predicted increase is a conviction among many that technology could create a competitive edge-in customer-facing activities, where companies have mostly focused to date, and, more increasingly, in operations. Technologies such as robotics, advanced analytics, and in-store applications may help streamline processes and support sustainability, as well as create an exceptional customer experience (exhibit).

Consumer digital engagement rose sharply during the COVID-19 pandemic, as a result of more hours spent online, new shopping habits, and rising interest in gaming and virtual worlds. In 2021, people spent on average just below four hours on their mobile phones, which includes about two and a half hours of scrolling though social media. Of the fashion customers who made the move to online-shopping channels in 2021, 48 percent said the pandemic was the reason, 27 percent cited convenience, and 11 percent cited product availability and promotions. The pandemic also boosted digital brand relationships, with 72 percent of customers reporting they interacted with brands online in 2021. In the year ahead, as restrictions ease in some geographic areas, digital interactions will likely stabilize at about 66 percent on average.

Looking ahead, the impact of technology on people's lives may accelerate. By 2024, AI-generated speech could power more than half of human interactions with computers, McKinsey analysis shows. Soon after, more than 75 percent of enterprise-generated data could be processed by cloud or edge computing. This offers a more flexible, scaleable foundation on which brands can potentially build their tech offerings. By 2030, more than 80 percent of the global population is expected to have access to 5G networks, enabling, among other things, faster connectivity and data transfer across Internet of Things devices.

The operational potential of technology is becoming ever more apparent. McKinsey analysis shows that fashion companies that now embed AI into their businesses models could see a 118 percent cumulative increase in cash flow by 2030. Conversely, those that are slower to invest in digital technology will lag behind-and could see a 23 percent relative decline. Over the next three years, potential key areas in which fashion executives could make digital investments are personalization, store technologies, and end-to-end value chain management-areas in which digital can make a real difference to performance.

Fashion's five key technology themes

As fashion industry executives consider how to maximize their technology resources, McKinsey and the Business of Fashion have identified five key themes that could help the industry address some pressing challenges, as well as unlock potential opportunities: metaverse reality check, hyperpersonalization, connected stores, end-to-end upgrade, and traceability first.

Metaverse reality check. The marketing value of digital fashion and nonfungible tokens (NFTs) may now be clear, but fashion brands will need to separate the concrete opportunities from the hype to generate sustainable revenue streams presented by growing consumer engagement with the metaverse.

Hyperpersonalization. Brands have access to a growing arsenal of personalization tools and technologies to upgrade how they customize and personalize their customer relationships. The opportunity for executives now is to harness big data and artificial intelligence to provide one-to-one experiences that build long-term loyalty.

Connected stores. The inexorable rise of e-commerce has forced fashion players to rethink the role of physical stores. Fashion executives can address consumer pain points by using in-store mobile apps to enhance the in-store experience and microfulfillment technologies to leverage the store for the quick-commerce era.

End-to-end upgrade. Digital tools and analytics have transformed key parts of the fashion value chain, but these optimizations are often siloed within organizations, limiting the potential of cross-functional improvements. Brands should embark on end-to-end value chain integration to create more efficient and more profitable ways of operating.

Traceability first. Traceability systems powered by traceability software and big data will help fashion brands reach far into their supply chains to understand the entire life cycle of their products, a key enabler for sustainability road maps.

Of all the technology-based evolutions affecting the fashion industry, one of particular interest is virtual worlds, also known as the metaverse. Global spending on virtual goods reached more than $100 billion in 2021, more than doubling the total in 2015, with around 30 percent of revenues attributed to virtual fashion assets. Amid demand for products such as virtual fashion and NFTs, fashion companies focused on metaverse innovation and commercialization could generate more than 5 percent of revenues from virtual activities over the next two to five years. The task for decision makers, however, will be to focus on specific opportunities.

For many fashion brands, highly personalized customer experiences are a cornerstone of their digital businesses. Their customers expect nothing less. Advancements in AI, analytics, and cloud computing mean that businesses have the tools to work with all types of data across channels in real time. This could support a move to hyperpersonalization, in which technology could help search-based e-commerce transform into individualized discovery of products and styles. This may enable customers to routinely access curated websites and marketplaces, from landing pages to payments. To make that vision a reality, decision makers may need to optimize their data and analytics capabilities and roll them out at scale. While this may create some important considerations (for example, to ensure that customer data is protected and that data collection follows best practices), the upside could be the ability to acquire and retain loyal customers.

In parallel to personalization, the coming year will likely see many brands investing in in-store functionality and experiences, bridging the gap between online and offline channels-and moving away from stand-alone technologies such as magic mirrors, connected hangers, and interactive holograms. In-store mobile "clienteling" apps could offer a frictionless way for store associates to serve customers, while in-store mobile apps can help boost engagement, reduce customer pain points, and increase time spent browsing. Beyond the shop floor, robotics and stock optimization software can help brands and retailers set up microfulfillment centers, integrating physical stores as digital nodes in their distribution and delivery networks and cutting fulfillment costs by up to 90 percent.

From demand forecasting to transport operations, a critical element in expanding the role of technology could be to apply digital tools to make end-to-end improvements in the value chain. To operate more efficiently, brands could consider breaking down the silos that have defined many digitization programs and integrating multiple back-end systems, workflows, and data functions. More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be among their top five areas for digitization as they look to 2025. By adopting digitally enabled value chain solutions, brands could see a 50 percent reduction in time to market, an 8 percent rise in full-price sell-through, and a 20 percent decline in manufacturing costs, our analysis shows.

More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be among their top five areas for digitization as they look to 2025.

More than 50 percent of fashion decision makers say traceability will be a top-five enabler of reducing emissions in their supply chains, but many brands currently have visibility over only direct supplier relationships. We see brands increasing their focus on traceability through their supply chains, helping them address demands from regulators, investors, and customers for greater transparency. As they aim to cut emissions and meet their environmental, social, and governance (ESG) targets, brands could benefit from a common data language to enable comparability, as well as new labeling standards and tracking software. Brands could consider joining forces with peers, start-ups, and industry bodies to establish a common data standard and to share data and knowledge via software platforms, open ledgers, and big data technologies.

One of the few certainties in fashion is that nothing stays the same, and the opportunities offered by technology are continuing to evolve as some markets look to move beyond the challenges posed by the COVID-19 pandemic. The task for fashion decision makers is to consider how to harness technology to creativity, streamline operations, and create value from innovation that can be sustained in the years ahead.

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As technological innovation accelerates, fashion companies have an opportunity to serve customers better whilst also creating a more efficient, more responsive, and more responsible business.

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find an updated graphic since 2018 and highlight the challenges of upstream production and sustainability

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the model illustrates how technology could revolutionise the standard supply chain...

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By FTA : A Marangoni Partner

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Some of you may have heard about "blockchain", a technology that was initially used for digital currency, such as bitcoin.

However, are you aware of the definition?

Don & Alex Tapscott in Blockchain Revolution (2016) defined blockchain as " an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. "

Probably now you are wondering: who invented blockchain? Referring to some articles, blockchain was originally invented by Satoshi Nakamoto, which turns out to be a pseudonym of a person or group of people. This invention created the backbone of a new type of internet, which allows you to distribute digital information without fear of getting copied - simply means a more secure transaction.

So, what makes blockchain more secure? The answer is its decentralized database, meaning the data is not just saved in a single location. The records are truly public and easily verifiable, for each user who has access to the system. This decentralized version creates a secure mechanism to prevent a hacker to corrupt the data or the database itself. That mechanism is truly what needed by many industries, such as financial service, healthcare, supply chain management, etc.

Below figure will present you the comparison between traditional and blockchain system.

Then, what is the linkage between Blockchain with Retail & Luxury Industries? So, here are the blockchain functionality (including practical examples), that may be advantageous for your company.

1. Blockchain Against Counterfeiting
"Blockchain can do reconciliation regularly to its decentralized database, for securely store and the verify authenticity of goods."
In luxury goods industry, counterfeiting always become one of the biggest issues. And up to now, most of the companies are still struggling to find the solution. Some technologies attempts that commonly deployed are:

1. serial number

2. watermarks

3. hologram

4. barcode/ QR code

5. uses of special ink/ dyes/ papers/ label/ etc.

However, above attempts are proven not effective in a long run, since the data is being stored in a central database. A hacker may hack and manipulate the data or the database, to create a copy or just to screw up the authentic special code. And to combat this issue, the company easily required to integrate the existing technologies (e.g NFC, RFID, Barcode, etc.) with blockchain platforms, to improve the security level.

And one notable brand that already made the transformation is BabyGhost, collaborated with Vechain, that launch the product and their collaboration at Shanghai Fashion Week 2017. In a bid to fight the fakes high fashion designer' products, they provide immutable ledger which is paired with either a NFC or QR code on each Babyghost' products, users can verify its authenticity on VeChain's application by easily scan it.

Prior to that, sneaker manufacturer has deployed the transformation. The Greats x Beastmode 2.0 Royale Chukkah was the first consumer product that uses a smart tag integrated with blockchain, accommodate by Chronicled. The Royale 2.0 is equipped with a smart tag that comprises the digital information and each item's limited edition number to prevent imitate items. Users can also interact with exclusive content and another buyer.

Furthermore, blockchain technology also could be beneficial for food & beverages manufacturing & retail industry. An example to be considered is Highland Scotch whisky distillery Ardnamurchan has partnered with digital tech firm Arc-Net, that provides scannable QR code on each bottle. This act gives importers and buyers with "absolute certainty". It's also impacted on health issues, to prevent sudden death by fake liquor.

2. Blockchain Supports Supply Chain Management for Security & Transparency
"Blockchain platform enables the company to easily track individual products, The challenge is supply chain system, which, particularly in the fashion industry, is complex and obscure. even parts,"Blockchain and the database system can be a relevant marketing & branding tool if we able to extract the insights from the data". along with the journey from supplier to customer."
Eventually, from all of the supply chain' information, it will lead as a plus for the companies that focus either on sustainable products or company that get involved in #WhoMadeMyClothes campaign, by Fashion Revolution. It's applicable as trust added and transparency for the brand, and as a storytelling medium for their customers to communicate how beautiful circumstances behind their products, and more further in the direction of referring as a standard expectation.
The challenge is company need to collect as many as they can, to provide more accurate marketing & branding strategies.
One of fascinating pioneer example is Martine Jarlgaard, a London-based fashion designer, in a partnership with Provenance on 2014. By attaching a unique digital token on each garment, all parties involved from farmer, designer, manufacturer, until customers can register and track each step on the blockchain via Provenance website/ application. That also serves as an e-commerce.
"Blockchain as a Distributed Ledger, that can help to give reliable details about ownership"
3. Blockchain Serves Marketing & Branding Tool

Not only supporting supply chain information from upstream to downstream, but also by having all of that information, the companies can create relevant branding and marketing strategies that suitable for their target markets.

A sophisticated company as an example that quite recent is 1trueid, an Italian based company that focused on blockchain technology, that already did the collaboration with Alessandro Gherardi®, by developed MTM Shirt 4.0. By embedding special secure & washing resistant tag on the product, that connected to Alessandro Gherardi Su Misura application for one-to-one engagement. The objective is to create dynamic marketing strategy, either by providing a customer service chatbot, or to invite the products' owners for Alessandro Gherardi events, including to give them special offers.

From the company's standpoint, its practically distribute real-time analysis to easily sets time offers and circumstantial pricing, aiming for revenue uplift. Its also supported by integration with retail card permit to complete audit trail for purchased products.

4. Blockchain for Exchange Goods Transaction

Blockchain allows quicker and efficient identity verification process, without third-party support. Each user can closely and securely monitor their personal data. Have you ever heard or probably perform change ownership process for luxury goods? With this technology, consumers can clearly see the change ownership log of the goods.

In the meantime, the existing luxury goods industry, that involved in this technology is diamond ownership's exchange, by Everledger. It's a London-based company that has placed more than 1.6 million diamonds on a blockchain. The records listing on the system are include the color, carat, and certificate number of the diamonds.

These are only 4 numerous on-going functions of blockchain for retail & luxury goods industry. For sure, more companies will take part on the transformation along with a more mature infrastructure.

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Blockchain technology for fashion: a future revolution? | FTA

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However, are you aware of the definition? Don & Alex Tapscott in Blockchain Revolution (2016) defined blockchain as " an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. " Probably now you are wondering: who invented blockchain?

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Written by Lenzing.

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Transparency and sustainability remain two of the largest topics within the global fashion industry today. While many brands and retailers are beginning to pay more attention to their supply chains' environmental and social impact, adopting new ways of working more transparently remains a challenge. However, thanks to the emergence of new technologies, like blockchain, retailers can improve supply chain traceability while offering more transparency into their manufacturing streams.

Following the shift of the 1990s to offshore production, which saw many fast-fashion retailers relocate their production factories abroad in pursuit of lower labour costs, supply chains have become more complex and opaque. According to recent research from the Fashion Revolution, only 31% of the top 62 surveyed global retailers disclose part of their garment production sites, with only one brand revealing the full list of all its production sites. This remains problematic, as the lack of transparency into supply chains makes it more challenging to hold fashion companies accountable for the conditions under which their garments are made.

Simultaneously, there is increasing demand from consumers and industry players alike for more sustainable, ethically made products. Two respective global studies conducted in 2020 by the IBM Institute for Business Value in association with the National Retail Federation and leading Austria-based sustainable fiber producer, Lenzing, found that 77% of consumers surveyed said sustainability is important to them, 57% of respondents were willing to change their buying habits to reduce any negative impact on the environment, and 70% will actively educate themselves on sustainability through researching the production process. Another study carried out by Morning Consult found that 64% of respondents were more likely to purchase a garment if new technologies could prove its sustainability claims.

One latest technology, which lets retailers prove their sustainability claims while offering greater transparency, is blockchain. People familiar with the concept tend to think of cryptocurrencies, like Bitcoins. For those unfamiliar with this relatively new and disruptive technology, blockchain is a digital network created to help decentralize trade and allow for more peer to peer transactions. Many compare it to an encrypted Excel sheet, which keeps track of all transactions approved by a digital, decentralized system. People can access this digital ledger and add new information, which is then linked to the current data stored and become part of the chain. But how can the fashion industry make use of this technology?

When it comes to manufacturing, suppliers can use blockchain technology to store and share information regarding the source of raw materials -- from how it was grown, where it was stored, the amount shipped to the textile mill and the number items made -- to create a permanent, immutable digital record of all the materials used in production. By storing this information concerning manufacturing in a blockchain system, rather than through an internal or analogue system, all the information added to the blockchain can easily be accumulated and self-validated, while remaining accessible to anyone with a QR Code or NFC reader.

The first garment tracked using blockchain technology was made by Danish designer Martine Jarlgaard in 2018. The result of a partnership between A Transparent Company, Provenance and London College of Fashion's innovation agency, each step of the manufacturing process of a jumper was tracked and registered via blockchain through the Provenance app. Since then, other major fashion players have begun to explore how blockchain can help the garment industry work better together while creating a permanent record of the origin of materials used in production.

In late 2020, Lenzing, fashion brand ArmedAngels, and wool tops producer Schneider Group joined forces with TextileGenesis™, a pioneering traceability platform designed to support the apparel ecosystem, to launch a new pilot programme. The pilot uses blockchain to trace the origins of 45 garments containing TENCEL™ and LENZING™ECOVERO™ branded fibers, and AUTHENTICO® organic wool, from supply chains spanning six countries. This unique pilot, which uses the innovative Fibercoin™ technology from the TextileGenesis™ platform, allows the three companies the opportunity to issue digital tokens related to the physical shipments of the LENZING™ECOVERO™, TENCEL™ and AUTHENTICO® fibers. The tokens generate a unique 'fingerprint' and authentication mechanism, providing a secure, digital chain-of-custody across the textile value chain.

Photo credit: TextileGenesis™

"Fashion is one of the most fragmented industries, resulting in highly opaque supply chains. Our focus from the beginning has been to build a truly scalable fiber-to-retail traceability platform for the industry," says Amit Gautam, CEO & Founder of TextileGenesis™. The collaboration with ArmedAngels, Schneider and TextileGenesis™ is the second blockchain project supported by Lenzing, following its debut blockchain traceability platform for TENCEL™ fibers launched at the Hong Kong Fashion Summit in 2019.

Although there are still challenges to be faced with the widespread adoption of blockchain, the future potential for the technology is evident. Blockchain is unregulated at this point in time, without any standards or certifications set in place to safeguard and structure the ongoing development of blockchain solutions. Blockchain is also costly, making it unviable for many smaller brands. However, the future possibilities offered by blockchain are too large to be ignored. "We believe traceability and sustainability are deeply interconnected, and as market pioneers, we are paving the way for the rest of the industry," says Robert van de Kerkhof, Chief Commercial Officer and Board member of Lenzing.

To find out more about Lenzing, go to www.lenzing.com

Header photo credit: Lenzing

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How blockchain is paving the way for greater transparency & sustainability within the fashion industry

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Transparency and sustainability remain two of the largest topics within the global fashion industry today. While many brands and retailers are beginning to pay more attention to their supply chains' environmental and social impact, adopting new ways of working more transparently remains a challenge.

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Trust Issues: The Fashion Edition. Meet Blockchain, My New Therapist

If you've been anywhere near the investment or cryptocurrency world recently, the term "blockchain" will probably ring a few bells. To some, it will give them entrepreneurial excitement. To others, crippling anxiety due to the fear of the unknown bandwagon everyone seems to be hopping on to. The general population often associates blockchain with only the financial world. However, allow me to demystify this technological term and explain how blockchain can not only be used in a plethora of industries, but is now being integrated into the fashion luxury market at a record-breaking speed.

What is Blockchain?

In simple terms, blockchain is a type of database that is used to record and store data in blocks, which are then chained together. As new data comes in, it is inserted into a fresh block. When that block is filled with new data, it chains itself onto the previous block, allowing the data to be chained together in a chronological order from old to new. "Block" and "chain" = blockchain. In even simpler terms, it's a chain of data presented in nicely linked and visible blocks.

Any type of information can be stored on a blockchain, but the most common use to date has been as a ledger for transactions. This is why it has been predominantly used in a decentralised way in banking and cryptocurrency. It allows for transparency, as the timeline of data entered becomes irreversible and immutable. In Bitcoin's case for example, transactions are permanently recorded, and anyone can view the historic chain. Each block in the chain is eternal once filled to capacity and is given an exact timestamp as to when it was added to the chain. This allows for an extremely transparent order of events. The transparency and irreversible nature of blockchain does not mean the contents of a historic block can never be altered, but it would require the agreement of the majority of a decentralised network to implement a change.

To summarise, blockchain was created to allow digital information, in its original form without edit, to be recorded and distributed. Blockchain is already being used in a vast number of ways, including the food industry (tracing food products' journeys to their intended location), healthcare (securely storing patients' medical records), property ownership, voting systems, and, the focus of this piece, supply chains.

Blockchain and Luxury Fashion

The record-keeping technology is being used in numerous ways in the fashion industry, primarily for transparency in supply chains and the transfer of ownership of digital fashion. The latter is a whole separate ballpark I'll get into shortly, as the digital fashion economy is shaking up the market...

Blockchain enables purchasers to see the entire history and origin story of a garment, from the yarn it was sown on, the cloth it was cut from, and its entire purchase and transfer history since. It allows for apparel production and distribution to be traceable and transparent. It is every sustainable purchaser's dream in being able to have physical evidence that the garment they're purchasing is, in fact, sustainable (if it so claims to be). Sustainable and ethical practices in the fashion industry have the potential to be expanded exponentially through the integration of blockchain.

Authenticity is another blackhole of the fashion luxury market, especially if a user is buying pre-loved items. Counterfeit goods are a huge market, and unless you are purchasing from a trusted reseller, counterfeiters have adopted such attention to detail that some items are almost indistinguishable from their originals.

Where blockchain tracks and stores supply chain information through an embedded chip, customers can see first-hand the origins and journey of a product to enable genuine authentication. This eases the ability to eliminate not only counterfeit products, but those that have also been unethically sourced. The added benefit to this is that nobody can modify, lose or destroy a record once it has been added to the blockchain, so the margin for falsification is slim to none.

Martine Jarlgaard, the technology pioneer working in the intersection of sustainability, technology, fashion and art, was the first to test this concept at the Copenhagen Fashion Summit in May 2017. She produced the first garments having smart labels recorded on the blockchain. Each step of the manufacturing process was recorded in the label for the owners and the brands to authenticate.

Blockchain technology in fashion can also improve efficiency by reducing the production and distribution line. This is done through the entire supply chain being on one centralised digital platform, avoiding the unnecessarily long time it would take to identify the origin of an item. Data is easily reconciliated across all lines and is integrated on one platform.

Another use is for royalty payments. If a designer intends to receive royalty payments, blockchain can be used to track this. Licensed designs and trademarks can be tracked using blockchain, as well as royalty programs or sales originating through the designs. All with the help of a nifty little chip.

LVMH have jumped on the technology, by creating a blockchain platform, AURA, using Ethereum. LVMH partnered with ConsenSys and Microsoft to launch Aura, created to authenticate luxury goods and allow consumers to trace the origins of their products. The platform has been built in recognition of the growth of the pre-loved market and demand for the resale of luxury items. Soon, it's predicted most second-hand platforms will require digital certificates to resell luxury goods.

Digital Fashion: No Longer Just for Online Dolls & Gaming

The pandemic has done its fair share on shifting the world as we know it, and it didn't spare the fashion world. Digital fashion has emerged as a new way for individuals to personalise their online identity. Yes, that's right - you can now buy digital-only clothing. Can you wear it in real life? Nope, this clothing exists only online. So, think pixels rather than fabric. As outrageous as it sounds, we are moving further into the curation and cementation of one's online presence, and digital fashion is here to assist just that.

While digital fashion has predominantly been part of the gaming world, where one can choose the appearance of their avatar, it is now revolutionising the fashion industry. It's expressing one's self, but online as opposed to in person. What makes digital fashion so great is that virtual fashion allows designers to experiment more with tech in clothing, expanding into styles that couldn't come into fruition in the real world for several logistical reasons. The possibilities are endless. Think of all the real-life wardrobe space one could save!

So where did it come from and how does it work? A Scandinavian company, Carlings, released a digital-only clothing collection in 2018 with a handful of items ranging between £9-£15. Customers would purchase an item, and then send a photo to Carlings for their team to edit the purchased digital outfit onto the customer's photo. It proved hugely successful.

Following that in May 2019, digital fashion met blockchain. Digital fashion agency The Fabricant designed a stunning one-of-a-kind couture dress and sold it on Ethereum's blockchain as a non-fungible token. The piece was sold at an auction for $9,500. Not too shabby for a digital dress.

What Are NFTs in Fashion?

Non-fungible tokens (" NFTs ") are cryptocurrency tokens representing unique, irreplaceable, one-off items. These NFTs are then stored on a blockchain and act as proof of ownership of any asset, be it real or virtual. The niche of owning intangible assets, especially as the world is becoming more digitized, is becoming more alluring by the day, and so NFTs have been skyrocketing. For example, the founder of Twitter, Jack Dorsey, sold his first tweet as an NFT for $2.9 million. The tweet read "just setting up my twttr". Some think it's madness. Others ask why this is any different to the price that "priceless" art may attract at auction (particularly when it's authenticity may be in doubt...).

NFTs got their introductory hype back in 2017 from CryptoKitty, an Ethereum-based NFT game initiated by Vancouver-based Dapper Labs. It allowed users to breed rare, digital cats, on the blockchain. This sparked the procurement of digital goods and the world has not looked back. Roham Gharegozlou, CEO of Dapper Labs explained "...in fashion, authenticity is important, limited edition is important, being the first to wear or discover something is important - and it's impossible to prove the authenticity of a digital thing without blockchain". (Source of quote: 6 ways blockchain is changing luxury | Vogue Business).

Cliff Fluet, Joint Head of the Media & Entertainment group at Lewis Silkin LLP, MD of Eleven Advisory and Chair of the Ivors Academy, joined The Collective last month to discuss NFTs and their increased prominence in the fashion and retail industry. You can view the recorded webinar here, and read the full article here.

Digital Fashion & Blockchain

Digital collections are becoming increasingly popular for fashion brands, with the likes of Puma, Hugo Boss, LVMH and Gucci testing the waters. Even Rimowa is set to launch and auction off NFTs. Louis Vuitton collaborated recently with the videogame League of Legends to design limited edition skins for players in-game. This then inspired a real, physical collection of the skins. Gucci has also partnered up with AR fashion-tech platform Wanna to distribute digital sneakers as NFTs. The virtual trainers can be purchased for $12 on Gucci's app, or $8.99 on Wanna's app.

Earlier this year, a shoe collaboration between design studio RTFKT and digital artist Fewocious cashed in around $3.1 million. More than 600 pairs of virtual, digital shoes, issued as NFTs, sold out in 7 minutes. Karinna Nobbs, co-CEO of NFT marketplace The Dematerialised, said "NFTs are fundamentally going to change digital ownership, creative structures, the creative economy, how we view money even. This is bigger than the Internet." ( What the NFT Gold Rush Means for Fashion | Podcasts | BoF (businessoffashion.com).

Back in June, London Fashion Week broadcast its first ever digital ready-to-wear collection. Viewers were able to follow a live model dressed in the garments from the virtual collection as they transformed in real time. Viewers were able to purchase the assets online after the broadcast.

Virtual self-expression has been around for years in the form of gaming avatars, in whatever medium that may be. The majority of online videogames, that usually enable a user to embody one main player, have allowed users to customise the appearance of these players from clothing to hairstyle. And so naturally, this has evolved into the ability for us as humans to customise our own virtual and digital appearance. It's all quite full circle really.

Fashion NFT platforms are now emerging too. Brand New Vision, a Hong-Kong based fashion NFT platform, has just closed a seed investment round led by Animoca Brands, a blockchain gaming and NFT player whose valuation topped $1 billion just last week. The market is going to be booming for 3D digital assets in the form of digital fashion collectibles, as we can already see.

Blockchain & Resale: The Circular Economy

As set out in my previous article, which you can read here, the resale luxury market is growing at a rapid speed. Blockchain will soon become a necessity, and maybe even mandatory, in the resale market for authentication purposes. Not only will the platform require it to have further assurance the goods are authentic, but users will want to see it too for peace of mind. The introduction of technology into the fashion industry is also enabling the continued growth of 'Resale-as-a-Service'.

Blockchain can very easily be integrated into the resale economy. Data is of the utmost importance in the circular economy as it provides concrete certainty (albeit digital and non-tangible) in the resale market. Incorporating blockchain into the creation of a luxury fashion item can combat all these uncertainties and will make for a much brighter and clearer future in the resale world.

End of the Chain

As we are adapting to a more digitized way of living, we expect to see continued growth in the use of blockchain outside its financial origins. Blockchain creates a link between a fashion item's physical existence and digital identity. A cryptographic seal, chip or serial number is the one thing needed to act as a physical identifier of a product's digital or physical source. Historically, a company's supply chain was intentionally non-transparent in order for designers to maintain their original sources of production. However, a shift in consumer attitudes to a more sustainable and ethical sourcing of garments has meant people want more transparency, and that's where blockchain plays a vital role. Fast fashion is being put to the side, and while many brands are claiming sustainability of their products, often it's hard to determine. Not with blockchain though. Clothes can now be tracked from raw material to finished article all thanks to a digital ledger.

Blockchain is still in its infancy and the naysayers will continue to point to the lack of regulation and proven track record. It will be interesting to see how regulators deal with the decentralised technology as the market adapts to its benefits. To date, blockchain champions are enthusiastic about the possibilities of decentralised self-regulation.

Individuals are now expanding and pushing the boundaries of creativity by blurring the lines between the physical and digital world. Gaming, virtual reality, retail marketing and other live 3D content environments are all on the rise within the luxury industry. Ultimately, people want what others cannot have. And as far into the psychoanalysis world that I could go with this statement (where I'd probably make Freud proud), the bottom line is that human beings want uniqueness. Scarcity. One-offs. Originals. This is what NFTs can offer digital fashion. And blockchain can facilitate the whole process together in one pretty, sparkling chain.
Want to join The Collective, and contribute to the debate? Email us at: The.Collective@lewissilkin.com

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Adoption of Blockchain in the Fashion Luxury Market

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With the existing structural problems in the supply chain infrastructure illuminated, we need to be asking, “How can we make blockchain work for us?”

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discuss:

a brand or company that has implemented blockchain successfully into its business model

identify 1 business use case with examples!

1. FibreTrace (material traceability)

2. AURA LVMH (luxury market and counterfeits - reference this in Trend 3 instead)

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Timeline - Further Research:

1968: Ivan Sutherland "The Sword of Damocles"

1980s-90s: SEGA & Nintendo VR Gaming

2010s: Oculus, Meta & HTC Vive VR Headsets

2020s: Apple Vision Pro, Sony / Google, Qualcomm & Samsung Partnership

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As someone who has worked in the digital industry for the last seven years, I've always been fascinated with emerging tech, especially the likes of virtual reality (VR). Since its inception, VR has opened our eyes to what's possible with technology. VR lets us think well beyond the human experience and immerses us in a digital world that almost feels real. It takes us to places we've always wanted to go and helps to provide solutions to industry challenges like never before.

Before we go any further, let's talk a bit about what VR is, as there are lots of ways to think about this emerging technology.

VR creates environments, experiences and interactions that look and seem real. When they wear a VR headset, users are transported into a three-dimensional, interactive world that can be explored and manipulated. This digital environment is designed to engage multiple senses, including sight, sound, touch and movement.

Immersive content is just as important as the hardware. Without it, there isn't a "simulated environment" that can be brought to life. Content creation comes in many forms-from gaming, training and experiences to education and travel. The space for content creators in the VR world is expansive.

The History Of Virtual Reality

It's important to understand how VR began to see how far we've progressed. Today, we are seeing a resurgence when it comes to VR, as it certainly has seen its fair share of up-and-down moments.

In 1968, Ivan Sutherland introduced the world to what is commonly considered the first head-mounted augmented reality display, known as "The Sword of Damocles."This groundbreaking invention laid the foundation for the virtual reality devices we use today.

Over the decades, tech advancements have accelerated the development of VR. In the 1980s and 1990s, companies like Sega and Nintendo developed VR gaming systems, albeit generally with limited success. It wasn't until the 2010s when companies like Oculus and HTC Vive introduced high-quality VR headsets that leveraged powerful graphics and motion tracking technology.

Virtual Reality Today

Recently, Apple's Vision Pro made headlines, putting VR back on the map as "the tech to watch." Meta's entry into the market with the Oculus Go headset made a similar headline splash.

While gaming has been a driving force behind VR's popularity, its uses are not limited to this space. Various industries, such as healthcare, education, architecture and engineering, have embraced VR as a powerful tool. Surgeons can use it to prepare for complex procedures, students can explore ancient civilizations and architects can create virtual walkthroughs of buildings before construction even begins.

Today, it's becoming easier for consumers to leverage VR-which hasn't always been the case. Historically, the VR headset was equal parts bulky and uncomfortable. The hardware is getting better, albeit not entirely there yet (at least in my opinion.) Mega-companies are doubling down on consumer-based VR, such as Meta, Sony and Samsung.

While it is one of many players in the market, Apple's expertise in user experience and ecosystem integration could bring significant advancements to the VR space. Google, Qualcomm and Samsung have also partnered to create a mixed-reality platform.

An area that I have been personally interested in is called "VR cinema"-a method that could get more people introduced to the world of VR. As someone who has been an avid movie-goer for as long as I can remember, seeing the downturn of cinema during the pandemic was heartbreaking for me. I started to dig into what cinemas were doing to reinvent themselves, and that's when I found a new type of medium-one that inspires people to go back to the cinema for something new and exciting.

In short, VR cinema is all about immersive experiences that can be brought to life in existing theaters. This innovative form of storytelling offers a unique and communal way to enjoy content, allowing participants to share the virtual space and collectively engage in the narrative journey-without having to spend thousands of dollars to experience VR.

With the rise of streaming services, changing customer preferences, and access to more forms of immediate content consumption, viewers are becoming more interested in shorter-form content and different experiences that fit with their lifestyles. The VR cinema concept provides an experience option for traditional cinemas.

Surround Sync (VR technology) and parent company White Spark Pictures (VR content) are two companies paving the way in this space. Surround Sync is both the hardware and software package; according to its website, it uses existing entertainment infrastructure and venues. Meanwhile, White Spark Pictures creates content that can be distributed globally in these VR-enabled theaters.

White Spark Pictures has produced two 360-degree VR films, The Antarctica Experience and Beyond the Milky Way, and both leverage the Surround Sync package. When I had the chance to experience the films in real time, it all came full circle-I felt like I was actually there.

How Businesses Can Get Started With Virtual Reality

If you are a business that is looking to integrate VR into your offering, now is the time. There are a few key points you might want to consider before delving into VR.

* What is your goal in incorporating VR into your business model? What are you aiming to achieve (e.g., product visualization or customer engagement)?

* Who is the key audience you are looking to reach? And how tech-literate are they? What will the overall user experience be like?

* What content will you need, use or create as part of this effort? Does this need to be developed, or is it out there in the world already? How big is the content lift?

* Will you need hardware and software? How will VR integrate with current operations and your existing tech stack?

* How much budget is allocated to this effort? Are there other administrative considerations in areas such as legal, safety and compliance?

With such interesting advancements upon us, it's a pivotal moment, regardless of the industry you are in. This convergence of technologies and content opens up new avenues for work, play and creative expression.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

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Council Post: The Evolution Of Virtual Reality: Exploring The Past, Present And Future

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The space for content creators and businesses in the VR world is expansive.

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Reuters: Zara Recycled Polyester Deal (2023)

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Reuters: Zara Recycled Polyester Deal (2023)

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MADRID/LONDON, Oct 25 (Reuters) - Zara-owner Inditex (ITX.MC), the world's biggest clothing retailer, has agreed to buy recycled polyester from a U.S. start-up as it aims for 25% of its fibers to come from "next-generation" materials by 2030.

As fast-fashion retailers face pressure to reduce waste and use recycled fabrics, Inditex is spending more than 70 million euros ($74 million) to secure supply from Los Angeles-based Ambercycle of its recycled polyester made from textile waste.

Polyester, a product of the petroleum industry, is widely used in sportswear as it is quick-drying and durable.

Under the offtake deal, Inditex will buy 70% of Ambercycle's production of recycled polyester, which is sold under the brand cycora, over three years, Inditex CEO Oscar Garcia Maceiras said at a business event in Zaragoza, Spain.

Garcia Maceiras said Inditex is also working with other companies and start-ups in its innovation hub, a unit looking for ways to curb the environmental impact of its products.

"The sustainable transformation of Inditex ... is not possible without the collaboration of the different stakeholders," the CEO said in a speech at the event.

The Inditex investment will help Ambercycle fund its first commercial-scale textile recycling factory. Production of cycora at the plant is expected to begin around 2025, and the material will be used in Inditex products over the following three years.

CAPSULE COLLECTION

Zara Athleticz, a sub-brand of sportswear for men, launched a capsule collection on Wednesday of "technical pieces" containing up to 50% cycora. Inditex said the collection would be available from Zara.com.

Some apparel brands seeking to reduce their reliance on virgin polyester have switched to recycled polyester derived from plastic bottles, but that practice has come under criticism as it has created more demand for used plastic bottles, pushing up prices.

Textile-to-textile polyester recycling is in its infancy, though, and will take time to reach the scale required by global fashion brands.

"We want to drive innovation to scale-up new solutions, processes and materials to achieve textile-to-textile recycling," Inditex's chief sustainability officer Javier Losada said in a statement.

The Ambercycle deal marks the latest in a series of investments made by Inditex into textile recycling start-ups.

Last year it signed a 100 million euro ($104 million) three-year deal to buy 30% of the recycled fibre produced by Finland's Infinited Fiber Co, and also invested in Circ, another U.S. firm focused on textile-to-textile recycling.

In Spain, Inditex has joined forces with rivals including H&M and Mango in an association to manage clothing waste, as the industry prepares for EU legislation requiring member states to separately collect textile waste from January 2025.

($1 = 0.9458 euros)

Reporting by Corina Pons and Helen Reid; Editing by Cynthia Osterman and David Holmes

Our Standards: The Thomson Reuters Trust Principles.

Corina is a Madrid-based business reporter focusing on coverage of retail, infrastructure and tourism including some of Spain's biggest companies like Inditex and Ferrovial. She was previously a senior correspondent in Venezuela, where she reported the Chavez and later Maduro government's efforts to retain power and the effects on the economy. Contact: +690725854

London-based reporter covering the European retail sector through a global lens. Focusing on companies including Adidas, H&M, Ikea, and Inditex and analysing corporate strategy, consumer trends, and regulatory changes, Helen also covers major supermarket groups like Ahold Delhaize, Carrefour, and Casino. She has a special interest in sustainability and how investors push for change in companies. Previously based in Johannesburg where she covered the mining industry. Contact: +447584155200

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Zara-owner Inditex to buy recycled polyester from US start-up

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Zara-owner Inditex , the world's biggest clothing retailer, has agreed to buy recycled polyester from a U.S. start-up as it aims for 25% of its fibers to come from "next-generation" materials by 2030.

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GlobalData Research

timeline of VR history - pick key dates and create timeline graphic.

1970s-80s: interactive computing era

1990s: gaming and simulations

2010: contemporary VR era

2015: proliferation of VR tech for consumer access

2020s: rise of AI, cloud computing advancements and 5G in 2019 has accelerated VR tech use cases

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The history of virtual reality (VR) is longer than you might think. VR is entering its second generation, which is expected to have greater appeal to consumers as well as enterprises compared to the previous generation. VR technology has evolved significantly over the past five years, with improvements on both the hardware and software side. However, issues such as latency, nausea, high prices, and underdeveloped ecosystems have been obstacles to widespread adoption. VR companies are increasingly using AI and cloud technologies to develop stronger ecosystems, while the arrival of 5G promises to address the latency and nausea issues.

Timeline

Invented in the 1950s, VR's development has experienced peaks and troughs. The first VR head-mounted display (HMD) system, The Sword of Damocles, was invented in 1968 by computer scientist Ivan Sutherland and his student Bob Sproull. Meanwhile, the term "virtual reality" was popularised by Jaron Lanier in the 1980s. Ten years later, VR was used for training and simulation in the US military and the National Aeronautics and Space Administration (NASA). Mass production of VR systems began in the early 1990s, led by Virtuality, which opened dedicated VR arcades.

Contemporary VR devices emerged with the introduction of the PC-connected Oculus Rift prototype in 2010. Between 2014 and 2017, the market progressed from PC-tethered headsets (e.g. the HTC Vive) to console-tethered headsets (e.g. Sony's PSVR) and mobile-tethered headsets (e.g. Samsung GearVR and Google Cardboard). Untethered headsets (e.g. Oculus Go, Lenovo Mirage Solo, and HTC Vive Focus) arrived in 2018, making VR an independent platform.

The major milestones in the journey of the VR theme are set out in the timeline below.

The history of virtual reality

From Sensorama to Oculus Quest and beyond

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

1956 - Sensorama, considered to be one of the earliest VR systems, was invented.

1968 - The first VR HMD, The Sword of Damocles, was created.

1977 - Developed at MIT, the Aspen Movie Map enabled users to vitake a virtual tour of Aspen, Colorado.

1984 - Jaron Lanier founded VPL Research, one of the first companies to develop and sell VR products.

1991 - The first VR arcade machine, Virtuality, was introduced.

1994 - Sega introduced its VR-1 motion simulator in its SegaWorld arcades.

2007 - Google introduced Street View, which provides panoramic views of locations.

2010 - The first prototype of the Oculus Rift headset was designed.

2014 - Facebook acquired Oculus for $2bn.

2014 - Sony announced the launch of Project Morpheus, a VR headset for its PS4 console.

2015 - Apple awarded the patent for a head-mounted display apparatus.

2015 - Google launched Cardboard, which uses a head mount to turn a smartphone into a VR device.

2015 - Samsung launched the Gear VR headset.

2015 - The HTC Vive headset, developed by HTC and Valve, was unveiled at Mobile World Congress.

2016 - The first generation Oculus Rift device was released.

2016 - Sony's introduced PlayStation VR (PSVR).

2017 - Microsoft launched the Xbox One X, its VR-ready games console and headset.

2018 - Facebook revealed camera-loaded glasses optimised for 'social VR'.

2018 - Facebook released its untethered Oculus Go headset.

2018 - Lenovo's Mirage Solo, the first headset running Google Daydream, became available.

2019 - Sony announced that it had sold more than four million PSVR headsets.

2021 - More than 85 million VR headsets will be in use in China, according to PwC.

2023 - Cloud-based VR gaming will be increasingly prominent, supported by 5G networks.

2030 - VR will be a $28bn market, according to GlobalData forecasts.
This is an edited extract from the Virtual Reality - Thematic Research report produced by GlobalData Thematic Research.
"Metaverse company" Facebook assigns 0.0006 of revenue to metaverse safety

How the metaverse will help us connect in the future workplace

The Metaverse: Future of post-pandemic business, or just another attempt to kickstart VR/AR adoption?

Metaverse developers need to be well versed in data privacy

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VR is entering its second generation, the technology has evolved significantly over the past five years. Here is the history of virtual reality.

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page 18-27: history of VR

general overview to supplement timeline section

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some industry application opportunities

early examples of adoption since 2015 with Tommy Hilfiger and Coach to immerse customers in latest runway shows - seems like the first use case within fashion (360 degree runway shows while the tech was in its infancy)

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LONDON, United Kingdom - When Apple's iPhone first appeared nearly 10 years ago, few could fathom the extent to which it would transform our daily lives. Today, much like mobile before it, a rising technology platform has the potential to create what Canadian media theorist Marshall McLuhan called "new patterns of human association," unleashing a tsunami of innovation.

For years, Virtual Reality (VR) and Augmented Reality (AR) - a view of the real world that has been "augmented" by layers of computer-generated content - have been the stuff of science fiction. Both still have their fair share of sceptics. Yet, driven by Moore's Law and the rapid advancement of processors, screens and other commodity components coming out of the smartphone supply chain, VR and AR are finally poised for mainstream adoption with some calling them nothing less than a " new medium of human experience."

Back in 2014, early VR pioneer Chris Milk explained the profound power of VR: "You read a book; your brain reads letters printed in ink on paper and transforms that into a world. You watch a movie; you're seeing imagery inside of a rectangle while you're sitting inside a room, and your brain translates that into a world. And you connect to this even though you know it's not real, but because you're in the habit of suspending disbelief. With virtual reality, you're essentially hacking the visual-audio system of your brain and feeding it a set of stimuli that's close enough to the stimuli it expects that it sees it as truth. Instead of suspending your disbelief, you actually have to remind yourself not to believe."
So what does this mean for fashion?
In the past decade, the fashion industry has driven growth largely by tapping emerging markets, opening hundreds of new stores, particularly in China. But as Chinese demand has cooled, many have sought new growth online, which Luca Solca, head of luxury goods at BNP Exane Paribas, has called "the new China."

"A number of things have changed in the luxury industry. As you know, the luxury industry was growing 8 percent before - now it is growing 2 to 4 or 5 percent in the next year and it's going to stay there," said Olivier Abtan, a partner at the Boston Consulting Group. "Now, in this slow growing market [brands are] considering digital very seriously," he added.

For some, virtual and augmented reality technologies offer a powerful new digital growth channel. "When one thinks how engaging VR could be, I imagine that this will indeed be even more important than mobile in the grand scheme of things," said Solca. "However, it took 20 years for e-commerce to reach an inflection point," he cautioned. "I'd imagine VR would need a similar amount of time to really shape our everyday experience in the same way as our mobile phones."

But momentum in the VR/AR space is building quickly. Late last year, HTC Vive announced a venture capital alliance for virtual reality technologies; comprising 27 firms, the initiative has amassed $10 billion dollars of deployable capital. Last October, digital distribution platform Steam reported adding 1,000 new VR users daily, with over 600 VR apps already on the platform. And technology heavyweights are doubling down in virtual and augmented reality. See Facebook's Oculus Rift to Snapchat's Spectacles.

In this early stage of development, accurate projections of future market size are difficult. But according to Goldman Sachs, revenue from VR- and AR-related hardware and software is expected to reach from $80 billion to $182 billion by 2025.

Virtual reality and augmented reality could certainly become a powerful channel for brand-consumer interactions, much like mobile and social are today. But current pricing ($600 for an Oculus Rift headset, $800 for an HTC Vive) will slow mainstream consumer adoption for the moment, according to Goldman Sachs.

In the meantime, there are plenty of enterprise opportunities for fashion companies. "The obvious first step in the apparel industry is designing and development tools, and we are working with a lot of brands and a lot of supply chain companies behind the scene on this," said Ari Bloom, CEO of Avametric, a San Francisco-based startup working in VR/AR. "You think about the ability to have a more digital experiences: the amount of time and money you can save not having to sample thousands of garments to get to three or four hundred!"

Virtual simulations of store environments could also be useful to retailers. "In VR, specifically, you can [test] two different environments - and that is really powerful," explained Bloom. ShopperMX, a virtual reality platform developed by Chicago-based firm InContext Solutions, allows retailers to experiment with signage, product display and layout without the time and resource commitment required to build and test these elements in the physical world.

But over the next decade, it is ultimately consumer adoption of VR/AR that will drive the most opportunity for fashion companies - and already some brands are dipping their toes in the space. In October 2015, Tommy Hilfiger became the first major fashion retailer to deploy virtual reality headsets in its stores, inviting shoppers to immerse themselves in a 360-degree experience of the label's Autumn/Winter fashion show. This year, American accessible luxury brand Coach is following suite, installing VR headsets in stores in 10 malls across the US to provide consumers with full access to its latest runway show.

Gap, too, is experimenting. Last month, the retailer unveiled an augmented reality dressing room that allows consumers to try its ranges digitally. The experience, built with Bloom and Avametric in collaboration with Google, has its drawbacks. For a start, it only works with Google Tango smartphones, which have yet to be widely adopted by the market. But the specific limitations of the Gap experience aside, AR has lower barriers to adoption than VR, which is costly and comes with a steep learning curve for consumers. And in recent cycles, AR applications - mostly geared towards trying on clothes - have spread relatively quickly as fashion brands and retailers jump on the bandwagon.

Unsurprisingly, beauty brands have been early to AR. Within the last year, Sephora, Charlotte Tilbury and Rimmel have all launched AR applications that allow users to try on products via a filter on their phones.
But do these applications offer real value? Or are they just marketing gimmicks?
"The number one difficulty has been that there are a lot of false prophets at this stage," said Tom Adeyoola, chief executive of London-based virtual fitting room company Metail, whose augmented reality "try-before-you-buy" solution aims to drive concrete business results. According to research conducted by Metail in conjuction with Tufts University and the Kellogg School of Management, the company's AR application can boost sales by 22 percent.

Its bigger potential lies in the power of data collection, however, illustrating how consumer-facing VR and AR applications can drive back-end benefits. "Our big partner in India is using data that is coming through to re-cut their clothes to match the fact that India is not a one-size demographic - people are taller in the North and shorter in the South. They are starting to rethink and recut clothes," said Adeyoola. "For another retailer, for example, we saw that only 20 percent of their customers matched the clothes that were cut. By resourcing the garments, they could do a better job of matching that demographic."

For the moment there's little doubt that VR and AR remain in their infancy. And much like e-commerce 10 years ago, when fashion and luxury brands were reluctant to sell online, there are those who doubt the potential of these new technologies. "But if the consumers are there, they have no choice," says Abten. "If consumers complete their transition into VR/AR channels, brands - even the luxury ones - will have no choice but to embrace."
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[ At CES 2017, a Glimpse of Tech Destined to Transform Fashion ]

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Virtual Reality: Growth Engine for Fashion?

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LONDON, United Kingdom - When Apple's iPhone first appeared nearly 10 years ago, few could fathom the extent to which it would transform our daily lives. Today, much like mobile before it, a rising technology platform has the potential to create what Canadian media theorist Marshall McLuhan called "new patterns of human association," unleashing a tsunami of innovation.

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Timeline of Early VR Adoption Cases In Fashion (Since 2014)

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Timeline of Early VR Adoption Cases In Fashion (Since 2014)

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fashion adoption to showcase runway shows

customer experience

focus on content creation for growth rather than an avenue to sell product - VR aids to build communities around the brand

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Fashion and tech are always eager to grasp at one another; working together, each stands to gain a great deal. When fashion embraces tech, it looks cutting-edge, forward-thinking, smart. When tech aligns with fashion, it looks high-end, in-touch, sexy. Naturally, the two are making eyes at each over the very latest and greatest in applied science: virtual reality.
Racked is no longer publishing. Thank you to everyone who read our work over the years. The archives will remain available here; for new stories, head over to Vox.com, where our staff is covering consumer culture for The Goods by Vox. You can also see what we're up to by signing up here.
"The possibilities for VR to revolutionize the fashion industry are endless," Jaunt's VP of marketing communications Miles Perkins tells Racked by e-mail. Jaunt has been fast and furious to take the lead in fashion VR content, working with Elle, InStyle, 7 For All Mankind, and The North Face. "Wouldn't we all want to be able to go to Fashion Week in Paris or New York?" he muses. "We can make experiences like attending a Paris runway show from your living room a reality. In the not too distant future, we think consumers could even buy clothes directly from the virtual runway."
"The possibilities for VR to revolutionize the fashion industry are endless."
Runway shows have been an early and obvious experimentation for fashion's use of virtual reality. Topshop recorded its fall 2014 runway show with the help of 3D agency Inition, making the experience available in stores for three days following the February 2014 live event. Tommy Hilfiger added a VR video to flagship stores in US and Europe this past October, showing its fall 2015 runway show. "These days, you can't just wait for people to come into the store and try on your jackets. You have to provide entertainment," Tommy Hilfiger CEO Daniel Grieder told The Times. "It's not about turnover by square foot anymore. It's about surprise by square foot, or newness."

Rebecca Minkoff went a step further with accessibility by not only making a VR recording of its fall 2015 runway, but making it available to anyone with a half-decent smartphone by selling a customized version of the Google Cardboard headset .

Cardboard is Google's inexpensive VR viewer made of, yes, cardboard. The viewers are crafted to Cardboard's specs by a handful of manufacturers, starting at just over $20. The low cost of entry is key to Google gaining an early foothold on the emerging category. Its main competitors at the moment are the Samsung Gear VR (released late November, starting at $99), Oculus Rift (that's the one Facebook bought, requires a gaming PC to run, and is due early 2016 with pricing estimated between $300 and $500), Sony PlayStation VR (which hooks up to the PS4 and should arrive in the first half of 2016 at a cost of "several hundred dollars"), and HTC Vive (which requires a gaming PC like Rift, will come out April 2016, and is thought to be the most expensive of the bunch).

"It's important that we are allowing as many people as possible to experience VR for the first time," says Aaron Luber, head of partnerships for VR at Google. The moment we're in now, VR's early stages courting mass audiences, "are the building blocks to get people of all ages excited about new content formats and ways of seeings things."

Rebecca Minkoff CEO Uri Minkoff proudly told Racked, "We're the first fashion brand to democratize access to VR by making it available to our audience at home, or anyone who has a Google Cardboard headset." Casting a wide, easily accessed net was a draw for the brand, too. "For $20 you can put your phone into a cardboard headset and be transported to the front row at our fashion show," he furthered. The production was filmed with the help of Jaunt, who are eager to be first-in with the fashion crowd. "Fashion and VR seem a natural fit for us, allowing us to give audiences a lot of firsts," Perkins explained.
"We're waiting for the technology to evolve a bit."
The promise of being virtually transported to the front row of a fashion show, or on the set of a photo shoot with a celebrity, is glittery, but the technology is imperfect. "We're waiting for the technology to evolve a bit," Minkoff said following the release of their video. "We are still in the early days," Luber notes. "Tip of the iceberg." The number of notable fashion VR experiments are fewer than a dozen, and date back under two years. We timelined the nine hallmark moments in fashion's early flirtations with virtual reality, from a Drew Barrymore photoshoot to Dior's announcement of their very own headset.

"We are still in the early days of VR," says Luber. "The important thing is that these brands are not looking to use VR to sell their product; rather they recognized that VR provides an opportunity to get closer to their users, their fans, and speak them in a new medium," he says, citing Mattel's embrace of the technology as a standout example. "The work Mattel is doing for younger audiences is very important. It's the industries that are catering to these younger audiences that might see success faster." Satisfied being early in with VR, Minkoff says, "We'll let other brands follow in our footsteps, and we'll come back in a few months with a VR experience that sets the bar even higher."
VR provides an opportunity to get closer to fans and speak them in a new medium
Those close to the content-production side of virtual reality are forecasting rapid growth. "The next 12 months will be exciting," says Luber, explaining there will be more mobile devices able to deliver improved VR experiences, more platforms to host content, and more 360 VR cameras readily available to the public. "There will be an order of magnitude higher of people using cameras and creating content which will in turn result in an explosion of more great VR experiences," he says. We wouldn't at all be surprised to see increased VR coverage of the fall 2016 fashion shows taking place in February and March. It would be remiss for the tech-themed spring show at the Met's Costume Institute, "Manus x Machina: Fashion in an Age of Technology," to be without some immersive experience, perhaps accessible to those who won't make it to New York City for the museum's spring 2016 exhibition.

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A Timeline of Fashion's Early Experiments With Virtual Reality

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"The possibilities for VR to revolutionize the fashion industry are endless."

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how VR could improve runway shows for remote viewers (2016)

extra info on the virtual runway trend to illustrate the start of fashion's journey with VR

VR helped the evolution of runway shows from buyer and press events to a full blown brand experience for consumers everywhere - "digital democracy"

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When Alexander McQueen teamed up with Nick Knight's SHOWstudio in 2009 to become the first designer to livestream a show, the way we consume fashion changed forever. Unfortunately, the industry's first stream didn't quite go as planned - Lady Gaga tweeted that her new track "Bad Romance" was to be debuted as the models took to the runway, crashing the host website. Still, a new frontier had been broken, bringing online audiences closer to fashion - and it's one that this season is being pushed to even higher technological ground.

This week, Balenciaga announced that they would be streaming their AW16 show - the first under new creative director Demna Gvasalia of Vetements - to a mobile and tablet app in the form of 360 degree, virtual reality footage. Calling it "a new panorama, for a new era of Balenciaga", the house described the gesture as "an egalitarian proposition, allowing a worldwide audience the unique opportunity to view a Balenciaga show like never before...immediate and real-time for the new creative identity of the maison." While details on how this will look are sparse, we can assume that giant VR headsets won't be necessary - viewers will most likely be able to simply move their phones or manipulate their screens to control the direction of the camera.

"I'm excited about it because it gives the viewer an experience removed from both space and time" - Hussein Chalayan on Virtual Reality fashion

And Balenciaga aren't the only ones. Yesterday morning, renowned runway experimenter Hussein Chalayan announced that shortly after his show today, a 360 video will be available to view online. "I'm excited about it because it gives the viewer an experience removed from both space and time," the designer told us - in other words, the technology allows an almost omnipresent view of fashion. For Chalayan, who is working in collaboration with Swarovski, it's far from the first time he's dabbled in the high tech and futuristic - he's previously shown LED-lit dresses, transformative robotic outfits, and last season, models wore garments that simply melted away beneath streams of water.

360 filming is a technique that's already been employed in several high-profile cases - last season, for what was later revealed to be Raf Simons' final show for Dior, the house made a post-show video available in this style where viewers could use a click wheel to view different aspects of the runway. Back in June, they also debuted Dior Eyes, a 3D printed virtual reality headset found in select stores that promised to "lift the curtain" on the house's latest ready-to-wear show, giving shoppers an immersive look behind the scenes. Björk also famously used the technique for her recent Dazed-premiered "Stonemilker" video, and (unsurprisingly) companies have started exploring the pornographic, first-person POV possibilities of VR headsets.

One question might be - how does it all work? According to Sol Rogers, Managing Director of REWIND - the London-based production studio behind Björk's video, the technology has a couple of different iterations. "Creators have a great deal of choice when it comes to selecting the hardware used to film with," he explains. "Standard cameras can be adapted for 360 degree shooting with the use of bespoke rigs, this footage is then put through a post production pipeline to 'stitch' the multiple videos together to form a single spherical video. There is also a growing demand for 360 degree cameras which remove the need for such a labour-intensive post production period, such as the Theta S from Ricoh." And although the term virtual reality is being used interchangeably with 360 degree filming, Rogers insists that "There's a big difference between immersive pre-recorded video content - 360 degree content - and 'True VR'...and many in the industry object to mixing the two."

So why the sudden surge of interest? Rogers points to Facebook, who bought forerunning VR company Oculus for $2bn in 2014 in an epic case of Kickstarter-turned-goldmine. "Interest in Virtual Reality has exploded in the last three years, mainly thanks to Oculus and their CEO Palmer Luckey," he says. "They have been at the head of the pack when it comes to HMD (head mounted display) development, and its innovations have been a driving force behind the adoption of VR; as the technology continues to improve, more people want to try it which further drives demand for better and better hardware."

"The end of this month will see the release of Oculus Rift, one of the world's first consumer-aimed VR headsets...it doesn't seem unrealistic to expect that a few years down the line, we might all be getting up close and personal with fashion week from the comfort of our own headsets"

That certainly seems to be the case in fashion. Before Instagram was even invented, livestreams broke down the elitist walls encircling the hallowed, secret space of the runway show, opening it up to new global audiences. As technology improved, so did the streams - to the point where watching a runway online might even give you a better view than being there in the flesh. One recent example is Kanye West's Yeezy Season 3 show - with its sweeping camera angles and intimate close-ups, viewers streaming had a kind of epic, cinematic experience that those sat up in the stalls in Maidson Square Gardens were physically distanced from. The adoption of 360 is evidence that this digital democracy is ever-expanding, and gaining pace - with brands increasingly prioritising fans and consumers over now seemingly archaic systems (as with the See-Now, Buy-Now trend embraced to different extents by everyone from Burberry to Prada).

As the industry considers the shortcomings of its current means of operation, the future of the fashion show is being called into question. If clothes on the catwalk are immediately available to buy, the runway becomes less a practical resource for buyers and press to see new collections, and even more of an all-encompassing brand experience, designed to spawn a thousand social media moments. One thing to note - the end of this month will see the release of Oculus Rift, one of the world's first consumer-aimed VR headsets, priced at $600 (that's cheaper than a new iPhone). What this could mean for the future of the fashion show is yet to be seen - but it doesn't seem unrealistic to expect that a few years down the line, we might all be getting up close and personal with fashion week from the comfort of our own headsets.

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Is virtual reality the future of the fashion show?

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Balenciaga, Hussein Chalayan and Dior are all flirting with 360 degree filming - so is the runway video as we know it a thing of the past?

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mission to end textile waste through fibre-to-fibre recycling.

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85% of our wardrobes go to waste, likely without the intent to recycle them, and our disposed clothing ends up in landfills. These include items we may have thought went on to be recycled - in some sustainable way. The complex and intricate problem of garment recycling has sparked SuperCircle, the tech and reverse logistics platform that bridges the gap between retail and textile waste through innovative business relationships that scale the recyclability of discarded textiles.

"We always had this intention of, and this realization very early, even before the launch of [ Thousand Fell]. You can design for circularity but you really need to build this engine to power circularity. And that is the unsexy stuff - the take-back, logistics, and tech. What SuperCircle is and the way we describe it is the tech and logistics infrastructure to link the retail brands with the waste management industry" states SuperCircle co-founder Chloe Songer.

Recycling is in the DNA of the Thousand Fell brand, its founders Chloe Songer and Stuart Ahlum are taking the same business plan and strategy for their footwear brand that has managed to recycle over 3,000 pairs of their shoes per quarter with a capacity for 6,000 at its start in May 2020. Songer and Ahlum have spent an additional 18 months in research and development of footwear, from uppers to soles, and for a recycling program that has been a signature to the Thousand Fell name.

Songer shares, "There are awesome recycling partners like the New Denim Project, Renewcell - as well as, established industrial recycling partners that already recycle massive tonnage waste industrially that you can plug into if you can get enough volume prepped the right way. Brands have the intent on recycling, but there has been no link. No link for how to get back post-consumer waste; how to get it back affordably? How do you sort it? Or, how do you trace and track it to know exactly what the item is? "

What SuperCircle does for brands, including the Thousand Fell footwear brand, is manage logistics of the recycling process from waste to reusable material. There are three principal parts of this logistical acrobatics; tech, shipping, and warehousing. Each covers the broader pain points of the post-consumer fashion industry.

"One of the biggest problems right now is sorting because if you take a grab bag or a 'mass' bag and you don't know what's in it," Songer explains. "Most of those items end up having to go through down cycling waste streams. So our tech systems solve a lot of that. We plug in with a brand partner's website. We pull in all order management history from stores and online. Based on a customer email, we can see what items they've purchased - and we know product data, the entire material breakdown. We are tracing them back to our warehouse [and] the system spits out a set of rules based on the product data, or the fiber data."

With tech, SuperCircle incentivizes consumers with the digital platform necessary to manage and file the amount of clothing, the materials within, and the distribution of garments among the brands and brand partners. From there, customers can participate in recycling while tracking their carbon footprint.

Secondly, SuperCirle and its founders, Songer and Ahlum, have built relationships with proprietary shipping services UPS and USPS. Through these facilitators, SuperCircle has created a shipping network capable of regionally aggregating and collecting products for the lowest rates at the lowest environmental impact possible.

The two preliminary steps culminate at the warehouse network SuperCircle has established to maintain the inventory of fabric and garment waste. Used and damaged products get sorted for specific recycling processes designed to make the most of the waste material.

"We were able to create these custom bails in a way that recyclers can use. That's the biggest disconnect right now. There is no way for brands that have a ton of inventory liability, or individuals who have a ton of clothing in their closet, to actually get the product to recyclers, in a way recyclers can use it," says co-founder Stuart Ahlum.

SuperCircle meets the recycling demands of private recycling companies through the receiving and sorting network, achieving a system that curates bails of materials. Imagine 1-2 tons of garments made with cotton, say 10,000+ t-shirts, sorted from tons of garment waste, and working with designated recyclers to recycle materials responsibly. The effort is exemplary of what it will take to reach a level of sustainability in the fashion industry that avoids the high level of carbon production it partakes in.

An opportunity for retailers, brands, manufacturers, and other industrial departments to get involved will make the process more viable. SuperCircle is using cross-brand aggregation to foster post-consumer recycling viability, as they align with environmental impact with the needs of the business. Incentivizing participation lessens the effort for consumer involvement in the recycling eco-system, retarding the pipeline of textile waste abroad flow haphazardly. Tons of bails end up in underdeveloped countries of the people who have as much aspirational taste as a first-world economy.

As 98% of textile waste ends up in local or international landfills, fashion is at odds with the global economy. In detail, clothing often designed, manufactured, and sold in the global-north traverses the continents into places in Africa, Latin America, and India, causing a humanitarian crisis and often stifling the opportunities for local fashion designers in these areas. A projected 100 billion garments will find their way to a United States landfill in the next five years, and less than 1% of actual garment waste is recycled.

SuperCircle is the evolution of waste management solutions and is presenting it at scale. Any thoughtful scaling operation prior to SuperCircle has been insufficient, and why founders Songer and Ahlum are asking brands and consumers to participate.

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How SuperCircle Is Changing Fashion And Climate

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The complex and intricate problem of garment recycling has sparked SuperCircle, the tech and reverse logistics platform that bridges the gap between retail and textile waste through innovative business relationships that scale the recyclability of discarded textiles.

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transition of a leather goods factory in one for solely next-gen materials.

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Fashion Revolution Week, starting on 24th April, is dedicated to bringing together the campaign for a fairer, more equal and ethical fashion industry. A movement that spans several countries, Fashion Revolution Week calls for an overhaul of the industry that "conserves and restores the environment and values people over growth and profit", as their manifesto states.

While fashion brands are often taken to task when it comes to the practices of the fashion industry, there is one step of the production process that plays a major role: the manufacturers. As we go into this week of campaigning for a better world of fashion, we at Immaculate Vegan wish to highlight a company that is making a lasting change in the industry: , a conscious, sustainability-led manufacturer in China, focusing on working with new-generation materials such as plant-based leathers, including the pioneering c-free Mirum .

Born and raised in Hertfordshire, England, Veshin founder Joey Pringle has a degree in industrial design and has worked in Australia and Canada prior to relocating to China and subsequently Costa Rica. He recalls a meeting that sparked the vision behind Veshin: "I was working in Vancouver as accessories designer - a job that brought me to meet with our factory in China, for a new vegan range. I met the owner of the factory, who were keen to work with sustainable brands. We noted that as they were a leather-goods factory, this didn't mesh well with the vegan ethos of the collection. As the owner was a practicing Buddhist, we pointed out that animals are sacred in Buddhism. He responded that working with leather was indeed a challenge for him."

The factory owner, Hongliang Yu, revealed to Joey that he was planning to start a business that didn't work with materials that exploited animals. Joey came on board by becoming a consultant for this new company, offering him solutions to move away from leather. Later, after being offered a promotion at his job in Vancouver, Joey hesitated. He went back to China and Hongliang, and made a case for becoming a full-time consultant. Instead, Hongliang offered him the position as co-owner. This is how Veshin was born in 2020. "I quit my job as a designer," says Joey. "Veshin is a combination of V for vegan and Shin, which in Chinese means heart."

Over the course of the years, Joey and Hongliang scaled the business and have worked with a variety of brands. They choose them according to five core values: sustainability, transparency, use of new-generation materials, giving back, and wellness. "Ultimately, we only want to be working with brands who align with these values," says Joey. "We realise that not everyone will, but we would like to see them meet at least three out of the five." Some of Veshin's most memorable collaborations to date center around these values: "It's always rewarding to work with value-aligned businesses, with some of the smaller brands really speaking to our values. Companies like AC, Ahimsa Collective and Eslla - with one of the Backstreet Boys on the team! - have been really great collaborations."

Veshin also uses the United Nations sustainability goals in their framework, as well as always being mindful of how they can protect animals and be more sustainable. "This is why we work with new-generation materials, as well as creating a workplace for our workforce where they are paid a good salary so that they can sustain their lives," says Joey.

How do Veshin see their role in the Fashion Revolution campaign? "We'd like to think that we are leading the way when it comes to radical transparency. We want to celebrate transparency and show that factories can take the initiative and be loud and proud about what they are doing to empower other factories. Our role is setting the tone, for others to replicate our model. We want people to copy us - hopefully we can inspire more to do that."

Joey believes that change, in terms of manufacturers' impact, will come when others become more aware of the bigger issues. "Fashion Revolution is more consumer-facing, and I think manufacturers need to learn more. It's the consumers' and brands' responsibility to make sure that the manufacturers are aware and are doing enough - and once they know, they can do more to support transparency and share the stories of the workers, which is what Veshin is setting out to do."

As head of Fashion Revolution China , Joey's aim is to "empower and share not just Veshin's story but lots of different stories in China, to show that it is a good place to manufacture, and the stigma is wrong". With the good work Veshin is doing, we have no doubt he will succeed.
By Sascha Camilli About Sascha:
Sascha Camilli is a vegan fashion writer, speaker and activist. Her book Vegan Style is out now on Murdoch Books. For more about Sascha, you can read our with her or listen to her podcast Catwalk Rebel . You can also follow her on , and .

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We love fashion, but we don't want our clothes to come at the cost of people or our planet.

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"world's first CRM for products"

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algae-based ink to revolutionise black material for garment composition.

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Innovators in Eco-Friendly Packaging and Shipping Supplies

Black ink is on almost everything. Unfortunately, most black pigment is made with carbon black and is generated from fossil fuels. Algae Ink™ is here to change this standard. It is a revolutionary ink developed by Living Ink Technologies that uses algae cells for pigments, making it safer and cleaner to work with, and more compatible with the recycling and composting process. Algae Ink is a net negative carbon technology, with each bucket of ink sequestering the same carbon as two trees.

Today, Algae Ink can replace standard carbon black across a variety of applications and industries. Read on to see how Algae Ink changes the future of packaging, apparel, and durable goods.

For more in-depth information about the history of algae ink and why it is such a tremendous leap forward even when compared to standard water and soy-based inks, check out our post - How Algae Ink is Changing the Print Industry.

Regarding ink, "compostability" refers to how well a substrate composts with a specific type of printing ink. Most paper-based packages are considered compostable, even though inks used to print on them utilize fossil-fuel-derived pigments. This is because inks account for such a tiny percentage of the overall package's weight, and this minute amount of contamination is considered acceptable.

As composting becomes more common, we believe people must consider the impact of the small components of their packages, such as inks and adhesives. One reason we are so excited about Algae Ink is that the pigments (most of what is left on the package) are biorenewable, naturally biodegradable, and therefore safer for our soils.

Currently, Algae Ink is significantly more expensive to produce than standard, fossil-fuel-derived ink. This is partly because Algae Ink is still in its early stages and therefore produced in small quantities (compared to carbon black, which is ubiquitous and enjoys massive economies of scale). It is also because, as is the case in most industries, the cost of fossil fuels is low compared to the cost of producing alternatives derived from renewable sources.

We are confident that, over time, both of these trends will shift, and Algae Ink will become more and more cost-effective to produce. That said, because ink typically makes up a minimal volume of your packaging, it slightly impacts pricing. Depending on your design and solution, you may see a 1-5% increase in price when shifting to Algae Ink, a premium we are working hard to bring down by making Algae Ink more widely used.

*Free print plate sale valid for post-production shipping boxes, paper mailers, water-activated tape, glassine bags, kraft bags, kraft bag & seals, paper bags, and tissue paper for orders placed from December 27, 2023 to January 31, 2024.

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eco friendly packaging for small business

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Are you ready to transition to the world's most sustainable packaging? Shop Algae Ink for your custom packaging. Algae Ink is a net negative carbon technology.

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the decarbonisation of fashion - materials broken down and regenerated with emphasis on high quality.

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mission to extend lifespan of garments.

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Textile repair centre opens in London in partnership with Patagonia

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The URC London opens in Haringey as part of a collaboration between United Repair Centre, Fashion-Enter and outdoor clothing brand Patagonia.

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historical Gen AI timeline from 1950 - 2023 of key developments to the technology

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The rise of generative AI: A timeline of breakthrough innovations

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Generative AI has enjoyed an accelerating journey, from its roots in AI's earliest days in the 1950s to today's near-constant release of innovations and demonstrations leveraging its many capabilities to enhance creativity, efficiency and innovation across industries.

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see AI Timeline for key dates to add for history

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Updated with the latest artificial-intelligence developments, our interactive helps business executives learn the ABCs of AI.

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Five-Year AI Adoption Rate Graphic (2017-2022) 

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Five-Year AI Adoption Rate Graphic (2017-2022) 

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Source:

https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai-in-2022-and-a-half-decade-in-review

use graphic before Gen AI In Fashion section*

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use this as example for denim industry for supply chain transparency (primary research)

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background info on the technology

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industry use cases during 2022:

design (AiDLab)

marketing (CopyAI, Jasper AI, Writesonic)

sales & CXP (StitchFix & GPT-3 / DALL-E 2)

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As this season's fashion weeks wrap up in London, Milan, New York, and Paris, brands are working to produce and sell the designs they've just showcased on runways-and they're starting next season's collections. In the future, it's entirely possible that those designs will blend the prowess of a creative director with the power of generative artificial intelligence (AI), helping to bring clothes and accessories to market faster, selling them more efficiently, and improving the customer experience.

By now, you've likely heard of OpenAI's ChatGPT, the AI chatbot that became an overnight sensation and sparked a digital race to build and release competitors. ChatGPT is only one consumer-friendly example of generative AI, a technology comprising algorithms that can be used to create new content, including audio, code, images, text, simulations, and videos. Rather than simply identifying and classifying information, generative AI creates new information by leveraging foundation models, which are deep learning models that can handle multiple complex tasks at the same time. Examples include GPT-3.5 and DALL-E. (For more on generative AI and machine learning, see " What is generative AI?" and " Generative AI is here: How tools like ChatGPT could change your business.")

While the fashion industry has experimented with basic AI and other frontier technologies-the metaverse, nonfungible tokens (NFTs), digital IDs, and augmented or virtual reality come to mind-it has so far had little experience with generative AI. True, this nascent technology became broadly available only recently and is still rife with worrisome kinks and bugs, but all indications are that it could improve at lightning speed and become a game changer in many aspects of business. In the next three to five years, generative AI could add $150 billion, conservatively, and up to $275 billion to the apparel, fashion, and luxury sectors' operating profits, according to McKinsey analysis. From codesigning to speeding content development processes, generative AI creates new space for creativity. It can input all forms of "unstructured" data-raw text, images, and video-and output new forms of media, ranging from fully-written scripts to 3-D designs and realistic virtual models for video campaigns.

These are still early days, but some clear use cases for generative AI in fashion have already emerged. (Many of these use cases also apply to the adjacent beauty and luxury sectors.) Within product innovation, marketing, and sales and customer experience in particular, the technology can have significant outcomes and may be more feasible to implement in the short term compared with other areas in the fashion value chain. In this article, we outline some of the most promising use cases and offer steps executives can take to get started, as well as risks to keep in mind when doing so.

In our view, generative AI is not just automation-it's about augmentation and acceleration. That means giving fashion professionals and creatives the technological tools to do certain tasks dramatically faster, freeing them up to spend more of their time doing things that only humans can do. It also means creating systems to serve customers better. Here's where to begin.

Understanding the use cases

Generative AI has the potential to affect the entire fashion ecosystem. Fashion companies can use the technology to help create better-selling designs, reduce marketing costs, hyperpersonalize customer communications, and speed up processes. It may also reshape supply chain and logistics, store operations, and organization and support functions (see sidebar, "Generative AI use cases in fashion").

Product development and innovation

Instead of relying on trend reports and market analysis alone to inform designs for next season's collection, both mass-market fashion retailers and luxury brands' creative directors can use generative AI to analyze in real time various types of unstructured data. Generative AI can, for example, quickly aggregate and perform sentiment analysis from videos on social media or model trends from multiple sources of consumer data.

Creative directors and their teams could input sketches and desired details-such as fabrics, color palettes, and patterns-into a platform powered by generative AI that automatically creates an array of designs, thus allowing designers to play with an enormous variety of styles and looks. A team might then design new items based on these outputs, putting a fashion house's signature touch on each of the looks. This opens the door to creating innovative, limited-edition product drops that may also be collaborations between two brands. Products such as eyeglasses could be designed for individuals by using facial-recognition technology powered by generative AI to scan facial topography and adjust for a customer's size and style preferences.

This scenario became reality in December 2022, when a group of Hong Kong-based fashion designers from the Laboratory for Artificial Intelligence in Design (AiDLab) held a fashion show featuring generative-AI-supported designs. Using tools from tech companies such as Cala, Designovel, and Fashable, fashion designers are already tapping into the power of generative AI to spark new ideas, try myriad design variations without having to produce expensive samples, and vastly accelerate their processes. (For beauty businesses, generative AI also provides an opportunity for brands to identify new product formulations, potentially helping to reduce lab testing costs.)

Marketing

Marketing executives and agencies can use generative AI to brainstorm campaign strategies, product campaign content, and even virtual avatars for every marketing channel-and do it fast.

Striking marketing gold can often be a numbers game. Consider TikTok: there's no single winning formula for going viral on the platform. Instead, the more you produce, the higher your chances are of becoming a trending topic and boosting brand awareness and sales. Prompting a generative-AI-powered video platform to create short-form videos for TikTok or other social-media platforms can help save time and costs associated with pumping out social-media content. Generative AI can recognize patterns and trends in viral content and create new content that also follows specifications from the marketer.

These exercises can help in-house marketing teams manage their workloads while reducing their reliance on outsourcing work to creative agencies. Marketers will want to be careful with this approach, however: trying to reach consumers by replicating what other brands have done can counteract the unique identity and value proposition that a brand spends years building.

Generative AI could also be applied to personalized customer communications. Companies that excel at personalization increase revenues by 40 percent compared with companies that don't leverage personalization, according to McKinsey research.

Several start-ups-CopyAI, Jasper AI, and Writesonic, to name just a few-are helping pioneer personalized marketing at scale through generative AI. Using these tools, a marketer's daily tasks might start to look like this: they could choose the type of content they want to create, whether it's an email, a long-form blog post, or something else; add a prompt describing what they are looking for; and include the targeted audience and other parameters, such as tone, that help create marketing communications that are in line with the brand. The AI tool then offers several options from which the marketer can choose.

These tools are most helpful when applied to lower-funnel marketing channels (those that are mostly used to encourage sales conversions) as opposed to more prestigious brand-building communications. Marketers are still required to prompt and edit the work.

Sales and consumer experience

Today's generative-AI-powered chats, which use stronger natural-language processing to better understand and interact with humans, are already a measurable improvement over existing AI chats. That said, there isn't (yet) a foolproof generative-AI chatbot for businesses-current chatbots and other text-generating tools still occasionally make errors that could cause serious customer service disasters. Eventually, though, this technology could help customer support agents outsource complex inquiries-for example, using chatbots to help provide personalized responses in numerous languages.

Today, there are services that assign a generative AI "representative" to a brand to handle customer service queries across email, chat, text, and a brand's own platforms. These services help to reduce customer service wait times and improve response times.

Generative-AI agents can also serve luxury brands, particularly when it comes to "clienteling," a retail strategy whereby sales associates develop long-term relationships with a brand's highest-spending customers to encourage purchases and improve brand loyalty. (High-end brands can hit a sales conversion rate of 60 to 70 percent in luxury boutiques, through appointment-only shopping, for example.) That process has remained somewhat analog and manual, relying on brands' sales associates to reach out to customers through a variety of messaging platforms or texts, and is limited to only when those associates are working. Generative-AI-powered tools can keep the conversation going or make styling recommendations after a shopper leaves the store, coach sales associates on how to engage with customers, personalize communications for specific customers, and analyze consumer profiles and online real-time interaction.

In July 2022, apparel retailer Stitch Fix said it was experimenting with GPT-3 and DALL-E 2, the text-to-image AI generator, to boost sales and improve customer satisfaction with better styling services. These generative models are being tested to help stylists quickly and accurately interpret reams of customer feedback and curate products that customers would be likelier to purchase. For example, the AI tool could analyze all of a customer's feedback, which could include hundreds of text comments, email requests, product ratings, and online posts. If a customer regularly comments on, say, the "great fit" and "fun color" of a certain style of pants, DALL-E could generate images of similar pants that the customer would likely want to purchase. The stylist could then find similar items in Stitch Fix's inventory and recommend them to that customer.

Virtual try-ons are yet another example of how generative AI can improve sales and consumer experience. Paris-based Veesual enables virtual try-on integration for e-commerce fashion brands, meaning customers can choose their model and pick clothes to try on.

How to get started

As exciting as generative-AI technology might be, companies will still want to tread cautiously before entrusting any of their core tasks entirely to generative AI. But neglecting to explore the possibilities that this technology offers could be just as risky, given the pace at which it is evolving and the explosive growth of the user base. Executives can start thinking now about how their businesses could use generative AI. There are a few steps leaders can take to begin.

Make value your North Star

Fashion leaders should outline where generative AI can offer the greatest value to their business. Start by noting which areas-creative design, merchandising, runway campaigns, or clienteling-could benefit the most from generative AI. Leaders can then prioritize the generative AI use cases they should pursue based on the level of impact the use cases may have on their business. Some measures of impact include improving customer satisfaction scores and reducing customer service wait times.

Once the value is identified, use cases should also be prioritized according to how feasible they are to implement; determining how seamlessly generative AI can be used will depend on things like a team's technical skills. Afterward, teams should build a short-term road map to test and validate these use cases. At the same time, they can also consider what long-term goals might include, such as how to build a generative-design platform that can be updated and used by designers for every season.

It may be tempting to have a bit of fun with generative AI, but harnessing its power will take extra diligence. Fashion executives must be intentional in building tools that can deliver value rather than experiment with existing tools indiscriminately.

Know risks and plan to mitigate them

In a previous article, we listed some of the risks of using generative AI. One is that the legal parameters around generative AI's use are still being ironed out. Designers are sometimes criticized for creating derivative works and copycat designs. Determining who owns the intellectual property and creative rights to AI-generated works, which could be based on multimodal data sources such as other designers' past collections, will be decided on a case-by-case basis until there is a strong legal precedent. (Although it doesn't involve generative AI, the high-profile battle between Hermès and artist Mason Rothschild surrounding MetaBirkin NFTs, in which a judge ruled that the NFTs infringed on Hermès's trademark, shows how fashion brands can become embroiled in legal conundrums when new technologies emerge.)

Another risk is bias and fairness in generative-AI systems, particularly around biased data sets, which may present reputational challenges for brands that rely on the technology. For example, if an image-generating tool produces an advertising campaign with inappropriate or offensive images that are then shared globally, a brand's reputation could be hurt. And pointing fingers at the company AI in an attempt at damage control may do little to calm consumer ire.

There is also the risk that employees who use generative AI are not fully aware of its shortcomings and may fail to check for errors introduced by the technology. In this case, businesses must regularly train employees and provide them with the resources they need to understand how to use the technology.

While risks are unavoidable, executives can mitigate their potential impact by establishing a process to address risk, ethics, and quality assurance.

Upskill your current workforce

Generative-AI tools could add value to a host of different areas of a business, so it will be important to educate and train employees-including designers, marketers, sales associates, and customer service representatives-on the use of the technology.

Some businesses have already introduced AI-focused training. Levi Strauss, for one, launched a machine learning boot camp in 2021 to train nontech employees on how to use machine learning in the company's design process. Employees who complete the program create new AI tools that are relevant to their work. One of Levi's goals with the program is to increase the diversity of employees who have tech knowledge so that the company can uncover problems that employees who come from traditional technology backgrounds might otherwise miss. The program also helps teams with different specializations-such as design teams and engineering teams-communicate better and find common ground. Furthermore, Levi's has found that the program helps improves employee retention.

With an AI-savvy workforce, collaboration will take on a new meaning. Leaders should consider: How do we define responsibilities and operate collectively between technical and nontechnical roles? Design and software engineering teams can set up weekly leadership meetings to strategize quarterly road maps and working sessions among teams. Design leads can share their needs for certain insights and tools (a tool that generates design variations from a sketch, perhaps), while engineering teams deliver those tools.

Partner with the right tech support

Fashion businesses will no doubt have to invest in their workforce when it comes to leveraging generative AI, but they won't have to build out applications or foundation models themselves. Instead, fashion leaders can partner with generative-AI businesses and experts to move quickly. A fashion executive might partner with a business (such as Microsoft or OpenAI) that provides new technology or a partner that provides support capabilities (such as cloud computing or APIs).

While the potential use cases for generative AI are coming to light quickly, the future of this technology in the apparel and luxury industries is still being stitched together. But experimenting with new tools today means opening infinite possibilities tomorrow.

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Generative AI: Unlocking the future of fashion

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While still nascent, generative AI has the potential to help fashion businesses become more productive, get to market faster, and serve customers better.

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Fibre Traceability in the Denim Industry

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Fibre Traceability in the Denim Industry

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see FibreTrace section and general overview of the denim industry

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The denim industry is in the midst of an information revolution. For years, the supply chain, brands, retailers and consumers relied on blanket terms like "organic," "recycled" and "eco" to decipher whether a garment is sustainable, resulting in the prevalence of greenwashing. Third-party auditors and certification programs-like the Global Organic Textile Standard, Bluesign and Cradle to Cradle-have been called upon to help validate sustainable claims within the supply chain, but the requirements, in large part, remain veiled by industry speak, forcing consumers to accept information at face value.

But times are changing. This year alone has brought a series of unfortunate events that are, in turn, forcing the fashion industry to own up to the injustices, falsehoods and bad practices it has turned a blind eye to for decades. Thanks to social media, consumers, more than ever, are plugged into the validity of the stories and values brands are marketing to them, and traceability is one way they can fact-check these claims.

In the denim industry, conversations about transparency begin with traceable fibers. "Traceability provides the accountability and transparency of origin and quality, as well as environmental and social impact of fibers," said Tricia Carey, Lenzing's director of global business development for denim.

The viability, quality and growing practices of cotton crops around the world vary greatly. "As a consequence, buyers of cotton deserve to know where their cotton comes from and how it was grown, both in terms of environmental practices as well as labor standards," said Jennifer Crumpler, e3 Cotton manager and fiber development manager at BASF.

In this sense, traceability provides transparency for mills, brands, retailers and consumers. "For many years, the different stakeholders throughout the entire fiber value chain have not fully understood each partner, and we work every day to provide that education, awareness and understanding to everyone," she said.

Each season, however, there is greater access to information and the technology to share, and brands are willing to pull back the curtain and provide that information. As Carey pointed out, "What is there to hide?"

How traceable fibers work

Lenzing made inroads in circularity with the 2017 launch of Refibra, the first cellulose fiber featuring recycled material on a commercial scale. The fiber also introduced a new identification system that makes it possible to identify the Refibra fiber in the finished textile. To make Refibra, Lenzing blends wood pulp and upcycled cotton pulp, which is then dissolved with a solvent. A fiber identification is added to the fiber during this solvent stage.

This identification information can be verified at four global testing labs Lenzing utilizes for fabric certification. All certified fabrics are registered in Lenzing's "e-branding database," through which retailers apply for a license to use the Refibra Technology brand name. The certification is valid for two years.

While the circularity of upcycled cotton is the most important factor for Refibra, fiber identification assures brands of the recycled content, Carey explained. Many brands have made public commitments to recycling or reducing their impacts, and the fiber identification in Refibra substantiates these claims.

Demand for traceable fibers is primarily driven by 100 percent sustainable fibers pledges made by the world's top 100 fashion brands, said Amit Gautam, CEO of TextileGenesis, the maker of Fibercoins traceable technology. "It's not possible to tell a credible sustainability story without underpinning it with transparency and traceability," he said.

TextileGenesis digitizes fiber volume at the point of origin, thereby controlling the amount of authentic sustainable fibers entering the supply chain network. It creates a complete digital chain of custody across all supply chain tiers from fiber through to retail, saving the entire network time and the cost incurred from using paper or PDF transaction certificates, Gautam explained.

Since 2019, Lenzing has collaborated with TextileGenesis to use its blockchain technology to support its Tencel branded fiber business, ensuring the complete transparency and traceability of its fibers in the finished garment for brands and consumers. "The technology of TextileGenesis is more than just traceability, as it can also review the impact and efficiency of the supply chain," Carey said. "Matching physical fiber identification with digital blockchain provides the ultimate checks and balances."

Traceable technology company FibreTrace has been developed to ensure every member in the supply network has the ability and opportunity to partake in the technology from raw fiber to spinner, weaver, dyer, manufacturer, brand and customer through to reuse and recycling.

The company's data provides real-time verifiable insight, which FibreTrace director Danielle Statham said allows for a single, reliable view of the truth. "We can display scientific data surrounding raw fibers and create a unique passport of the item to be read and tracked at every stage of the supply chain from farm to shelf and beyond," she said.

The FibreTrace system uses patented nanotechnology particles embedded in cellulose fiber. These fibers can be mixed into any natural or man-made fiber at the very start of the production process with no impact on texture or performance. The fabric can be dyed, washed, bleached and lasered with no damage to the tracing particles. They will still be instantly readable using handheld scanners at any stage in the supply chain, so users can verify the entire supply chain in real time.

Each audit is recorded on the blockchain, ensuring the information is secure, accessible and irrefutable. The data, Statham described, creates an actionable AI-powered supply chain offering valuable business insights. "We hope to create access to one of the world's largest databases of sustainable product manufacturing," she added.

Oritain takes a different approach to traceable technology. Founded in 2008, the company has transitioned from being a traceable technology for meat and agriculture products, to working with some of the largest cotton producers in the world, including Cotton USA.

Instead of relying on a traceable additive to existing fiber, Oritain technology determines a fiber's "fingerprint" by analyzing its trace elements and isotopes, which are elements that exist naturally in all living things and are impacted by their direct environment, like climate conditions and rainfall, according to Ben Tomkins, Oritain business development manager U.K.

The fingerprint, which can be audited to check authenticity, can provide information about the fiber's country of origin, farm of origin and region of origin. This, Tomkins noted, means Oritain is scalable, flexible and can be implemented immediately into existing supply chains.

BASF's e3 Cotton program is designed to trace cotton from the field in which it is grown through to finished garments or home goods. "We utilize a database collection service called MyFarms that provides not only traceability from the individual field through to the cotton gin, but allows us to collect key cotton growing metrics for each farmer in our program so that growing practices are made transparent to cotton buyers," Crumpler said.

Data collected includes the origin of the cotton grown (at the field level), as well as sustainability measures in seven key areas: water efficiency, pesticide management and usage, soil and fertility management, greenhouse gas reduction, energy conservation, worker health and safety, and identity preservation. The data can be accessed by textile mills, brands and retailers at no cost with the permission of e3 sustainable cotton.

"Today, more than ever before, brands, retailers and consumers want to know they are receiving legitimate products that have been made responsibly and live up to their claims," said Jean Hegedus, The Lycra Company sustainability director. "Having a system in place that can track and trace products is critical to that effort."

The Lycra Company has several initiatives related to traceability. Lycra fibers have a unique tracer embedded in them so they can be identified throughout the distribution chain all the way to the consumer, she explained. This includes the firm's recycled fiber offerings. The entire EcoMade family of products-Lycra, Lycra T400, Coolmax and Thermolite EcoMade fibers-has attained GRS certification.

"This standard allows users to track and verify the content of recycled materials throughout the supply chain and also includes stringent environmental, social and chemical requirements," Hegedus said.

In the traceability sphere, Cotton Incorporated's role is largely to advise the industry on the development of tools. The not-for-profit research organization serves as "an agnostic analyst of the efficacy and viability of technologies related to traceability and as a convener of supply chain decision makers," said Jesse Daystar, Ph.D., Cotton Incorporated vice president and chief sustainability officer.

Every bale of U.S. cotton is connected to High Volume Instrument (HVI) data that includes the physical characteristics of the bale's cotton fiber, including length, uniformity, micronaire (an indicator of maturity and fineness), strength and color.

All that data is then associated with a Permanent Bale Identification (PBI) tag unique to that specific bale of cotton. "The PBI is important as it provides access to the fiber data for matching fiber qualities at the mill level, as well as providing the ginning location," said Vikki Martin, Cotton Incorporated vice president of fiber competition. A bale management system is linked to the PBI data, giving spinning mills the ability to control raw fiber material.

Currently, the entire U.S. cotton industry is working with the supply chain to develop the U.S. Cotton Trust Protocol. This voluntary program will help document and encourage farming sustainability practices to meet the nation's 10-year sustainability goals while creating systems that enable brands to meet their sustainable fiber sourcing goals by using U.S.-grown cotton, Daystar explained.

"This system will work with the PBI and blockchain technology to create and track U.S. Cotton Trust Protocol bales as they become incorporated into the supply chain," Daystar said.

Cost of traceability

The key to increasing cotton traceability at scale, Daystar said, is to create systems that introduce minimal or no additional cost into the supply chain. Some brands have overcome many technical and financial hurdles already, investing the time and resources to create traceability in their supply chain. And programs like the U.S. Cotton Trust Protocol are exploring their role in improving supply chain traceability, he noted.

However, geographically diverse supply chains, combined with the fact that cotton is purchased on a quality basis, don't make this an easy task.

"As we look towards the future, I suspect the industry will be agile, increasing their focus on shorter and more transparent supply chains to mitigate risks from future supply disruptions," Daystar said.

Certainly, tracer technologies will continue to evolve while new technologies are being developed, Hegedus said, but implementation cost and complexity are likely to play a role. The cost of sustainability remains a hurdle for many companies throughout the supply chain, but for many, innovations like traceable fibers represent the only way forward.

"It is very hard to put a value on anything you cannot measure," Statham said, adding that FibreTrace's cost is minimal at 5 cents to 10 cents per pound of cotton or raw fiber. "Depending on volume when this is spread across a brand's product category, we have worked hard to make the cost of FibreTrace almost negligible, particularly when we understand what true transparency really equates to," she said.

And the implications of not having a robust, scientific traceability solution in place, Tomkins noted, can have substantial financial, reputational and operational effects on a business.

Building a critical mass of sustainable fiber producers and brands will be key for scalability, Gautam said. And if done well, he said supply-chain traceability can actually lower costs and improve efficiency across the supplier network. "Suppliers and brands can focus on more value-added activities instead of manually reviewing each product for valid traceability certificates and the constant back-and-forth communication across the entire chain," he added.

Denim demands

As the denim industry works to clean up its image, traceable fibers will become an integral part of brand storytelling. "It goes without saying that the denim market is particularly keen on understanding where their cotton comes from and how it was grown," Crumpler said.

Denim brands, she said, are prepared to use traceability in their communication to consumers, and those that already do so have garnered positive reactions. Crumpler said promoting the traceability angle increased jeans sales and, as a consequence, helped to sell more cotton, thanks to transparency. "I think that this is a very crucial turning point for many brands, and the decisions they make over the next few years will have lasting consequences," she said.

Traceability is increasingly becoming an essential line item. A number of brands and retailers are requiring partners to hold certain certifications as a threshold for doing business, Hegedus said. "Similarly, research indicates a growing number of consumers want to know what's in their clothes, who made them...so we see brands responding to this," she added.

According to Fashion Revolution's 2020 Fashion Transparency Index, brands are moving in the right direction. Of the 250 brands and retailers reviewed, the non-profit found that 40 percent are now publishing a list of their first-tier manufacturers. However, few are sharing details. Half of the reviewed brands are mapping at least one full raw-material supply chain, usually cotton, viscose, wool, recycled polyester, leather or rubber. Certification systems, blockchain and DNA technology are the common tools they use to achieve traceability, Fashion Revolution said.

Transparency forces accountability, which results in change, according to Fashion Revolution. Next year, the organization hopes to see 50 percent or more of brands publishing a supplier list and still more disclosing their processing facilities, mills and raw-material providers further down the tiers of the supply chain. "We know that exploitation tends to thrive in hidden places, which is why focusing on transparency beyond the first tier will become increasingly important," the organization stated.

Companies are successfully using traceable technologies today to tell a real story about their garments-how they were made and who made them. Everlane, Mud Jeans, G-Star Raw, Wrangler and The R Collective are among the labels working to pull back the curtain and share details about the suppliers and factories that bring their businesses to life.

Though the technology facilitates the storytelling, Hegedus said consumers care less about the tech itself. Brands, she suggested, should focus on product assurance and the "human element" that traceability provides. It should answer such questions as, 'is this product from a brand that is aligned with my values? And 'was it made in a responsible way?', she said.

FibreTrace technology allows consumers to interact with brands through augmented reality that leverages product labels and in-store FibreTrace scanners. "When every fiber tells a story, brands can enforce a sustainable change through the power of accountability," Statham said. By engaging with the technology, consumers will "feel part of the positive change."

The company is currently working closely within the supply chain, including numerous "mainstream" denim brands across the globe that Statham said lead the industry in sustainability.

"The denim industry has generated enormous positive impacts of transparency of its supply chain," she said. "We are very proud to be working with some of the most brilliant minds of the denim industry and learn collectively to bring to the market a product that restores trust, shares insights and integrity."

Future fibers

Many believe the COVID-19 pandemic will only further accelerate existing efforts to create a more sustainable and transparent supply chain.

Sustainability, Tomkins said, will be used to regain consumer trust post-pandemic and offer a means for brands to differentiate their value proposition following an initial slump in sales. "The recent outbreak has only heightened our minds to the impacts and fragility of a globalized world," he said.

The financial strains caused by the global pandemic will force consumers to re-evaluate their purchases and give their money to companies they feel they can trust. In turn, Crumpler said the coronavirus will likely create consumers who are even more demanding when it comes to understanding the origin of their clothes.

"And this will likely happen, not just as an emotional response to the coronavirus, but as a proactive way of better understanding the environment in which we live on the planet," she said. "I think the coronavirus has allowed, or in many cases, required end consumers to understand the consequences of every decision they make, and their fiber choices should be just as important as their food choices."

Carey said traceability across all fibers will continue to take root. "One of the key learnings from the coronavirus is that we are globally interconnected," she said. Knowing a product's origins and keeping supply chains accountable are of paramount importance. "Consumers want to know more about their purchases and traceability is part of the storytelling," she added.

And as clothing companies begin to rebuild their businesses, the savviest will take an honest look at the policies they have in place and how they can better themselves for the sake of their employees, consumers and environment.

"We have all rewired our businesses and interactions within daily life and there has most definitely been a spotlight on integrity and truth," Statham said. "Transparency of best practice will be a critical advantage in any part of the supply chain and our view is that adaptation of data-driven transparency will be more critical than ever moving forward."
Read more from New Wave, Rivet's latest sustainability report.

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Transparency In the Denim Industry Begins with Traceable Fibers

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Traceable fibers provide the accountability of denim's origin and quality, and help gauge the environmental and social impact of jeans.

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Gen AI

Gorpcore

Wellness

Stealth Wealth?

Sustainability / Green Marketing

Omni-Channel Experiences - Merging Physical Stores with Digital Commerce

CONSUMER-CENTRIC TECH BASED TRENDS:

Blockchain & Its Uses In Luxury / Why Adoption Is Slow**

VR Headsets & Fashion Uses**

Challenges of Authentication**

FOCUS ON SPECIFIC TREND IDEAS RATHER THAN BROAD TOPICS

CONSUMERS ABLE TO USE ALL THREE TECHNOLOGIES TO INTERACT WITH BRANDS AND PRODUCT:

Blockchain: product origin, sustainability, ethical consumption

VR: the future of customer-brand relations

Authentication: customers use tech to verify products to ease after-market anxiety - will boost conscious consumption - link back to Blockchain and how this could add veracity/credibility to authentication process

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the use of tech to streamline production processes - link to sustainability?

WGSN 'The Future of Supply Chains'

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WGSN 'E-Commerce Strategy: Digital Product Passports'

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Make better business decisions

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The announcement of the new Aura Blockchain Consortium by LVMH, Prada and Richemont threw the blockchain into the spotlight. We decode the uses, the competition, and the friction between transparency and brand control.

In September 2019, high-level executives from LVMH, Prada Group, Richemont and others met at the historic Louis Vuitton family house in the Asnières-sur-Seine suburb of Paris to hammer out the details of a blockchain platform created specifically for the luxury industry by technology company Consensys and Microsoft. The key focus was how the companies, despite being competitors, could develop a blockchain platform that would verify the authenticity and provenance of luxury goods.

"We were talking about every point together, such as, 'What is the appropriate legal entity?', 'What are the governing principles?'," says Timothy Iwata Durie, Cartier's global innovation director, who participated in the discussions. (Cartier is owned by Richemont.)

The result is the nonprofit Aura Blockchain Consortium, open to any luxury brand (who pay licensing fees and a fixed fee per product) with the ability to track and trace any product with a unique digital identity based on a non-fungible token, with all brands collectively contributing to the blockchain governance and strategy. This rare collaboration among luxury players gives a boost to blockchain, an increasing focus for luxury amid consumer expectations for transparency and the pandemic's pivot to digital-only products, though it has had fits and starts in fashion and beyond. (The Facebook-led Libra Association, also announced in 2019, eventually lost 25 per cent of its inaugural members before ultimately rebranding.)

Aura is the newest fashion-blockchain entity to come into play, joining other networks like Arianee, which works with Ba&sh, Audemars Piguet and Vacheron Constanti, and VeChain, which has worked with Givenchy and H&M. Aura is also a private blockchain, meaning only companies on the network have full access and control over their data (brand and client data are accessible only to each brand). While Aura marks a significant development for the technology's relationship with the luxury industry, it also raises questions around how private blockchains can be transparent without being open-access, and how brands who have existing blockchain projects might proceed.

This formal collaboration to embrace blockchain "shows a change of mentality within the industry" previously unthought of, says Marjorie Hernandez, co-founder of the fashion-based Lukso blockchain platform. Lukso is a decentralised, permissionless blockchain infrastructure designed for physical and digital goods, which recently registered Karl Lagerfeld's photographic legacy. "Will they build bridges with other blockchain networks? A consortium-driven blockchain means there are certain authorities in charge and that there is a barrier of entry."

Aura's plans

Aura authenticates products by assigning each a unique digital identity that houses provenance information; additional features can be added over time, and a tech roadmap is in the works, Durie says. The information can be attached to products through various means including QR code or RFID tag, which Prada has begun adding to its products. While "track and trace" capabilities had always been a goal of Aura, the past year's dramatic increase in digital and remote selling made them more important, says LVMH chief information officer Franck Le Moal. Brands have also started endorsing and participating in rental and resale, which hinges on the authentication of products, as well as experimenting with digital clothes and NFTs (which are unique tokens on the blockchain).

There are "advanced conversations" ongoing with other groups and independent brands, says Durie, of Cartier. LVMH-owned Bulgari, Hublot and Louis Vuitton, in addition to Prada and Richemont-owned Cartier, are already using the platform. "Consumer needs have shifted, and the focus on sustainability has accelerated the urgency," Durie says. "It pushes us to reaffirm our conviction and to be more open-minded and meet the needs of our consumer by having tools to give them transparency."

Aura is not pushing brands to adopt any specific uses, but rather providing members access to a platform that has various capabilities throughout a product's supply chain, says Le Moal, of LVMH. Most will use it to offer information on the beginning of a product's sourcing, including raw materials, and factories, and extending to post-sale, including aftercare and secondhand, though it could be used to offer an NFT collection if brand's decide.

While even the organisers of the Aura Consortium are still ironing out details as they arise, they do have a strict point of view on why a private platform is ideal, and what the future might entail.

An "exclusive" luxury blockchain?

Aura is an open consortium, but it is not open to everyone, and operators can decide to hide or show the events they track within the system, meaning that customers only see what a brand gives them access to. Prospective brands submit an application to the membership sub-committee, which vets them and makes a recommendation to the board. "We are not like a gentleman's club, and as long as you are a luxury brand, you're in. However there are codes of conduct and terms of use," Durie says.

One notable example: Durie says that while the technology might enable a brand to create an NFT, the consortium would not encourage members "to engage in speculative behaviour" associated with the hype. "Luxury brands are built for the long term. It's important to make things possible, but at the same time, we are luxury brands and we make things last - longevity is important to us. It is really anchored in the values of luxury brands."

A notable outlier to the consortium is Gucci-owner Kering. Chief client and digital officer Grégory Boutté told Vogue Business in 2019 that he would be open to partnering with LVMH and Kering has since gone on to test blockchain including using third-party providers to certify Ulysse Nardin watches and offer authenticity checks for Kering's eyewear. Kering and LVMH both confirmed they are in ongoing talks about Kering joining Aura. A Kering spokesperson said "the group hasn't identified use-cases that could not be done on existing blockchain solutions and has already launched some initiatives in that field".

Others operate differently: fashion blockchain startups, such as Lukso and Arianee, operate public, decentralised blockchains and open-source protocols, meaning that anyone can join and customers can see every "event" in a product's life cycle. Le Moal, of LVMH, says that creating a private, bespoke platform in-house, versus using an existing option, was important for controlling the processes and the data without a third party in between.

"By us coming together and gaining scale, we have the ability to set standards," Durie says. "We need to make sure we do not put important client data in the hands of a third party or be exposed to an open-source platform. We exist hundreds of years, not five. It's important to protect the integrity of our client information."

Meanwhile, Arianee's public blockchain and open-source solution, means the code is published, and people can contribute and build on it, with brands able to build their own interfaces. The Paris-based firm provides digital passports to luxury goods, and focuses less on supply chain information and more on engaging the customer after a sale, or resale, is made, says CEO and co-founder Pierre Nicolas Hurstel. Breitling, for example, has attached digital IDs to its timepieces and uses them to offer special promotions to owners while allowing the customer's identity to be anonymous. Arianee also has a nonprofit association, whose 35 members include Richemont; it just raised $9.5 million in part from a French government fund.

The open-source protocol allows the public "full transparency", says Arianee's Hurstel. Open-sourcing and decentralised infrastructure is the best way to build trust, adds Antonio Carriero, Breitling's chief digital and technology officer, who is a member of the Arianee Project Association. For now, he views Aura and Arianee to be compatible and complementary, rather than competitive. "Using one, the other or both depends on your priorities as a brand."

Lukso's Hernandez says that while a private blockchain for tracking and tracing is a good idea, the power of blockchain technology is ultimately in decentralisation, meaning that there is no central authority, casting some doubts on Aura's closed control. "In order for users and third-party companies to verify the ownership and the true transparency of a product, that product identity needs to live on a decentralised, permissionless public blockchain," she says.

Aura's Le Moal and Durie say they are open to eventual partnerships. "We cannot say never, but for the time being, we want to develop ourselves," Le Moal says. "We want to be sure we are focusing on the luxury industry, and not all others focus on luxury."

Durie adds that a private blockchain does not require the large energy consumption that most public blockchain protocols do, and says that as sustainability is a key value of the Consortium, this underpins the choice of a private blockchain.

What comes next

As more luxury brands consider their blockchain strategies, questions arise around how different networks may intersect. Theoretically, one product could be added to multiple chains. This so-called "interoperability", is crucial for the success of the technology, says Megan Kaspar, managing director and co-founder of investment and incubation firm Magnetic, which specialises in blockchain and cryptocurrency-based startups.

"It's a historical problem in fashion retail that systems have been siloed and unable to communicate," says Natasha Franck, founder and CEO of Eon, which recently partnered with Gabriela Hearst and Yoox Net-a-Porter to provide digital IDs to products globally. "We create these products and they can't communicate to resellers or customers. The interconnectivity is a foundation for a stronger digital ecosystem. Any time things are able to communicate, it adds more value to the whole network."

In the meantime, Aura welcomes others to join. Cartier's Durie says it's also open to individual brands, and brands that are outside of just fashion. "The more we will be, the better it will be for our industry."

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The direction of travel for fashion's future includes physical clothing with built-in "operating systems" and mixed reality that adds digital enhancements to the world around us. That's according to the founders of two of the leading fashion-tech companies, Eon and DressX, who are helping executives navigate the new stage of the internet.

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Authenticating Luxury Goods with Blockchain

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Authenticating Luxury Goods with Blockchain

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Aura Product Authentication Case Study with Dior's B33 Sneaker

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Aura Product Authentication Case Study with Dior's B33 Sneaker

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Amid a quick and quiet rollout of NFC-chipped, NFT-authenticated men's B33 sneakers, the LVMH-owned brand is hoping to onboard existing customers to new technologies.

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The rollout of Dior's first major Web3 drop - a physical version of Kim Jones's B33 sneakers paired with an NFC chip and authentication NFT - has been quiet, to say the least. There's been little fanfare around the announcement, no big PR push, community endorsements or influencer tie-in, à la Louis Vuitton. What's the deal?

In the world of carefully orchestrated product launches, the quiet drop is no accident. It reflects the current era of luxury's relationship with Web3: it's open to and excited by the potential for the technology to re-invent loyalty and authentication, but it's hesitant to focus on the tech for fear of backlash from both Web3 and traditional consumers.

It could still have a major long-term impact. The brand plans to implement the technology in all future iterations of the B33 line. This could potentially be extended to other products, but the focus for now is on sneakers, a Dior spokesperson said. "We want to guarantee authenticity throughout the product life cycle with more than just a physical card in a shoebox."

The native community is responding. The design of the drop so far has been "perfect", says the artist known as Fvckrender, who copped a pair when they dropped last week. "They just released the shoe. You go buy the shoes, and now you think about the digital part. That's why I like to refer to it as a Trojan horse." That is, luxury brands recognise that these new technologies can ultimately benefit the industry, but often their introduction to customers is best when it's slightly hidden. That's because people might be either unfamiliar with the technology or because it has suffered a particularly polarising notoriety.

Quietly experimenting and distributing the tech among existing customers who are already drawn to luxury products rather than cater to Web3 early adopters - whose fortunes have cratered amid a crypto crash and so-called "metaverse winter" - is the new playbook. "This is good to get Dior customers, not NFT people," Fvckrender says. "Bringing new people [into Web3] is the best way to do it."

Coded language

The Dior Web3 launch was announced on 29 June via an article in men's fashion publication Hypebeast and a tweet, soon followed by details on Dior's website. Nowhere were the words "NFT", "Web3" or "blockchain", but rather "encrypted digital key" amid more standard descriptors such as "enchanting" sneakers punctuated with "iconic codes" and elements including mohair, toile and denim. Only those who are accustomed to looking for Web3 signals might have also noticed more telling details about the multi-part drop: each shoe has an NFC (near-field communication) chip in the sole of the right foot that gives access to a blockchain-based certificate of authentication. Scanning the NFC also will reveal information on the manufacturing process and future sneaker launch announcements.

The first styles to be released, available for $1,350 on 6 July, were limited to 470 pairs. These online exclusive turquoise and brown sneakers also include access to an additional NFT: a "soulbound" token on the Ethereum blockchain that can't be transferred from the wallet that mints it; it also includes a digital twin that can be worn on Snapchat and allows early, exclusive perks starting with the Spring 2024 collection.

The first collectors are set to receive these shoes this week, but they won't receive their soulbound token until 33 days later. The other limited-edition styles - there will be a total of four material combinations and eight colorways which all include an NFC chip - will become available on 13 July as part of the new "Dior Tears" men's capsule collection, which was modelled by artist and composer Cktrl. They are expected to be sold at a slightly lower price, in line with previous B33 styles.

All of the shoes come with an NFC chip that gives access to claim an authentication certificate NFT, which is provided via the private blockchain created by the Aura Blockchain Consortium and accessible within owners' smartphone wallets, like credit cards or boarding passes (not in their crypto wallet). Scanning the NFC and accessing the information is optional, meaning there's no barrier to entry for anyone not interested in Web3 access. But it paves the way for future perks for both the brand and its customers. The brand might, for example, share promotions, suggested product pairings and exclusive products or events. Future owners from the secondary market also benefit because they maintain this link to the brand.

A number of these details indicate how the luxury brand, number two on this spring's Vogue Business Index, is working to avoid some of the more unstable elements of the early days of NFT drops, such as flippers and speculators, and a focus on the "floor price", all tracked via transparent blockchain records and promoted for weeks, if not months, in advance. This resulted in volatile prices and disincentivised loyalty, as often people would quickly buy, then sell, high-value NFTs for profit. Notably, customers of the new B33 sneakers, even the ones with the bonus NFT, can only pay in fiat currency. The authentication certificates are also private, and people can't track sales and transactions. (The 470 soulbound tokens, when minted, will be public.)

Dior's approach is similar to Nike's Dot Swoosh NFT sneakers and Starbucks's NFT loyalty rewards programme, says M7 Innovations founder and president Matt Maher, who advises luxury brands on Web3 strategy and collects many of the Web3 fashion projects, including the new Dior sneakers. "They are hiding the Web3 wires. And probably what will happen in the future is you will expect these things as a luxury client," he says.

Louis Vuitton took a different tact when it launched its Via Treasure Trunk NFTs in June. The Treasure Trunks cost €50,000 and were introduced via a number of high-profile influencers in the fashion and Web3 community, and the first available exclusive product was revealed during a runway show that shut down the Pont Neuf bridge in Paris.

What they have in common is a rejection of flippers (LV's Treasure Trunk NFTs are also soulbound), and luxury hand-holding as purchasers were vetted, curated and guided through the process. Dior's mechanics have a similar traditional e-commerce ethos. Maher, for example, wanted to exchange his sneakers for a different size a day after he bought them; a Dior associate was happy to accommodate this with no delay in shipping. This type of customer service isn't typically built into the Web3 ecosystem.

One key detail of being soulbound is that Dior can't earn royalties on secondhand sales the way it could if the NFTs linked to the shoes were not soulbound. Nike-owned Rtfkt, for example, has earned millions in revenue on secondhand sales of Rtfkt's NFTs, and Web3 native brands Cult & Rain and 9dcc have built-in product transfers designed to facilitate these types of transactions.

"Everyone is doing soulbound, and I get it, but there is an inherent tension on anything soulbound," Maher says. Not being able to transfer the NFT to a more private wallet is one potential future security risk, he points out, adding that many of the crypto whales, including founding members of Red Dao, don't hold most of their assets in their public wallets. "It's like, 'Here is my wallet!' and thus, 'Here is who I want to steal from in the future!' I can't move it from one wallet to another."

However, there are still benefits to Dior in the way this drop has been structured: the certificates of authenticity help mitigate fakes and enable the brand to maintain communications and promotions with future owners if the shoe ultimately changes hands. Plus, Fvckrender says, there are already workarounds to this among collectors who'd rather not share revenue with NFT creators.

It's yet to be determined how Dior, and its new Web3-enabled customers, will embrace the new potential. But the (Trojan) horse is out of the barn.

Comments, questions or feedback? Email us at feedback@voguebusiness.com.

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What Dior's NFT sneakers say about luxury's Web3 future

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Amid a quick and quiet rollout of NFC-chipped, NFT-authenticated men's B33 sneakers, the LVMH-owned brand is hoping to onboard existing customers to new technologies.

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why brands are willing to take the risk - address larger issues of CRM & Sustainability

case study - look to 1-2 different examples of VR tech business use cases for fashion brands (commercial and luxury sectors?)

280-340 words

STRUCTURE (use 1 development only):

VTO Technology:

1. Consumer Pain Point

2. Sustainability & Returns

3. Tech Solutions & Industry Applications w/ Results (Zyler & Zalando Examples)

VR In Luxury:

1. CXP Enhancements

2. Industry Examples (Dior x Harrods & LVMH Japan x SoftBank)

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Zalando Interview & Theme O3: Connected Stores

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Zalando Interview & Theme O3: Connected Stores

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read Zalando interview for insights into how it uses VR tech to solve issue of size-related returns.

read Theme 03 of Connected Stores for insights into how technology has changed consumer interface with brands.

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In 2021, fashion companies invested between 1.6 and 1.8 percent of their revenues in technology. By 2030, that figure is expected to rise to between 3.0 and 3.5 percent. Behind the predicted increase is a conviction among many that technology could create a competitive edge-in customer-facing activities, where companies have mostly focused to date, and, more increasingly, in operations. Technologies such as robotics, advanced analytics, and in-store applications may help streamline processes and support sustainability, as well as create an exceptional customer experience (exhibit).

Consumer digital engagement rose sharply during the COVID-19 pandemic, as a result of more hours spent online, new shopping habits, and rising interest in gaming and virtual worlds. In 2021, people spent on average just below four hours on their mobile phones, which includes about two and a half hours of scrolling though social media. Of the fashion customers who made the move to online-shopping channels in 2021, 48 percent said the pandemic was the reason, 27 percent cited convenience, and 11 percent cited product availability and promotions. The pandemic also boosted digital brand relationships, with 72 percent of customers reporting they interacted with brands online in 2021. In the year ahead, as restrictions ease in some geographic areas, digital interactions will likely stabilize at about 66 percent on average.

Looking ahead, the impact of technology on people's lives may accelerate. By 2024, AI-generated speech could power more than half of human interactions with computers, McKinsey analysis shows. Soon after, more than 75 percent of enterprise-generated data could be processed by cloud or edge computing. This offers a more flexible, scaleable foundation on which brands can potentially build their tech offerings. By 2030, more than 80 percent of the global population is expected to have access to 5G networks, enabling, among other things, faster connectivity and data transfer across Internet of Things devices.

The operational potential of technology is becoming ever more apparent. McKinsey analysis shows that fashion companies that now embed AI into their businesses models could see a 118 percent cumulative increase in cash flow by 2030. Conversely, those that are slower to invest in digital technology will lag behind-and could see a 23 percent relative decline. Over the next three years, potential key areas in which fashion executives could make digital investments are personalization, store technologies, and end-to-end value chain management-areas in which digital can make a real difference to performance.

Fashion's five key technology themes

As fashion industry executives consider how to maximize their technology resources, McKinsey and the Business of Fashion have identified five key themes that could help the industry address some pressing challenges, as well as unlock potential opportunities: metaverse reality check, hyperpersonalization, connected stores, end-to-end upgrade, and traceability first.

Metaverse reality check. The marketing value of digital fashion and nonfungible tokens (NFTs) may now be clear, but fashion brands will need to separate the concrete opportunities from the hype to generate sustainable revenue streams presented by growing consumer engagement with the metaverse.

Hyperpersonalization. Brands have access to a growing arsenal of personalization tools and technologies to upgrade how they customize and personalize their customer relationships. The opportunity for executives now is to harness big data and artificial intelligence to provide one-to-one experiences that build long-term loyalty.

Connected stores. The inexorable rise of e-commerce has forced fashion players to rethink the role of physical stores. Fashion executives can address consumer pain points by using in-store mobile apps to enhance the in-store experience and microfulfillment technologies to leverage the store for the quick-commerce era.

End-to-end upgrade. Digital tools and analytics have transformed key parts of the fashion value chain, but these optimizations are often siloed within organizations, limiting the potential of cross-functional improvements. Brands should embark on end-to-end value chain integration to create more efficient and more profitable ways of operating.

Traceability first. Traceability systems powered by traceability software and big data will help fashion brands reach far into their supply chains to understand the entire life cycle of their products, a key enabler for sustainability road maps.

Of all the technology-based evolutions affecting the fashion industry, one of particular interest is virtual worlds, also known as the metaverse. Global spending on virtual goods reached more than $100 billion in 2021, more than doubling the total in 2015, with around 30 percent of revenues attributed to virtual fashion assets. Amid demand for products such as virtual fashion and NFTs, fashion companies focused on metaverse innovation and commercialization could generate more than 5 percent of revenues from virtual activities over the next two to five years. The task for decision makers, however, will be to focus on specific opportunities.

For many fashion brands, highly personalized customer experiences are a cornerstone of their digital businesses. Their customers expect nothing less. Advancements in AI, analytics, and cloud computing mean that businesses have the tools to work with all types of data across channels in real time. This could support a move to hyperpersonalization, in which technology could help search-based e-commerce transform into individualized discovery of products and styles. This may enable customers to routinely access curated websites and marketplaces, from landing pages to payments. To make that vision a reality, decision makers may need to optimize their data and analytics capabilities and roll them out at scale. While this may create some important considerations (for example, to ensure that customer data is protected and that data collection follows best practices), the upside could be the ability to acquire and retain loyal customers.

In parallel to personalization, the coming year will likely see many brands investing in in-store functionality and experiences, bridging the gap between online and offline channels-and moving away from stand-alone technologies such as magic mirrors, connected hangers, and interactive holograms. In-store mobile "clienteling" apps could offer a frictionless way for store associates to serve customers, while in-store mobile apps can help boost engagement, reduce customer pain points, and increase time spent browsing. Beyond the shop floor, robotics and stock optimization software can help brands and retailers set up microfulfillment centers, integrating physical stores as digital nodes in their distribution and delivery networks and cutting fulfillment costs by up to 90 percent.

From demand forecasting to transport operations, a critical element in expanding the role of technology could be to apply digital tools to make end-to-end improvements in the value chain. To operate more efficiently, brands could consider breaking down the silos that have defined many digitization programs and integrating multiple back-end systems, workflows, and data functions. More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be among their top five areas for digitization as they look to 2025. By adopting digitally enabled value chain solutions, brands could see a 50 percent reduction in time to market, an 8 percent rise in full-price sell-through, and a 20 percent decline in manufacturing costs, our analysis shows.

More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be among their top five areas for digitization as they look to 2025.

More than 50 percent of fashion decision makers say traceability will be a top-five enabler of reducing emissions in their supply chains, but many brands currently have visibility over only direct supplier relationships. We see brands increasing their focus on traceability through their supply chains, helping them address demands from regulators, investors, and customers for greater transparency. As they aim to cut emissions and meet their environmental, social, and governance (ESG) targets, brands could benefit from a common data language to enable comparability, as well as new labeling standards and tracking software. Brands could consider joining forces with peers, start-ups, and industry bodies to establish a common data standard and to share data and knowledge via software platforms, open ledgers, and big data technologies.

One of the few certainties in fashion is that nothing stays the same, and the opportunities offered by technology are continuing to evolve as some markets look to move beyond the challenges posed by the COVID-19 pandemic. The task for fashion decision makers is to consider how to harness technology to creativity, streamline operations, and create value from innovation that can be sustained in the years ahead.

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As technological innovation accelerates, fashion companies have an opportunity to serve customers better whilst also creating a more efficient, more responsive, and more responsible business.

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solves major digital consumer pain point - finding the right size the first time,

VR tech addresses this and reduces returns by 10% (State of Fashion Technology 2022)

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Zalando Invests in Customer Experience With Acquisition of Swiss Mobile Body Measurement App Developer Fision

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All informations about „Zalando Invests in Customer Experience With Acquisition of Swiss Mobile Body Measurement App Developer Fision" at Zalando Corporate ✓ Current information about Zalando SE

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"Luxury In The Age of Digital Darwinism" Report by McKinsey

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"Luxury In The Age of Digital Darwinism" Report by McKinsey

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see graphic of '80% of luxury sales are influenced by online touchpoints'

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The trajectory of digital in luxury has come into sharper focus. Digital is a critical source of growth and a powerful way to increase brand equity. It also enables companies to reimagine key enterprise processes, both front end and back of house. A Luxury 4.0 operating model has begun to emerge: brands and retailers use data to get closer to customers, capture emerging preferences, and streamline the process of turning ideas into new products. But digital will probably bring on further disruption-and players in the luxury market should prepare for it.

This article highlights findings from our new report, The age of digital Darwinism. We focus on the impact of digital in luxury from three perspectives: customer experience, changes to the enterprise, and future disruption.

Customer experience

Online sales of personal luxury goods (accessories, apparel, beauty products and perfume, footwear, jewelry and watches, and leather goods) account for 8 percent of the €254 billion global luxury market. That's about €20 billion-up fivefold from 2009-and we expect online luxury sales to more than triple by 2025, reaching about €74 billion (exhibit). Nearly one-fifth of personal luxury sales will take place online.

Digital is having an even greater impact on how luxury shoppers choose brands and goods. Nearly 80 percent of luxury sales today are "digitally influenced": consumers hit one or more digital touchpoints in their luxury-shopping journeys. Although digital's impact on consumer behavior and luxury purchases varies by product category and price point, nearly all luxury shoppers have enthusiastically embraced the digital lifestyle-this isn't just about millennials.

As these shifts take hold, the traditional, linear customer journey has been blown to bits: today's average luxury shopper engages with brands through multiple touchpoints-up to 15, in the case of Chinese luxury consumers -along a fragmented, highly personalized journey. Half or more of these touchpoints are digital. Even as customers travel from one country to another, they now expect a seamless, coherent relationship with brands across these different touchpoints. Creating this consistent experience is quite a challenge for brands still organized around channels and geographies.

Digital luxury is increasingly a customer-to-customer (C2C) economy. The consumer is central to the shopping journey, from advocacy to sales. Luxury consumers, highly engaged on social media, are evolving from paying observers of the show into actors on the stage. They are becoming, in effect, another marketing channel. This in turn has implications for brands, which must learn how to deal with ambiguity and accept that some aspects of their messaging will be cocreated with their customers rather than controlled unilaterally by their management teams.

Are brands adapting fast enough to the new digital reality and this more articulated map of influence? The answer is mixed. A good number of luxury brands are reacting swiftly and increasing their investments in digital and related activities. But the majority have not shifted their investments in this way. Most are incrementally adjusting their marketing budgets, and that's not helping them keep up with the pace of change.

Changes to the enterprise

Digital is penetrating the value chain and giving companies opportunities to be more effective and responsive. While brands and retailers recognize that it is essential to experiment on this front, there is wide variation in what companies do. The most forward-looking brands focus on three things. They are building a Luxury 4.0 operating model that increases their speed and agility by digitizing their businesses. They are using data to take customer knowledge and relationships to a new level. And fast-moving leaders are forming partnerships across the luxury ecosystem to accomplish what they cannot do on their own.

Luxury 4.0. Industry 4.0-the fully digitized model for manufacturing-is the inspiration for Luxury 4.0. In industries ranging from autos to consumer electronics, Industry 4.0 is creating a new seamless system that ties together self-aware machines in factories, smart logistics, customer data, and design. These connections make it possible to respond rapidly to shifts in demand and customer needs, to reduce costs, and to turn customer data quickly into new products and business models that drive growth.

Will this extend to a sector in which art and other intangibles are dominant factors in the value equation? Indeed, just-in-time design and manufacturing have huge implications for luxury fashion brands. We expect digital and Industry 4.0 to affect luxury operating models in ways that make operations more agile and responsive, without diluting the DNA of luxury products: craftsmanship, unique design, and personalization.

Customer intimacy. Big data and machine learning are bringing authenticity and relevance back into the customer relationship. It may seem paradoxical to use machines to get "real and personal," but luxury brands can win big by using technology to be as authentic with the consumer as they were historically. In the early days of the luxury époque, Louis Vuitton hand-wrote specific suggestions to a customer to recommend particular travel bags for a transatlantic journey to New York City. Today, big data and advanced analytics help brands find opportunities to provide services uniquely tailored to each customer and occasion, so the brands seem as authentic as Vuitton's notes. This will make consumer relevance ubiquitous in luxury.

The luxury ecosystem. Players in the luxury market have a lot to accomplish on the journey to digital, and not much time to do it. To get where they need to go, luxury brands and retailers can complement in-house competencies through strategic partnerships-for example, by enlisting help to create novel and exciting customer experiences. To develop the new competencies that digital requires, companies should become adept at choosing whether to make, to buy, or to partner with others.

Future disruption

What else can we expect? A few trends we're keeping an eye on:

Store wars. Digital will continue changing consumer behavior, fostering an appetite for experience rather than simply for shopping and buying. Consumers are no longer just purchasing a product. They are purchasing the experiences and emotions the brand can offer them. Digital has trained consumers to expect continuous excitement. A consumer's most recent and most exciting online experience sets the bar not only for the next online shopping experience but also for the kind of experience the consumer expects when shopping in stores. The time of reverse omnichannel has started-the store must match the quality of the online experience. Digital is no longer only a sales or communication channel. Instagram becomes the new store window, and digital now becomes the source of inspiration for reinventing the role of the store and the customer experience.

Renting versus owning. Will digital bring disruptive change to luxury, as iTunes and Spotify redefined the music industry? It's not easy to predict how far digitization will go in luxury. However, we do see early symptoms of a broader change, which in the not-too-distant future might fundamentally alter the way consumers approach luxury. For example, start-ups such as Rent the Runway are offering access to a "fashion library" of clothes and accessories on a subscription basis, similar to the way Spotify provides its music service.

The influence of Amazon. The giant online retailer is on track to grab nearly 20 percent of the US apparel market by 2021. This impressive share underscores a reality: the dot-com rush is a "winner take all" game, with clear scale benefits in acquiring and retaining customers, the supply chain, and advanced analytics. Today Amazon has wide-ranging strengths across many types of merchandise, but it's had its greatest success in convenience-led segments and low price points. As a result, its brand portfolio is limited mainly to value or premium brands. What if Amazon starts to focus on luxury brands? Will it replicate the success and disruption it is bringing in the apparel industry? That move into luxury could pose significant challenges for protecting luxury brand equity and maintaining luxury economics.

Digital, a multifaceted opportunity for luxury brands and retailers, will require well-considered actions by CEOs. There is no single recipe for success, but every CEO and top team should consider five elements:

Think and act broadly. Digital is no longer only a sales or communication channel. In our view, it has become a key element of the value equation brands need to master. It spans a range of disciplines, including brand management, customer engagement, retail, and the supply chain.

Prepare for continual transformation. Digital shouldn't be the name of a channel or a specific function of the organization. It needs to be a stress test that brands apply to every element of their offer, so they better understand which opportunities they can capture or which risks they face.

Evolve the organization. Digital requires organizational changes. There's no longer marketing and digital marketing-there's just marketing. Digital and IT officers are now one and the same. The digital officer sits on the executive committee and participates in key decisions over the life of a brand.

Fully leverage the power of big data and machine learning. Advanced analytics is a reality. CEOs should ensure that their teams use it properly to bring authenticity and intimacy back to the customer relationship.

Develop ecosystems. Winning brands source competencies from the outside-their ecosystems-to ensure access to cutting-edge skills.

Download The age of digital Darwinism, the full report on which this article is based (PDF-543KB).

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To survive and prosper, luxury players need to enhance the customer experience and transform their businesses for the digital era.

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LVMH Japan x Soft Bank partner to Enhance CXP with Technology

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LVMH Japan x Soft Bank partner to Enhance CXP with Technology

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vision to provide innovative customer experiences to younger consumer groups

use of VR to highlight brand values, history and artisanal production processes for customers in-store

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LVMH Moët Hennessy Louis Vuitton Japan KK ("LVMH Japan") and SoftBank Corp. ("SoftBank") signed a strategic partnership on February 22, 2022 to enhance customer experience and services for luxury brands by leveraging technology. This partnership combines the expertise of both companies to develop and accelerate new customer experiences in stores and online, using a range of SoftBank solutions and know-how.

LVMH Japan adapts its services to an evolving environment which includes the expansion of online sales, remote clienteling and support for a diversity of interests among new and younger customer segments. Combining LVMH's renowned tradition, creativity and quality with SoftBank's leading-edge technology and proficiency in digitalization, LVMH Japan and SoftBank will take on the challenge of creating innovative customer experiences and accelerating digital transformation. Both will also respond to further changes in the business environment in the future.

This partnership will enable acceleration on the following key innovations and technologies for LVMH Japan:

VR / 5G technologies will enable new experiences and brand stories for customers: Utilizing the power of 5G, customers in stores will enjoy real-time communication with artisans in virtual reality spaces and experience the manufacturing process of products and immersion in the Maison's history and values. LVMH Japan and SoftBank will proceed with consideration for this project concretely to create an innovative customer experience.

LINE-based communication with customers:

LVMH Japan has intensified the digitalization of customer communication by creating official accounts for some brands on the LINE messaging application operated by one of SoftBank's group companies, LINE Corporation. From now on, LVMH's Maisons will go even further and develop new operational marketing initiatives and data use cases with the support of Official Line Account features.

Cashless payments: In 2018, LVMH Japan implemented a payment service application provided by SB Payment Service Corp., a SoftBank group company. This application facilitated China-based QR code payment services and tablet-based payments anywhere within stores, which contributed to luxurious purchase experiences and increased sales. Going forward, LVHM Japan will consider implementing "PayPay" and other QR Code payment services to provide even more cashless options, thereby facilitating smoother customer service for even more clients.

Toni Belloni, Group Managing Director, LVMH stated as follows:

"This new, unprecedented and significant partnership with SoftBank is the reflection of our high ambitions: embracing digital technology to offer new services and features that keep customers at the center. By combining our best-in-class approaches in our respective industries, it will take us forward. The new opportunities offered to our customers are exactly what our talented teams are working for at LVMH: a unique and unforgettable experience"

Yasuyuki Imai, a Representative Director & COO of SoftBank Corp. stated as follows:

"We are proud to have this strategic partnership with LVMH Japan. Under our 'Beyond Carrier' strategy, SoftBank drives DX in various industry sectors, leveraging advanced technologies underpinned by our communications business foundation. With this strategic partnership, we will work closely with LVMH Japan, which runs a number of world-famous luxury brand businesses, to implement a range of measures that enhance customer experiences through technology. As a result, we are anticipating an acceleration of digital transformation in the fashion sector and beyond."

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LVMH Japan and SoftBank Corp. Agree on Strategic Partnership to Enhance LVMH Customer Experience with Technology - LVMH

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LVMH Moët Hennessy Louis Vuitton Japan KK ("LVMH Japan") and SoftBank Corp. ("SoftBank") signed a strategic partnership on February 22, 2022 to enhance customer experience and services for luxury brands by leveraging technology. This partnership combines the expertise of both companies to develop and accelerate new customer experiences in stores and online, using a range of SoftBank solutions and know-how.

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Tech-Enabled Luxury Shopping In Japan by McKinsey

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Tech-Enabled Luxury Shopping In Japan by McKinsey

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references LVMH Japan x SoftBank partnership

the role of SAs are crucial for luxury shoppers

rise of virtual clienteling during pandemic (see Swarovski example - 80% conversion rate)

see benefits to virtual shopping graphic and quote: "customers can visualise themselves in any place at any time wearing any product."

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Shoppers in mass-market categories tend to adopt new channels more readily than their luxury counterparts. But the COVID-19 pandemic forced even the most reluctant consumers to shop online. In some categories, when shoppers move online, brick-and-mortar stores become irrelevant. This is not the case in luxury. Despite a rise in e-commerce activity and a prolonged pandemic, a majority of consumers in the Japanese luxury market say they still prefer to shop in person. Increasingly, they see online channels as a complement to the offline experience. While they may research, evaluate, and, in some cases, purchase luxury products online, the offline experience and sales associate (SA) relationship remain as important as ever.

To better understand luxury consumer sentiments and behavior in Japan, we launched the East Asia Luxury Consumer Survey. In the field from March 2 to March 8, 2022, the survey garnered responses from 1,000 Japanese adults. We then conducted interviews with select consumers to verify our findings. We also spoke to a number of executives in the luxury-goods space to discuss trends and how brands are responding.

This article, based on those findings, provides insights into how luxury consumers in Japan are shopping two years into the pandemic. How geopolitical trends-such as the reopening of China and the war in Ukraine-and inflationary pressures will affect the luxury market in Japan remains to be seen, as these topics were outside the scope of this survey. But it's clear that consumer behavior is fluid and that luxury brands need to adapt.

How luxury consumers are feeling and shopping

The COVID-19 pandemic forced consumers around the world online. In Japan, where online shopping prior to the pandemic was not as popular as it was in the United States, Europe, and China, the jump in digital activity is noteworthy. As the world continues to rebound from the impact of the COVID-19 pandemic, luxury consumers in Japan are gradually resuming their old shopping habits-but with a twist. While the in-store experience remains crucial, shoppers are increasingly turning to digital channels for information and brand interactions.

Luxury is on the rebound

The luxury market in Japan was hit hard by the COVID-19 pandemic. States of emergency and travel restrictions affected revenues, as did the sudden absence of Chinese shoppers. Since 2020, luxury has staged a gradual recovery across the globe; our research suggests that will continue. Drawing on insights from McKinsey's FashionScope data, we expect the luxury market in Japan to grow by approximately 4 percent through 2025. We anticipate this growth will come from domestic shoppers, specifically younger and wealthier demographics. Consumer penchant for luxury (and discount) brands will come at the expense of the middle markets. Additionally, the eventual return of Chinese shoppers, along with gradual increases in the price of products, is expected to offset any persistent supply chain challenges and bolster luxury's rebound in Japan.

While the in-store experience remains crucial, shoppers are increasingly turning to digital channels for information and brand interactions.

Consumers are moving across channels

Two years into the pandemic, 41 percent of luxury consumers say they are researching and purchasing across channels. Increasingly, shoppers are turning to a variety of e-commerce and social media channels for inspiration, information gathering, and, in some cases, purchasing. More than 30 percent of consumers say that they compare products, pricing, and reviews on e-commerce platforms. When asked to identify their preferred online channel for information gathering, shoppers still visit a brand's official website above all others.

In-store experience remains crucial

While luxury shoppers report moving freely among channels, nearly 80 percent say offline is part of their shopping journey (Exhibit 1). When asked about their most recent luxury purchase, shoppers still identify a brick-and-mortar store as the most influential source of information. But their motivations for visiting stores differ. According to luxury-goods experts, shoppers who make purchases less frequently value touch and feel. These shoppers want to physically handle a product and confirm its quality and fit. They believe they avoid mistakes by doing so. In contrast, more frequent luxury shoppers see the store and, in particular, the SA as a trusted source of personalized advice. One luxury shopper we interviewed characterized the SA as a critical relationship: "I am going to stores as if meeting close friends."

The offline experience is evolving

Consumers may continue to favor the offline channel, but their expectations are changing. The COVID-19 pandemic and accompanying store closures forced brands to rethink the sales experience-including how and where it happens. Globally, luxury consumers still wanted to connect with their SAs during lockdown. Digital technology and communication channels offered SAs new ways to interact with customers. According to Ian Rogers, the former chief digital officer at LVMH, messaging apps and other digital solutions became important sales channels during the pandemic: "We know that people want to speak with sales associates from their phones and their living rooms. They want to receive their product in a luxury way at home, they want great services when they do curbside pickup, and they want a video walk-through of the collection by the sales associates." In response, leading luxury brands are investing in the SA role and rethinking fulfillment. Some retailers are doubling down on the in-person sales experience. Our research shows they are right to do so, given that three of the six most appreciated brand interactions involve the SA role (Exhibit 2). Although not new to Japanese culture, the gaisho has reemerged as a way to expand customer interactions and sales beyond the store. Department store Daimaru Matsuzakaya projects that gaisho will account for 30.0 percent of sales in 2024; it accounted for 23.7 percent in 2020.

How luxury brands and retailers can respond

As luxury consumers in Japan traverse multiple channels and channel boundaries become blurred, how can luxury brands keep pace? How can they cater to evolving consumer preferences and simultaneously preserve brand strength? Our research suggests that leading luxury brands think strategically about which channels help them reach their target consumers and provide customers the omnichannel shopping experience they expect. At the same time, leaders identify the channels that help them retain control over brand experience, messaging, pricing, and inventory. Companies can start by focusing on a few key areas, as described below.

Our research suggests that leading luxury brands think strategically about which channels help them reach their target consumers and provide customers the omnichannel shopping experience they expect.

Join the local conversation

Without international shoppers from China-and with the future of travel uncertain-brands are focusing more heavily on domestic shoppers. Luxury brands feature prominently in local chatter on social media channels, regardless of whether the brand has an official presence. Brands that do not engage on local channels run the risk of letting others control their messaging. In Japan, some luxury companies (including Gucci, LVMH, and Prada) have launched official accounts on popular local messaging apps such as LINE. They feature well-known local celebrities and influencers and provide more tailored information about store-based campaigns and new-product releases. Some brands have gone a step further and built regional accounts on both local and global social media platforms.

For example, Longchamp is tailoring both online and offline channels to local customers and, at the same time, addressing decision fatigue. Japanese shoppers in our survey said they had some difficulty selecting products when presented with many options and tended to lean on the recommendations of store staff. To ease the process, Longchamp has launched support services on LINE, on its Japanese website, and at offline store events. Customers using LINE answer a few questions and then receive a message with product recommendations; products can be ordered online or offline.

Craft a seamless customer journey

A successful omnichannel shopping journey is seamless. Shoppers should feel that the journey is consistent, cohesive, and navigable whether they're in a physical store, browsing a digital storefront, or in the metaverse. Increasingly, shoppers also expect all channels to reflect the attention to detail and personalization they have come to rely on in stores.

Through our analysis of leading brands, we identified three actions luxury companies can take to deliver a consistent experience: cocreate new luxury experiences with digital companies, launch online sales teams to support shoppers, and use cross-channel data to enrich the customer experience.

Cocreate new luxury experiences with digital companies. By leaning into digital innovations, brands can create the consistent and personalized experience luxury consumers are seeking. Online shopping through augmented-reality (AR) and virtual-reality (VR) apps brings the luxury experience into consumers' homes, where they can interact virtually with an SA and try on products (Exhibit 3). Some retailers are taking personalization and service a step further by investing in digital mirrors and fit technology (for example, Modern Mirror's Avant-Garde Fitting System), which scans individual customers using medical-grade imaging. After capturing the individual's shape and size, the retailer stores the information in the customer's profile. The customer can then use that information to guide purchasing decisions online or in stores.

For example, LVMH Japan's recently announced partnership with SoftBank is expected to enable the use of VR and next-generation network technology to tell brand stories and provide consumers with unique experiences, such as a chance to connect virtually with LVMH artisans in their workshops. Isetan Shinjuku launched a smartphone app called REV WORLDS where customers can experience the virtual city of Shinjuku and shop at a virtual Isetan store.

Launch online sales teams to support digital-first shoppers. As more luxury shoppers embrace e-commerce, luxury brands must be poised to provide robust online sales support. Premium brand Swarovski offers a potential playbook for luxury brands. During the pandemic, Swarovski launched virtual visits to Swarovski's flagship store in the Ginza district of Tokyo. During these one-on-one visits, shoppers explore the Ginza store, view its specific product collection, and have the SA's full attention. The brand reports that customer satisfaction with the experience is more than 80 percent and that the purchase rate is as high as 80 percent.

Use cross-channel data to enrich the customer experience. Shoppers who move freely among channels provide data on their preferences and behaviors. Leading luxury brands and retailers lean on this information when designing complementary experiences. For example, a top Japanese department store uses data to enhance the shopping experience for customers with an annual spend of ¥1 million ($6,910) or more. Originally, each customer was assigned a dedicated SA who had experience working with the customer, but in recent years, the company has shifted to a team model. Using shared data, the team offers these customers visits to luxury-brand showrooms and special access to runway collections and haute couture. Customers are encouraged to enjoy art, food, and other special experiences while shopping. This company has seen out-of-store sales grow by 10 percent since it introduced this new model.

Recast the store

With luxury shoppers continuing to experiment across channels while preferring brick-and-mortar stores, leading luxury brands are doing the same. A number of brands are reviewing their retail operations with an eye for streamlining and centralizing as much as possible so that SAs have the capacity to focus on customer service (see sidebar, "How to simplify store operations"). Others are carefully reconsidering the role of the store for each customer segment and defining how the brand engages with each segment in the store. Some luxury brands are differentiating service levels for VIP consumers by offering them exclusive access to VIP-only stores and SAs.

A few leading brands have merged online and offline into a new kind of store. The purpose of the store is not to sell products in store but to increase digital sales. Customers can compare stock in other cities and order products in real time through digital channels in the store. Using extended reality (XR), digital mirrors, and fit technologies, customers can visualize themselves in any place at any time wearing any product. Japanese luxury fashion brand Yohji Yamamoto offers an example of a store merging online and offline. Inside the store, large digital signage introduces new products and reports fashion news. The brand also hosts art exhibits featuring photographs and paintings that can be purchased at the store.

Luxury shoppers in Japan have not been as quick to embrace online shopping as those in China, Europe, and the United States. Still, the COVID-19 pandemic accelerated the adoption of e-commerce in Japan. Two years into the pandemic, luxury shoppers say they still prefer a physical touchpoint in their shopping journey. The most successful luxury brands are taking steps to preserve that. Simultaneously, brands are actively innovating digital offerings so consumers can move freely among channels-and still receive the personalized attention they value.

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Japanese luxury shoppers are embracing omnichannel

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Luxury shoppers in Japan are using online channels while holding fast to the in-store experience. How can Japanese luxury-market brands thread the needle?

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pandemic era - video shopping provides a window to the outside world, keeps businesses afloat

video shopping (1-1 clienteling) boosts online conversion rates

could VR Headsets support the rise of this trend?

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examples of Perfect Corp and zero10 - companies that offer AR VTO solutions for brands - research if they also offer VR solutions...

Perfect Corp is a beauty company

zero10 offers AR solutions exclusively

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The retail landscape is undoubtedly evolving alongside the ever-adapting consumer, and with it has come the inevitable technological developments that intersect with the interests and behaviours of younger generations. One of these components is that of virtual try-ons - also known as VTOs - which have not only started to take ownership of the e-commerce world, but have also slowly begun to progress into physical retail.

VTO specifically applies to forms of trying on clothing that takes place digitally, most often utilising a camera function on either a phone or tablet. This involves the integration of augmented reality (AR) technology, which allows customers to view garments in a digitally-generated overlay onto a real world image. There are already a number of governing platforms that have provided this service for years, namely Instagram and Snapchat, which have both established themselves as frontrunners in AR technology by offering a diverse range of filters and lenses. While they have already worked with brands and retailers on bringing VTO to a consumer's home, there are some emerging tech firms that are surging forward in this area, bringing to the plate more dedicated VTO offerings that look to drive consumer engagement and purchasing.

One of these is Perfect Corp, a NYSE-listed company which provides both fashion and beauty retailers with AR try-on solutions for their e-commerce platforms. The idea for the company was initially shaped from the longing for an easier way to purchase cosmetics online, an issue that founder Alice Chang, now CEO, had encountered both as a purchaser of these products and in her previous role as CEO of software company CyberLink. It was here that she met Wayne Liu, who is now Perfect Corp's chief growth officer, president and has worked alongside Chang for over seven years, giving the duo a strong overview of how the AR world has developed in the industry.

VTOs experienced a slow rise to prominence

Perfect Corp's launch in 2015, however, didn't emanate immediate returns. During this period, digitalisation was a new concept that was not yet considered a 'must-have' for businesses in the industry. "We consider the technology pretty disruptive," Liu said in a conversation with FashionUnited. "We try to visualise and digitise. At the very beginning, when we approached a brand, they were often suspicious. They didn't believe that you could present the true colour or true form of something. We have overcome lots of hurdles, such as creating products with adaptive lighting or that reflect the native skin tone. We continue to work with our partner to improve the technology, so all these challenges became opportunities. They differentiate us."

Perfect Corp OurAR platform. Image: Perfect Corp

Now, Perfect Corp has worked with over 500 brands on implementing virtual reality (VR) and AR products, all of which have reported a higher conversion rate following application. The company offers an expansive range of products, but its origins are planted in beauty, an industry for which it offers virtual makeup try-ons, foundation colour matching services and artificial intelligence (AI) skin analysis tools, products it has already integrated alongside Avon, Mac Cosmetics and Douglas. For brands that implement these features, Liu noted that there were various benefits that have presented themselves. Firstly, as mentioned, there is an average sales conversion rate increase of about 50 percent. Meanwhile, customer engagement is often reported to rise four times over, while basket size can increase at an average of 15 percent, sparked by shoppers spending more time on the website exploring the virtual options. Finally, the ability to try-before-you-buy can also lead to a reduction in returns.

Similar feedback could also be said for its activations in the fashion industry, a fairly new area for Perfect Corp, which only introduced VTO options for watches back in January 2022, and later added other jewellery products throughout the year. "In terms of sales conversions, due to Covid customers changed their shopping behaviour," Liu noted. "Usually for jewellery they need to see it, but during the pandemic you couldn't do so. Here, VTO was already a benefit, because you could try on from an e-commerce website, increasing confidence, sales conversion and time on the site."

While AR may not yet be a household term, most young shoppers will already be familiar with the technology. Liu noted that the appeal behind this visualisation of products can largely be attributed to our visually-driven minds and a desire to engage with personalised shopping features - mostly present among Gen Z and Millennials. In terms of implementation, services can also vary depending on the brand, with products adjusted depending on requirements. Perfect Corp works together with a company's own team, most often a technical and design team, to visualise the type of solution they need, modifying where necessary to appropriately present their brand moment.

Physical retail ushers in new world of digital try-ons

Zero10 is another spotlighting the use of AR try-on technology, albeit solely focused on the fashion and clothing industry. While the company's launch was initially born out of the acceleration towards digitalisation during the pandemic, since co-founding it, Zero10's CEO George Yashin has taken its capabilities beyond simply just VTO e-commerce solutions to bring the concept into more fields. This could be seen in the company's launch of its AR Mirror, which it unveiled just four months ago. While still in an early stage, the mirror allows for consumers to view themselves in a product through an interactive screen that can be set up as a campaign poster, in a store window or as a VTO in stores.

Zero10 AR Fashion Platform app. Image: Zero10

Speaking to FashionUnited, Yashin said: "At its basic stage, the AR Mirror could be used as an interactive storefront to attract new customers and increase store footfall, or it could be integrated in-store to speed up a fitting process without using changing rooms. It allows customers to explore and engage with a brand on a deeper level through the digital try-on experience." Next to these abilities, Yashin also noted the mirror's capacity to provide brands with deeper data sets for their customers, helping to analyse their behaviours and therefore provide insights to drive conversion rates and influence marketing strategies. Yashin will now be setting his sights on developing the mirror to be a free-standing, pop-up product, giving it the possibility to appear at just about any location, with feedback from industry partners and consumers to aid in the development process.

Similarly, Perfect Corp is also pursuing physical retail. In fact, it was this sector that was actually where the company first set its roots, launching an in-store virtual trial assistant for beauty, allowing customers to try products on via a self-service device. The product, which is still being used, is particularly popular for quick check outs, most often required in travel retail, where limited shopping times dictate behaviours. However, with Covid, retailers instead looked to become more hybrid, as seen in the rise of in-store QR codes, and turned their investments to e-commerce. Now, for Perfect Corp, it is larger scale or luxury brands that are leading the VTO revolution, aggressively pursuing the sector in order to come out on top and give their high-demand customers a great experience.

It is a similar strategy to that of Zero10's, which is also exploring its partnership options with high-end and luxury clothing brands, many of which have already implemented some form of in-house 3D design departments and have shown interest in further technology adoption. Yashin's plan is to implement the AR Mirrors as a "holistic tech driven solution" with initial partners, before rolling out the concept to more niche brands as the product adapts and becomes more accessible. The pilot technology will first become available this spring among clients based in the US and EU markets, including Coach, which has joined as one of Zero10's partners. Yashin added: "Based on our recent test projects, we can say that brands that integrate AR storefronts in retail will receive a significant increase in store foot traffic."

Zero10 AR Fashion Platform app. Image: Zero10

Covid triggered a rise in hybrid retail experiences

The AR Mirror expanded on Zero10's already wide reaching offering, which also includes an app and the AR Fashion Platform, a site where designers, brands and users can create, share and try on digital clothing. Next to this, the company also recently released the Zero10 Software Development Kit (SDK), which allows brands to integrate AR try-on experiences directly into their own shopping experience. While Yashin said that the company is only just planning its first integration of the kit, he noted that the purpose of such a product is already clear. He added: "We help to solve the problem of trying on clothes for online shopping and show customers how an item could look on them and fit, and how it could match their current wardrobe."

Ultimately, Zero10 hopes that its tech solutions, each utilising its proprietary AR technology, can contribute to increasing customer engagement, improving customer experiences and attracting a younger, tech-savvy target base - namely Gen Z and Gen Alpha. "I think that digital fashion is the next must-have in the fashion industry, and it is well into its next phase of development," Yashin said. "I can compare the current landscape to the beginning period of online retail. It's something new, convenient, with huge potential and if you don't have it or don't use it, then in a perspective of three to five years you will be out of the current agenda. The industry already entered the digitalisation path and it can't be stopped. The only way is to experiment and look for value for both brands and customers."

Perfect Corp meanwhile is hoping to expand into skincare and hair, adding to its already expansive endeavours, and building on what Liu hopes will see it become the powerhouse of digital access. This also links into where he sees the industry going in the not-so-distant future, which he believes lies in the power of artificial intelligence: "VTO cannot stand without AI, it's just the reality. With an AI component, a machine is more like a tool that tries to learn and understand your preference. It's more like a consultant that can then recommend customers the best products. That's why we are coming with a lot of new technologies that merge AR and AI, bringing 'smart VTOs' - a virtual beauty assistant. The future is definitely this hybrid combination."

When asked if he had any advice for brands and retailers looking to enter the space, Liu said: "If you have never done this before, just like any other technology project, we recommend you start with something small. You have to have a proof of concept, so it must be controllable and measurable. Define your own KPIs and run a short proof of concept. If it fails it's still manageable, but if it works, which happens most of the time, then you will want to expand and develop a plan to quickly scale."

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Are virtual try-ons the future of retail?

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The retail landscape is undoubtedly evolving alongside the ever-adapting consumer, and with it has come the inevitable technological developments that...

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how VR tech is used to tackle issue of returns and sustainability angle

mention of AI VTO technology, Zyler, and its adoption has reduced returns by 10%

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Virtual try-on tech is taking the guesswork out of fit and offering more flexibility for customers.

It may also be better for retailers' bottom lines because it can decrease return rates.

Virtual try-on tech comes in a few different forms using AI and AR.

This story is part of "Revolutionizing Customer Experience With AI," a series exploring the game-changing technologies driving customer interactions.

The way we shop is drastically changing, from buy-now, pay-later programs to livestream shows.

But as online sales have increased, so has the number of returns. Since it can be difficult to tell how something looks on you online, many customers have embraced "bracketing," or buying the same product in multiple sizes or colors with the intention of returning whatever they don't like.

Many stores have begun charging customers for returns to offset the costs. In 2022, Insider Intelligence reported that online returns cost the retail industry $280 billion. But what if there was a way to prevent so many returns in the first place?

That's where virtual try-on technology comes in. Instead of relying on photos of models wearing the clothes, customers can see themselves in the clothes with virtual try-on tools.

"If you're guessing how something might look or how it might hang on you from a picture of somebody totally different, then inevitably that's going to lead to people being disappointed when they actually receive the item," Alexander Berend, the CEO of the AI-imaging software company Anthropics Technology, said.

Virtual try-on is taking the guesswork out of fit for customers, and proving to be better for retailers' bottom lines.

"Brands can expand the possibility of conversion and discoverability of their products and also reduce returns because customers would make more conscious decisions," Natalia Modenova, a cofounder of the digital fashion retailer DressX, said.

The founders of two virtual try-on startups, DressX and Zyler, explained the technology and how it can benefit retailers.

How virtual try-on tech works

Virtual try-on tech comes in a few different forms using AI and augmented reality, or AR.

One way is an online-shopping model that allows customers to see themselves in clothing before they purchase it. Anthropics Technology has created an AI try-on tool called Zyler using this strategy.

While some tools require a full-body image of the customer, Berend said that Zyler requires only a few measurements and a picture of the customer's face.

"We start from the clothes themselves and put the customer into the clothes," he said, adding that this can be easier for customers to do since they can upload a selfie that they've already taken.

Then there is technology that could make in-store purchases easier. DressX is a digital fashion retailer that has been testing an AR mirror. Customers can stand in front of the screen and try on garments without having to physically change in and out of them.

"If you are not sure about what color of the dress you're going to like better, you don't have to take it on and take it off in a changing room," Modenova said. "You can just swipe and see yourself on the screen and discover even more products from the brand than you would do if you would go in the traditional fitting room."

Finally, there is technology that allows customers to purchase clothing that only exists online. Once a customer buys a digital-fashion piece on DressX, such as a dress or a jacket, the tech superimposes the piece onto a photo that the customer uploads. DressX uses AI and AR to ensure the clothing fits with a person's body shape, pose, and - if it's a video - movement.

"The time of purchase can be more interactive," Daria Shapovalova, a cofounder of DressX, said. "It'll provide more opportunity to understand if you really need this item or maybe you can wear this particular item just on your post on social media and then choose something that you will wear every day instead."

Fewer returns, better for the environment

The selling point for virtual try-on tech is twofold. First, it can reduce returns by helping customers make more informed purchases.

"There's a few different reasons why people return clothes," Berend said. "People try it on and then they just don't like how it looks on them, or it could be that it doesn't fit, or it could be that you don't like the feel of the clothes. Virtual try-on really goes to those first two in a big way."

Brands such as Marks & Spencer, John Lewis Fashion Rental, and Alfa Vega have used Zyler. "We've been seeing declines of about 10% in return rates from people using us," Berend said.

Second, reducing returns is better for the environment because it saves on wasted inventory and shipping emissions.

In Europe, new legislation requiring fashion companies to cut down on waste could go into effect as soon as 2028, Reuters reported. "Fashion brands want to be aware of how else they can be more sustainable because there are certain guidelines for them now," Shapovalova said.

While virtual try-on technology is readily available, retailers have been slow to adopt AI technology.

"The clothing industry tends to be fairly conservative," Berend said. "We come from a tech background, which tends to be much more willing to shake things up and see what works."

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Virtual try-on tech is tackling a $280 billion problem in fashion retail and offering customers a different way to shop

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Virtual try-on tech powered by AI can make buying clothes better for the customer, take the guesswork out of fit, and help retailers' bottom lines.

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in use by M&S, John Lewis Fashion Rental

uses AI to assist virtual try-ons with aim to reduce returns and increase click-through rates

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WGSN - Brand Strategies: Virtual Shopping

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WGSN - Brand Strategies: Virtual Shopping

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Knix & COS: success rates with virtual try-on technology

MyAva & Zyler: VTO solutions for businesses

Virtual Retail Hubs: virtual stores as a place of commerce, community and entertainment - explorable via VR headsets (optimisation) as well as desktop and mobile

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Avery Dennison - Digital Consumer Behaviour 2023 Report

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Avery Dennison - Digital Consumer Behaviour 2023 Report

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see Section 1 for Digital Consumer Engagement

global shoppers express interest in smart fitting rooms / virtual experiences in fashion (almost half)

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Digital Consumer Behaviour 2023 Report by Avery Dennison

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structure:

*Graphic of GWI 2022 Study of Consumer Interest In VR Experiences*

What Is The Purpose of VR In Fashion? (Apple Vision Pro developments and its importance for luxury sector & digital CXP - democratisation of the tech will soon happen to benefit entire industry so luxury's time to capitalise is now... luxury because of the high price point of the Vision Pro suits HNWIs)

Mytheresa / J. Crew: A Case Study on The Future of E-Commerce (use this to demonstrate where VR could go in fashion within next 10 years - Shop the Edit & SharePlay features)

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Title: What Is The Purpose of VR In Fashion? (reference Appendix for Sociological Context)

traces early days of Apple Vision Pro w/ limitations and disadvantages

Fashion Uses: to aid sustainable design; use of the FaceTime feature for luxury clienteling (reference McKinsey Japan article and BoF Video Shopping video)

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Because we in Silicon Valley are newness junkies, it can feel like an act of sabotage to have memories, but, for better or worse, I have them. It's been more than forty years since I co-founded the first company to make headsets and software for simulated experiences, and came up with familiar terms like virtual and mixed reality. Since then, virtual reality has flooded the public imagination in waves; back in the nineteen-eighties, for instance, it had quite a presence in movies, cartoons, TV shows, the occasional arcade game, and a few early consumer products, like the Nintendo Power Glove. I still love V.R. But, these days, I sense that what I experience of it, what I enjoy in it, is different from what it has come to mean to many enthusiasts.

Back then, at the beginning, did I talk about V.R. like the people I disagree with now? Sometimes I did! I did occasionally promote V.R. as an alternate cosmos that might swallow us all to good effect. I don't agree with that sort of talk now, but at the time the joy of being edgy and extreme was too great to resist. Every young technical person wants to see around the corners that others cannot, to be the harbinger of great change. To explain to someone in the early eighties what V.R. was-to give them a demo-was an ego rush, because they often couldn't grasp what was being said or what had just happened to them. It was a primal validation, a power trip, and I wish I had done it with more humility. But here we are, after almost a half century of products, movies, and startups, and V.R. people still seek that rush. Apple's promotional videos for its new headset-the Vision Pro, a metal-and-glass, ski-goggle-like apparatus that costs around thirty-five hundred dollars-show people experiencing V.R. for the first time. The producers either had to search hard for those people or ask actors to pretend.

Apple's entrance into V.R. has symbolic weight, because the company has had so much influence on computers and phones. Back in 1984, when the Macintosh was introduced, a few members of the Mac team left Apple to join my startup, V.P.L., and help us create the first generation of commercial V.R. products. At the time, we guessed that Apple itself would enter the market in 2010. We knew that the consumer adoption of the technology was a long way off. We were selling tools for millions of dollars to customers like NASA. But despite the conservative clients, our early V.R. software was radically strange. You could program while in our virtual world, and see all the variables not as textual symbols but as virtual objects; there was no source code. I used to wax on about how virtual reality would lead to a new style of "post-symbolic" communication, in which we would make experiences for one another, sharing them directly instead of just describing them.

The hope was to make V.R. a place for spontaneous invention. Virtual reality would allow groups of people to "play the world into existence" on virtual devices that resembled musical instruments. (Instead, we now talk about "speaking the world into existence" using A.I.) It would be like a social lucid dream.

In the intervening decades, V.R. has thrived at two extremes in the quest for "killer apps." It has long been an established industrial technology: if you've flown, ridden, or sailed in a factory-built vehicle in the last thirty years, virtual reality may have played a central role. It's been used to design surgical procedures and train surgeons ever since our first simulated gallbladder, at Stanford Med, some three decades ago; Boeing, Ford, and many other companies started using VR for design in the early days as well. And then there are the visionary, mystical, and philosophical applications. V.R. can be a way of exploring the nature of consciousness, relationships, bodies, and, perception. In other words, it can be art. V.R. is most fun when approached that way.

In between the two extremes lies a mystery: What role might V.R. play in everyday life? The question has lingered for generations, and is still open. Gaming seems likely-but, for most gamers, not so much. There are many reasons why V.R. and gaming don't quite work, and I suspect that one is that gamers like to be bigger than the game, not engulfed by it. You want to feel big, not small, when you play. ("Star Wars" might have got this right with holographic chess.) Apple's initial round of Vision Pro apps, like those from its competitors, aren't entirely compelling, either, and can even have a lonely, dystopian flavor. (Watching a simulated big-screen movie, by yourself?) But my belief is that the quotidian killer apps will come. Maybe you'll use V.R. to learn quickly about the Airbnb at which you've just arrived. Maybe V.R. will help you assemble IKEA furniture. Maybe!

Virtual-reality headsets come in various forms. A major divide has to do with how they acknowledge the real world. Some headsets obscure the surrounding environment completely; this is typical in gaming headsets. But there is another option, which I used to call "mixed" reality, and which came to be known as "augmented" reality in the nineteen-nineties. Some mixed or augmented headsets, such as the Microsoft HoloLens or the system created by Magic Leap, allow you to see the real world through the headset glass so that it can be combined with virtual content using challenging optical techniques. Others, like Apple's Vision Pro and the recent offerings from Meta, capture the real world with cameras, then render it as part of the virtual environment so that it can be combined with fabulated content.

Camera-based mixed reality is vastly easier to accomplish than the optical version, but it is concerning. Early research by a Stanford-led team has found evidence of cognitive challenges. Your hands are never quite in the right relationship with your eyes, for instance. Given what is going on with deepfakes out on the 2-D Internet, we also need to start worrying about deception and abuse, because reality can be so easily altered as it's virtualized.

The attention-maximizing business model that drives current social media naturally gravitates toward alarming content that activates primal fight-or-flight responses. Fortunately, Apple is one of the companies that doesn't rely on that model. Nonetheless, experiences will come from all kinds of companies, and V.R. could agitate and depress people even more than the little screens on smartphones.

Today, in much of the online world, algorithms calculate "feeds"-a term suggesting that people are cattle, and not free-range ones. This is a good reason for wanting virtual reality to be an environment in which users actively create their own content, rather than passively experiencing what big companies have built for them. For most of the technology's history, however, virtual experiences have been hard to build and maintain. This has been one of V.R.'s biggest problems. I saw the first V.R. teaching demonstration of general relativity at least as early as 1992, and have seen dozens more since then; they're often wonderful, and help users grasp the concept in new ways. But they only run for a year or so because there are too many variables in a V.R. system for creators to keep experiences available. Graphics chips change, and with them the layers of mediating software. That's true for other programs, too, but with V.R., when the properties of a headset (like field of view) or an input device shift, the whole experience and interaction method must often be rejiggered. It's too much ongoing effort, so it usually doesn't happen; developers move on to other projects. The exceptions have been locked-down V.R. experiences that assume a minimal level of interaction, which limits the magic.

Still, the first generation of V.R. entrepreneurs thought of it as a fundamentally active experience. In fact, the illusion at the heart of virtual reality requires activity on your part: the virtual world only starts to feel real when you move your head; it's when your surroundings compensate for that motion that they appear to exist outside of you. And yet we often see V.R. depicted as a funnel that dumps spectacular experiences into the brain of the user.

Today, the V.R. community seems to want to make headsets smaller and smaller, until they disappear. But in the old days I'd build one-of-a-kind V.R. headsets into big masks from different cultures, sometimes adding lightning bolts and feathers. I wanted the headsets to be vibrant, exciting objects that enriched the real world, too. Apple's device shows the eyes of the wearer, by means of screens on the front, and this creates the illusion that the headset is transparent. But in past decades we used similar screens to show those in the real world the face of the virtual avatar that the wearer was inhabiting: a viking, an octopus, an abstract geometric construction. You wouldn't want to disguise a motorcycle as a bicycle. If you're going to wear a headset, you should be proud of that weird thing on your head!

Apple is marketing the Vision Pro as a device you might wear for everyday purposes-to write e-mails or code, to make video calls, to watch football games. But I've always thought that V.R. sessions make the most sense either when they accomplish something specific and practical that doesn't take very long, or when they are as weird as possible.

The practical side of V.R. is a scattering of wonderful niches: in addition to surgical simulation and vehicle design, the technology is used by oil companies to simulate geological structures, by drug companies to envision molecules, and by planners working on city centers. The new frontier, which might apply more to everyday life, is the spontaneous creation of practical apps that you might not even bother to save. My research group, for instance, has presented a prototype system-the "mixed-reality copilot"-that allowed us to recreate, with a single voice request, a program that allows you to use your hands to paint and sculpt with virtual stuff. A decade ago, it took months to make that kind of program. Hopefully, in the near future, one will be able to ask for a V.R. relativity simulation tailored for a student who has color blindness and A.D.H.D., and it will simply appear. More prosaically, you might walk through a facility in augmented reality, asking an A.I. for instant advice about potential safety hazards and fixes. These ideas might even work already: one of the curious features of this accelerated period of A.I. development is that there aren't enough minutes in the day to try everything.

On the weird edge, it turns out you can change your body plan in V.R. You can become different animals. You can map your body to that of a lobster or an octopus, and experience, to a significant extent, the control of that other body. The brain has had to adapt to many body plans over the course of its evolution, and it's pre-adapted to work with more. When you change your body, you can also play with the flow of time. By shifting the rhythm of the natural sway of your limbs, and also how the objects around you move and change in response, you alter the reference points that your brain uses to mark the flow of time. You can speed it up or slow it down. In V.R., you can change the rules of the world. You can exist in strange geometries that are too hard to describe in words. You can become an archipelago of parts instead of a continuous animal. You can blend and share bodies with others, to a surprising degree.

All this can happen, and yet there's a little nub that remains unchanged. There's still a you floating in the middle of it all. This makes virtual reality a consciousness-noticing machine. Lately, people in A.I. have colonized the word "consciousness"; they sometimes suggest that their models have it. This can make us wonder if it's even real. But V.R. reminds us that experience really exists. It's at the core of V.R. It exists even when the world around it is an illusion.

There are fresh, urgent reasons to reaffirm the value of experience. It is impossible to judge technology without a sense of its purpose-and its only plausible purpose is to benefit people, or perhaps animals, or the over-all ecosystem of the planet. In any case, if we pursue technologies that make it hard to delineate the beneficiaries-for instance, by blending brains into robotics not to cure a disease but just because it seems cool-then we make the very idea of technology absurd. The central question of the technological future is how to identify the people who are supposed to benefit from technology, especially if they seem to have melted into it. If people aren't special, how can we act in a way that benefits people? We can't. The principles of ethics, design, and even technology itself become nonsense. What can that specialness be? It must be something that is not technologically accessible, since technology expands unpredictably. It's a little mystical. The definition of people must be one of apartness. We must now put people on pedestals, or they will drown.

When I put on a V.R. headset, I still notice that I am floating there, that I exist independently of the information I experience. But then there's the moment I take off the headset, which is the very best. In the nineteen-eighties, we used to try to sneak flowers or pretty crystals in front of people before they would take off their headsets; it was a great joy to see their expressions as they experienced awe. In a sense, this was like the awe someone might experience when appreciating a flower while on a psychedelic drug. But it was actually the opposite of that. They were perceiving the authentic ecstasy of the ordinary, anew.

This is the kind of experience you can have only if you use V.R. fleetingly, not constantly. Here we come to one of the greatest differences between what I love about virtual reality and how it is often promoted today. Venture capitalists and company-runners talk about how people will spend most of their time in V.R., the same way they spend lots of time on their phones. The motivation for imagining this future is clear; who wouldn't want to own the next iPhone-like platform? If people live their lives with headsets on, then whoever runs the V.R. platforms will control a gigantic, hyper-profitable empire.

But I don't think customers want that future. People can sense the looming absurdity of it, and see how it will lead them to lose their groundedness and meaning. In the early days of V.R., I actually tried living in it all the time; on a number of occasions, I stayed in virtual reality for several days. In fact, back at the start, some of my young colleagues and I made a vow: if we ever became parents-a possibility as remote for us at that time as a visit to Alpha Centauri-we would slip baby V.R. googles onto our kids at birth, then swap in bigger ones as the kids grew. That way, our kids could grow up in four dimensions, and become the greatest mathematicians ever. When I told my daughter about this, at around age eight, she was angry that I'd denied her this chance.

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Jaron Lanier on the Apple Vision Pro, a new V.R. headset, and the progression of technology for virtual, mixed, and augmented reality.

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technical leap forward w/ Digital Crown immersion level feature

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The Apple Vision Pro Is a Marvel. But Who Will Buy It?

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Parents, movie buffs and office workers might all succumb to the novelty of Apple’s new “spatial computing” device.

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visionOS Fashion App Demos:

mytheresa for destination shopping

J. Crew for curation / stylist shopping

high price point of $3,500 presents opportunity for luxury brands to target wealthy clients with dedicated virtual experiences for the Vision Pro - evolution of clienteling?

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It's too soon to say whether Apple's Vision Pro will become the next must-have device, but that isn't stopping fashion and beauty companies from diving in and creating apps for it.

The Vision Pro releases Friday at a cost of $3,499, and among those offering apps at launch are Mytheresa, J.Crew and E.l.f. Cosmetics. The companies all created their apps, which are free to download, in partnership with Obsess, a creator of virtual stores that said it's currently working with a number of other brands on dedicated apps for the Vision Pro.

The device is widely seen as a test of whether Apple can do for headset computers what it previously did for smartphones with its introduction of the iPhone in 2007. The product blends augmented and virtual reality, allowing users to layer digital objects over the physical world or inhabit a fully virtual space. Apple calls it "spatial computing." In January, pre-orders of the device sold out, with one analyst estimating total orders of 160,000 to 180,000, though demand could wane, the same person warned.

"This is a unique opportunity to be among the first movers," said Isabel May, Mytheresa's managing director and chief customer experience officer. "Also to show digital leadership in a device we think matters to our customers."

The luxury retailer's app transports users to immersive virtual locations such as a dazzling beach in Capri or Paris at night where they can get inspired and, of course, do some shopping. Many of its customers often shop with an occasion such as a trip in mind, according to May. The goal was to create an emotional experience they couldn't get from a standard e-commerce site.

"We pick, for example, Paris by night as an occasion because, when you experience it, you hear the whisper of French in the background, see the glittering Eiffel Tower, and that actually makes you feel, 'Of course, I need a dress to go with it,'" May said.

Customers are able to purchase directly in the Vision Pro app, though they'll need to pay using Apple Pay.

J.Crew's app introduces a virtual closet with a curated selection of products for users to explore. They can also mix and match pieces on a personal in-app mannequin, and chat with a company stylist or host a group call with friends to get opinions.

E.l.f.'s app offers features such as an interactive "Paint by Numbers" game, guided meditations and stretching exercises.

Apple said in a release that more than 600 native apps and games will be available for the Vision Pro to start, alongside more than 1 million apps for the iPhone and iPad that are compatible with its operating system, visionOS. In time, more fashion apps are likely to join that group. But developing a dedicated app requires technical resources and expertise, particularly when creating for VR and AR.

Neha Singh, founder and chief executive of Obsess, said the process is very different than creating an app for iPhone. You're building a complete environment that users interact with.

What's yet to be determined is how many customers will use these apps and actually shop through them. Early reviews of the Vision Pro have given high praise to its impressive technical achievements, but many have also questioned what, exactly, its purpose is. "The Apple Vision Pro Is a Marvel. But Who Will Buy It?" asked the headline of the New York Times' review. It makes for a compelling initial experience, but will users choose it over their laptop or phone month after month?

Whether the device is a success, brands want to make sure their apps are at least. Mytheresa spent a few months developing its app with Obsess, fixating on details such as the rim of an umbrella or the colour of the sea. Singh said a number of brands are also thinking about uses to appeal to their highest-spending customers, who - because of their wealth - are among those more likely to buy the Vision Pro.

"The whole reason why they're creating this experience is because they want to invite the customer into their world," Singh said. "[With Vision Pro] all of those details are now even more visible than how much you can see on your mobile phone and because the resolution is so high ... and that's part of the brand identity."

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Fashion Is Already Trying to Cash In on Apple's Vision Pro

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Mytheresa, J.Crew and E.l.f. Cosmetics are among the retailers to have developed apps for the newly launched 'spatial computing' headset as they try to leverage its capabilities for more immersive, emotional shopping experiences.

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ALYX Uses Blockchain to Combat Greenwashing

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ALYX Uses Blockchain to Combat Greenwashing

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Alyx is bringing greater transparency to its supply chain by adding nine of its items to blockchain ledgers.

Brands can use blockchain to cultivate deeper connections between consumers and the products they buy, and combat suspicions of greenwashing.

Smaller labels can experiment with the technology by working with off-the-shelf providers.

Chicago-born Matthew Williams first made a name for himself as Lady Gaga's creative director and a collaborator of Kanye West. In 2015, he founded 1017 Alyx 9SM, whose luxe take on streetwear, fetish and LA subcultures has earned him a regular place on the Paris Fashion Week calendar, a 2016 LVMH Prize finalist nomination, and collaborations with Moncler, Nike and Dior Men. Now, Williams is taking on supply chain transparency with a blockchain-powered pilot programme in partnership with Avery Dennison and Evrythng.

Some Alyx product hang tags will feature a scannable QR code that showcases the entire supply chain history of the piece it's attached to. That includes when and where the raw materials were sourced, where the garment was manufactured, and its shipping record. Alyx's suppliers enter the information, and Evrythng stores and uploads the data to the ledger while Avery Dennison makes tags with digital IDs for each garment. Nine Alyx pieces are included in the pilot, but Williams tells Vogue Business that he has the "north star goal" of putting all his products on the blockchain for the sake of transparency.

Fashion is increasingly experimenting with the technology. Last month, LVMH revealed plans for an anti-counterfeiting app based on blockchain that would let brands verify the authenticity of their goods, starting with Louis Vuitton and Parfums Christian Dior. Farfetch is also launching a blockchain platform in collaboration with Facebook in early 2020.

Start small

One of the major obstacles preventing Alyx from putting all its products on a blockchain ledger was the time and effort required to input data at each stage of the process. Unlike consumer technology, for example, fashion poses unique challenges when it comes to traceability. A brand might produce a jacket with 10 components (buckles, panels, lining) each sourced from different raw materials and produced by a different manufacturer before being assembled. The following season, that brand could introduce an entirely new style of jacket that uses different textiles, suppliers and manufacturers.

The barrier to entry was relatively low for Alyx, which is only four years old and produces 80 per cent of its products in Italy with suppliers who take transparency seriously, Williams says. That's important because Alyx ultimately depends on its suppliers to enter data accurately into the record.

The next step might be automating the process so it can be scaled. "The key is identifying the right nodes of the supply chain from where to pull data and then determining how to most efficiently extract that data," says Michael Colarossi, Avery Dennison's vice president of apparel innovation, product line management and sustainability, adding that future integration could mean extracting data directly from manufacturing systems.

Have a clear purpose in mind

Sustainable technology has been part of the Alyx story from the get-go, which makes its blockchain pilot a natural next step. "That's what we want to continue to communicate, and that's what brings value to our pieces," he says. "It becomes a really great storytelling element."

It also brings credibility. Blockchain is a data ledger that is both decentralised and immutable, meaning it is nearly impossible for one person or company to change the data once entered. This means sourcing information can be fed into the blockchain without a brand being able to manipulate it later on. Thus, blockchain programmes like these can prove to consumers that a brand isn't greenwashing its products. "Adding this blockchain layer means it is much harder for brands to cheat. It's about bringing trust back," says Dominique Guinard, founder and chief technology officer at Evrythng.

Hopefully, it will also persuade customers to hold on to items longer. "When you scan the digital identity of an item and have a good, compelling experience, you might understand more about its story," says Guinard. "You might be a bit more attached to it and a bit less into fast fashion."

Find the right partners

While the likes of LVMH and Farfetch have significant in-house resources, off-the-shelf providers can make blockchain tagging a reality for smaller companies. While the Alyx pilot took more than six months to execute, Avery Dennison says that standard programs can be deployed more quickly than more customised or complex projects. Evrythng has plug-and-play technology for data input, as the scan process is supported by any smartphone.

The price of such initiatives varies widely, which is why smaller brands should shop around. Some ledgers charge transaction fees at different stages of the process - costs that "could kill a project", says Guinard - but there are alternatives like the IOTA blockchain that Alyx chose, which is free and says it has no scaling limitations.

While there are initial costs of hiring Avery Dennison and Evrythng to create a unique digital ID, the price then escalates according to the number of times a brand posts to the blockchain, the complexity of its supply chain and the amount of data uploaded, says Colarossi.

Is it worth all the effort? The collapse in the value of bitcoin - which is the most public face of blockchain and only recently started recovering - hasn't helped. But Deloitte, which has done extensive surveys on blockchain technology, says that many of its clients are "making meaningful investments in the present day, starting new businesses based on the unique value proposition offered by blockchain and tokens."

Williams says that's all normal for a technology in its infancy. "It doesn't seem so much of a fad to me, it's just whether this version is the version that works or not," he says. "In the future, a lot of this stuff around sustainability will be mandated. If people aren't exploring this type of thing now, they will be left behind."
To receive the Vogue Business Technology Edit, sign up here. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More on this topic: 6 ways blockchain is changing luxury Farfetch partners with Facebook on global blockchain network The 'buy local' movement comes to fashion

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Matthew Williams is using blockchain to tell Alyx's story

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Alyx is bringing greater transparency to its supply chain by adding nine of its items to blockchain ledgers. Brands can use blockchain to cultivate deeper connections between consumers and the products they buy, and combat suspicions of greenwashing. Smaller labels can experiment with the technology by working with off-the-shelf providers.

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supply chain traceability software.

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Future Predictions of Blockchain's Role In Fashion Within the Next Decade

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Future Predictions of Blockchain's Role In Fashion Within the Next Decade

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discuss:

where blockchain could go

limitations of blockchain

public vs private adoption cases

industry-wide adoption by law

250 words.

1. Barriers to Entry (McKinsey adoption graphic plus adoption challenges) -- link to P2 with a sentence about how those challenges need to be overcome in a timely manner as EU Law will take effect by 2026-27.

2. DPP Law (expedite industry-wide adoption) & The Client of Tomorrow (BoF article)** - link to BCG graphic in Appendix to illustrate value proposition of DPPs!

3. Roadmap for DPP Compliance (Forbes article) - only include if word count available.

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BoF-McKinsey State of Fashion Tech 2022 Report

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highlight the market value growth of blockchain and contrast with the very low adoption rate by the fashion industry - critical analysis of why!

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read 'Creating a Workable Technology' section on limitations of blockchain and why some companies would avoid it:

data privacy

competitive insight leaks

viability of a decentralised public blockchain vs. private blockchains (alterable?)

mention AURAs use of private blockchains to improve security.

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One of the most promising applications of emerging blockchain technology is supply chain management. Blockchain-the digital record-keeping system developed for cryptocurrency networks-can help supply chain partners with some of their challenges by creating a complete, transparent, tamperproof history of the information flows, inventory flows, and financial flows in transactions.

The authors studied seven large U.S. corporations that are exploring how blockchain might improve their supply chain operations. Their early initiatives show that the technology can enable faster and more cost-efficient product delivery, make products more traceable, streamline the financing process, and enhance coordination among buyers, suppliers, and banks.

There are special requirements for using blockchain in supply chain management: restricting participation to known, trusted partners; adopting a new consensus protocol; and taking steps to keep errors and counterfeits out of the supply chain. But if implemented thoughtfully, the authors suggest, blockchain could pay big dividends for companies in a host of industries.

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One of the most promising applications of emerging blockchain technology is supply chain management. Blockchain-the digital record-keeping system developed for cryptocurrency networks-can help supply chain partners with some of their challenges by creating a complete, transparent, tamperproof history of the information flows, inventory flows, and financial flows in transactions.

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list of disadvantages

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Fashion has been eyeing blockchain to trace its notoriously opaque supply chain for years. The technology has yet to be widely adopted, in part because it isn't easy to implement. It requires information and participation from all the suppliers along the chain, from cut-and-sew factories to fabric weavers, yarn spinners, ginning mills, and even farmers.

Lately, though, disruptions from the pandemic to geopolitical events have made visibility all the way down the supply chain a top priority for brands and retailers, adding to pressure they already faced from consumers and watchdogs to be more transparent. It's helped drive momentum around blockchain projects. In recent months, groups such as the UK Fashion & Textile Association (UKFT) and companies such as H&M have launched new pilot programmes to track their supply chains with blockchain.

"To be totally frank, it was the dual onslaughts of Brexit and Covid, and the impact that had on supply chains," said Adam Mansell, chief executive of UKFT, which announced a tracing pilot with IBM and others including Next and H&M's COS brand in August.

Government regulations are contributing too. This year, the US banned imports of products made with cotton from China's Xinjiang region, where researchers and authorities say Uighurs and other Muslim groups have been pressed into forced labour. (China denies the claims.) Germany adopted a law scheduled to take effect in 2023 mandating large companies perform due diligence to ensure their supply chains comply with social and environmental standards.

To be totally frank, it was the dual onslaughts of Brexit and Covid, and the impact that had on supply chains.

These sorts of developments have drawn "attention at the very highest level around, 'How do I manage the risk in my supply chain?' - the material risk - and that immediately brings you into the traceability topic," said Amit Gautam, founder and CEO of TextileGenesis, a blockchain-based tracing platform for fashion.

The company is H&M's partner for its new tracing efforts, and has teamed on separate pilots with the US Cotton Trust Protocol, a cotton sustainability group that counts Gap and Levi's as members, and with Kering and Bestseller on a viscose tracing project.

For brands and retailers feeling pressure to be more transparent about where they get their goods, the appeal of blockchain is clear: In theory, it provides a verified record of a garment's history at each step of its production, something companies haven't historically had much visibility into, and because of its decentralised architecture, that record would be tamper-proof.

But blockchain isn't a silver-bullet solution. Companies still face the challenge of making sure the data they're getting from suppliers is accurate.

"The issue is still that first part: How do you get the information and verify the information that's coming into that blockchain system?" said Nate Herman, senior vice president of policy at the American Apparel & Footwear Association. "In the last two years there's been a dramatic increase in efforts to do that."
Pressure To Know the Chain
UKFT's traceability project is funded by a research grant from the UK government. Other partners include Future Fashion Factory, which supports innovation in the UK garment sector, and Tech Data, a technology firm.

"There is definitely an economic driver to this," Mansell said.

After Brexit, sourcing from Europe immediately became more challenging, and then the pandemic threw global supply chains into disarray. Companies realised they needed a much sharper understanding of where their materials came from.

The aim of IBM's and other blockchain projects is to capture information around each step as it happens, as opposed to fashion's historical method of tracing, which has been to start with a finished item and try to follow it backward. But "fibre-forward" tracking is tricky. Companies often only have contact with the factories that sew their garments and maybe fabric suppliers.

Keric Morris, who heads up standards for IBM's strategy business and is involved in the UKFT project, said they're collecting data from invoices created at each step of the chain and other information, stretching back to the farm level. They can't always identify the specific farm the cotton in a product originated from, since batches of cotton are often mixed together when they're processed, but they can identify the area or even group of farms it came from.

To start, the pilot is focusing solely on cotton products, which entails onboarding suppliers in countries including Bangladesh, India, Turkey, and Portugal.

"What makes it slightly different from other projects is that we are very much trying to build it so that the platform is available for everyone," Mansell said.

The scope of TextileGenesis's work is narrower. It focuses specifically on tracing what Gautam calls sustainable, differentiated materials, such as organic cotton as opposed to commodity cotton, or recycled polyester versus virgin polyester. It does it using a digital token it calls a Fibercoin.

"It's a digitisation of the physical volume, so if 100 kilograms of Tencel are shipped to a spinner, then the spinner's account on our system receives 100 kilograms of inventory," Gautam said. "When that fibre is converted into yarn, yarn to fabric, fabric to garment, we transfer those tokens along the chain at article level."

H&M has " several scaled pilots " set to launch with the company throughout the year. An H&M spokesperson said in an email its partnership with TextileGenesis enabled it to improve its supply chain's traceability and transparency.
Cost-Benefit Analysis
One challenge for companies is ensuring the information logged on the blockchain is accurate. Many are having to use other tools, such as forensic verifications that test genetic or chemical markers in material fibres, to confirm suppliers are entering data truthfully.

Another is cost. There's a reason TextileGenesis focuses on fibres such as organic cotton.

"Commodity material has very little value, and very little value from a traceability perspective," Gautam said. "There's always a certain amount of effort, investment required to deliver traceability, and if it's commodity product, how do you capture that value across the supply chain?"

There's always a certain amount of effort, investment required to deliver traceability.

Commodity material describes the vast majority of fabric used to make clothing, and its supply chain tends to be more fragmented, making it more difficult to trace. Some of the costs involved would likely have to be passed onto shoppers.

"The first and foremost resistance I see is from the consumer," said Tarun Kumar Agrawal, a production logistics researcher at KTH Royal Institute of Technology in Sweden who has studied blockchain's use to trace the apparel supply chain. "Are consumers really interested in paying a premium if they get to know about all the history of the product? There is a major segment of consumers who still believe in price over sustainability."

He predicted many big brands will adopt blockchain, but how it develops further could depend on what return they see on their spending. Brands could release tracked-and-traced product lines, much like the "sustainable" collections that exist.

Gautam forecast an even greater split. In his view, the top 100 or so fashion brands will trace most of their products in the coming years. "The rest of the apparel retail market, which is a lot of domestic retailers, let's say in parts of Asia or parts even of Europe, which is lower value retail, would continue to be generic, would continue to be commodity product, and largely not traceable," he said.
Related Articles: Is Forced Uighur Labour in Your Supply Chain? How Fashion Can Tackle Its Supply Chain Crisis How Luxury Fashion Learned to Love the Blockchain

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Is Fashion Ready to Put Its Supply Chain on the Blockchain?

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Fashion has been eyeing blockchain to trace its notoriously opaque supply chain for years. The technology has yet to be widely adopted, in part because it isn't easy to implement. It requires information and participation from all the suppliers along the chain, from cut-and-sew factories to fabric weavers, yarn spinners, ginning mills, and even farmers.

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Industry Insiders' Opinions on Blockchain

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Industry Insiders' Opinions on Blockchain

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disadvantages from a data privacy and global adoption perspective (lack of a unified global governance)

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Understanding the Potential of Digital Product Passports

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New regulations from the European Commission will require fashion and other consumer goods to be fitted with unique digital product passports as early as 2026. At BoF's VOICES 2023, the CEO of Arianee demystifies the future of digital product passports and their ability to reimagine fashion brands' revenue stream.

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TrusTrace Co-Founder On How to Prepare for EU DPP Law

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TrusTrace Co-Founder On How to Prepare for EU DPP Law

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roadmap for brands to implement the infrastructure for regulatory compliance: 4 steps.

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Council Post: Digital Product Passports Are Coming: Here’s How Fashion Companies Can Prepare

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The sooner brands implement the necessary traceability infrastructure and the more granular the data it produces, the better position they will be in for DPP compliance.

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Alo Yoga & J. Crew visionOS APPS

Role of Obsess for Virtual Fashion Stores

Early Adopters Gain First-Mover Advantage Before Headsets Become Democratised

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Following the launch of Apple's Vision Pro headset, a handful of popular brands have announced the release of dedicated apps to offer immersive experiences for users, with shopping being the clear end-goal. The mixed-reality headset has already attracted attention and hopes to entice more than just gamers, but can it actually become a new sales and marketing channel for retailers? Here are different ways fashion, beauty and lifestyle brands are attempting to leverage the platform to attract consumers:

Alo Yoga's Wellness Experience On Apple Vision Pro

The athleisure and lifestyle brand launched "Alo sanctuary", a wellness-first immersive experience that blends self-care and shopping thanks to an app developed in partnership with Obsess, a leading immersive shopping platform that has developed virtual stores for brands like Crate & Barrel, Coach, Armani, Charlotte Tilburry and many more. The alo app offers different environments that immerse users in nature and lets them enjoy a range of meditations, before being presented with new products from the brand. The app's main objective is to deliver a realistic, immersive brand experience that embodies Alo's ecosystem, while effectively showcasing its products and encouraging purchase.

"The visual fidelity of the Alo app experience in visionOS is remarkable, with scenes so realistic that users feel as if they're being transported into an outdoor shopping environment," said Neha Singh, CEO and Founder of Obsess in a press release. "Shoppers can even interact with products as if they were in a physical space. They can bring them close enough to clearly see the weave and texture of an item, and get so granular as to see the difference between one spandex type versus another."

E.l.f Cosmetics Dives Into Gaming

One of the first beauty brands to launch on Apple's Vision Pro, elf cosmetics brings to life "your best e.l.f", an app blending gaming and discovery through playful environments that dive users into the world of the cosmetic brand.

This brand' approach is centered on a gaming-like experience, providing a multi-sensory platform that feels playful thanks to a few branded games, but also encourages enjoyment and relaxation through exercises of the body and mind. Of course, products are displayed throughout and can be purchased via Apple Pay.

"We know that emotional connection plays a large role in consumer decision-making, and that's the intention behind the e.l.f. app for Apple Vision Pro," shared Singh in another statement. The your best e.l.f.' is a space where the e.l.f. community can indulge in a deeper relationship with the brand through immersive exploration and branded games. Offering users an entirely new way to engage with the brand, the app paves the way for a new era of spatial shopping and immersive storytelling for beauty."

J. Crew Brings Virtual Closet Experience To Life

Similar to Alo's app, the one imagined by fashion brand J.Crew showcases new clothing in a remarkably realistic, 3D environment that makes product discovery extremely straightforward and engaging. Also developed by Obsess, this app is here focused exclusively on shopping, with a mannequin displayed in different clothes and styles, and that can be set up in different real-life settings for a realistic experience. The virtual closet allows for the most optimal product discovery ever imagined virtually, thanks to technology providing a high magnification on texture, color and material, which makes it easier than ever for consumers to get a good understanding of the garment. Styling is the core activity of the app, with users able to mix-and-match and style the mannequin to their liking, while also being able to chat with J.Crew stylists and host in-app group calls to get friendly advice on outfits. The immersive shopping experience is probably the most realistic, convenient and personalized one offered on a platform before, definitely setting the tone for what the future of shopping could look like.

While engaging in mixed-reality brand experiences will likely become more common in the near future, whether or not consumers adopt this technology and decide to use it as a shopping channel at this time remains to be seen. Is there enough of an addressable market to developing these shopping apps at the moment? The fact is, it does not really matter: the brands testing out this new type of brand platform are early adopters of a technology that will democratize itself in the future as headsets become more versatile and affordable as they innovate, and therefore have first-mover advantage when this happens. Obsess has been at the forefront of developing virtual store experiences for some of the most well-known luxury, lifestyle and fashion brands, and given the rise in these type of activations, can testify to a nascent channel that brands will have to address at one point.

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A First Look Into Brands' Shopping Experiences on Apple's Vision Pro

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Following the launch of Apple's Vision Pro headset, a handful of popular brands have announced the release of dedicated apps to offer immersive shopping experiences.

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The EU Digital Product Passport Regulation by 2027

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The EU Digital Product Passport Regulation by 2027

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read “Enabling circularity through transparency: Introducing the EU Digital Product Passport,” report

all brands will potentially be legally bound to use blockchain by 2027!

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World Business Council for Sustainable Development (WBCSD)

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The EU Digital Product Passport - World Business Council for Sustainable Development (WBCSD)

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WBCSD is a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world.

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Mytheresa, J. Crew & Alo Yoga - visionOS demos

2024 as the year of experimentation with spatial retail experiences

J. Crew stands out with its most advanced approach to virtual clienteling yet - the use of SharePlay to connect with stylists, personal shoppers and SAs

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This is what shopping looks like on Apple’s new mixed-reality headset

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The anticipated Apple Vision Pro comes with immersive shopping apps from brands including Mytheresa, J.Crew, Alo and Elf.

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Apple Vision Pro - Fashion's VR Breakthrough

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Apple Vision Pro - Fashion's VR Breakthrough

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SharePlay as the key feature of the Vision Pro

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After breaking headlines last June, Apple's highly anticipated - and inexorably memeified - Vision Pro headset was finally released to the public on February 2.

Featuring over a dozen cameras, augmented reality (AR) content, and artificial intelligence-powered eye and gesture tracking for navigation and control, the wearable rivals Meta's Quest headset with its technological capabilities.

But the function that tech evangelists are most enraptured by is the gadget's virtual reality (VR) content. Unlike AR, the VR option isolates wearers from their surroundings, offering full digital immersion via the headset's screens. Users can flip between the "real" and the "immersive" by using a dial, coined the Digital Crown.

Early adopters have preached the potential of VR since its entry into mainstream consciousness in 2014, a watershed year when Facebook bought VR pioneer Oculus for $2 billion. Despite a maelstrom of hot takes on how the tech will revolutionize consumer experiences, the fashion, beauty and luxury industry remains unconvinced.

But will the Vision Pro change that? VR-powered activations have been few and far between across the luxury realm, with most failing to move the needle. Sartorial disconnects, like clunky headsets, have also caused a chasm between the technology and style-conscious fashion enthusiasts.

Dr Helen Papagiannis, an immersive tech consultant and advisor, thinks the Vision Pro is the start of a new era for luxury and VR, even with its polarizing design.

"Apple Vision Pro has a unique offering with the ability to dial reality up and down, ranging from fully immersive environments to being able to interact with digital objects in your physical space," Papagiannis says. "This gives luxury brands a broad playground to explore, and is something I'm currently advising my luxury clients on how they can best create experiences for their customers."

Papagiannis has been advising luxury brands on how to implement VR into their innovation roadmap; she says that, in the same way AR has gained traction, VR is the next technology to be widely adopted by brands.

A number of retailers have already joined the VR race. The first iteration of the Vision Pro features over 600 different apps for users to browse, including a selection of shopping experiences from early adopters including J.Crew, Decathlon, Elf, Alo, and MyTheresa.

In MyTheresa's exclusive hub, consumers can browse pieces from the sun-soaked setting of a Capri beach, or from the heart of luxury hotspot Paris. In Alo's realm, spatial audio is used to immerse shoppers in various meditation scenes, including mountaintops and the jungle.

J.Crew has deployed one of Apple's new tools, coined SharePlay, for its experience. The function gives consumers the option to socialize within the space via FaceTime, allowing the digital retail process to become a shared moment among friends and stylists.

Through innovative concepts like SharePlay, Papagiannis is optimistic that VR will usher in a completely new mode of shopping for consumers. "This is absolutely the next frontier for brands," she says.

MyTheresa's virtual store designed exclusively for the Vision Pro. Photo: Obsess

Unsurprisingly, style enthusiasts remain reluctant to purchase Apple's "space goggles." What other ways can brands prime consumers for the virtual reality retail revolution?

Developers like Xydrobe are trying to sway shoppers by introducing VR into traditional physical spaces in lieu of fancy wearables. Last November, the company invited a number of London's most elite fashion insiders, including Camille Charriere and Pixie Geldof, to Mayfair to explore its immersive "wellness pod," in collaboration with beauty guru Dr Barbara Sturm. The 50-minute VR-powered experience included breathing exercises, meditation, and full-body red light therapy.

Xydrobe markets itself as a creator of luxury VR destinations, deploying the tech in a way that resonates with luxury's first-class clientele.

Luxury's top dogs are also slowly starting to test the waters.

"Last month, Louis Vuitton made its 'Asnières Immersive' VR experience available in the Champs Elysées store for customers to preview and be transported into the history of the brand," says Papagiannis. "Hermès is another luxury brand that has used this technology in store with a VR experience, where you can magically fly on a winged horse."

xydrobe x Dr Barbara Sturm's VR powered pod appealed to fashion enthusiasts. Photo: xydrobe

A lot hangs on the Vision Pro's success. This week, Apple forecasted a decline in iPhone sales and a revenue target $6 billion below Wall Street's expectations, primarily due to challenges in its China business.

While fiscal first-quarter sales and profits exceeded analysts' expectations, driven by iPhone growth, Apple's latest projections caused the company's share price to drop 3 percent in after-hours trading. Declining iPhone sales in China (revenue tumbled 13 percent during the quarter ending in December to $20.8 billion, missing estimates of $23.5 billion) is reported to be the result of intensifying competition from Huawei, plus the rising popularity of foldable phones across the mainland.

Meanwhile, demand for Vision Pro headsets in China spiked last month, with US merchants offering to ship the gadget to the mainland for over double the recommended retail price. The next target of China's $81 billion daigou gray market, overseas resellers are gearing up to benefit from the country's swelling appetite for VR-enabled products, propelled by new releases like the Vision Pro.

With virtual reality on its way to becoming readily available both inside and outside of the home, 2024 could see the technology breakthrough. The launch of the Vision Pro looks only to be the beginning.

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Will Apple's Vision Pro spur luxury's virtual reality breakthrough?

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Apple's widely anticipated Vision Pro has spurred a virtual reality comeback. The question is whether luxury brands are ready, and whether consumers will bite?

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Luxus Plus - Mytheresa Vision Pro Optimisation

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Luxus Plus - Mytheresa Vision Pro Optimisation

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Gen-Z will represent 30% of luxury sales by 2030 - digital engagement is crucial.

Vision Pro especially important for luxury sector due to premium price point of the headset, mostly HNWIs have access.

Mytheresa pioneers the luxury e-commerce experience in virtual reality.

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Virtual luxury shopping: Mytheresa launches its app for Apple's Vision Pro headset - Luxus Plus

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The release of the Apple Vision Pro on February 2nd, coincided with the launch of Mytheresa's immersive shopping application.

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The Complete Playbook to Gen AI In Fashion

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The Complete Playbook to Gen AI In Fashion

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Gen AI Fashion Use Cases with Examples:

Design (Revolve x Maison Meta)

Marketing (Casablanca)

Customer Service (KNXT by Kering)

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In 2018, an artist named Robbie Barrat conceived an entire fashion collection in the style of Balenciaga using artificial intelligence. Barrat had to train his own AI model on images of existing looks he gathered himself, and the output wasn't perfect. Much of it appeared smudged and distorted. But it was enough to capture fashion's attention, landing him an interview with Ssense and a collaboration with Acne Studios.

Just a few years later, anyone with a computer can essentially create a collection - with less work and more photorealistic results than Barrat's earlier attempt - using new generative-AI tools.

Generative AI, which describes machine learning algorithms capable of creating new content, is set to have a major impact on fashion brands. Trained on a sufficient number of examples, these algorithms recognise the underlying patterns and structures in data and create novel examples of their own. Some tools, such as DALL-E 2, Midjourney and Stable Diffusion, can produce images. Others, such as ChatGPT, can generate text. Still others are capable of making videos, like Runway. But all are able to create their content from text prompts, promising a wide array of uses.

Though generative AI grabbed attention with the deluge of user-generated memes it unleashed online, like a video reimagining the Harry Potter movies in the style of Balenciaga, its greatest impact could be on businesses. Tech giants such as Microsoft and Google are racing to incorporate it into their core products, while industries from healthcare to finance are looking for ways to use it to lift labour productivity and a wave of start-ups are building enterprise applications. Goldman Sachs analysts estimate that, once generative AI is widely adopted, it could boost US productivity by 1.5 percentage points per year for a decade, ultimately increasing S&P 500 profits 30 percent or more over that period.

Fashion is set to experience generative AI-influenced growth of its own. While the industry is just starting to explore the technology's potential, McKinsey & Company estimates that in the next three to five years it could add between $150 billion and $275 billion to the operating profits of the apparel, fashion and luxury sectors. It is already beginning to shake up areas such as design, marketing and customer service.

As various parts of the fashion industry value chain test and adopt the technology, this case study explores the opportunities, challenges and risks for both brands and their employees. However, the field is changing rapidly and use cases were a work in progress as we conducted our research and interviews in spring 2023. That said, four key strategic areas have already emerged for fashion, enabling this case study to showcase the state of play in product design, visual content creation, copywriting, and shopping and customer experience. To help build out the knowledge provided in this case study, brands and retailers such as Revolve, Casablanca Paris, Frame, Snipes, Levi's and Zalando; technology providers such as Salesforce, Amazon and Shopify; and other AI-focused experts share real examples of putting this emerging technology to use and what they have been learning in the process.

Glossary

Artificial intelligence (AI): Technology such as a computer program that mimics the human brain's ability to perform tasks and learn and improve over time.

Deep learning: A form of neural network involving more than three node layers. These algorithms are more effective at processing and understanding unstructured data.

Diffusion model: A type of generative model trained by adding "noise" to a set of training data and then reversing the process to reconstruct the data. It can use random noise to create new data by repeating the "denoising" process.

Generative Adversarial Network (GAN): A type of generative model capable of producing realistic imagery by employing two neural networks, a generator and a discriminator. The generator creates new content and the discriminator tries to distinguish if it's real or fake. As each improves, the output becomes increasingly more difficult to identify as false.

Generative AI: Deep learning algorithms that with sufficient examples of something can recognise the underlying patterns and structures in the data and produce new iterations, including text, imagery, video and more.

Machine learning (ML): A branch of AI that involves algorithms which are able to identify patterns in data and learn from them without being explicitly programmed.

Neural network: A form of ML that uses a set of interconnected algorithms structured in various node layers imitating the workings of the human brain.

Transformer: A neural network that uses sequences of data, like words in a sentence, to identify relationships between data points that may be far apart from one another, allowing it to understand context and predict new sequences. Many language models like OpenAI's GPT models (GPT stands for "generative pre-trained transformer") are transformers trained on giant amounts of data.

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Case Study | The Complete Playbook for Generative AI in Fashion

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From ChatGPT to Midjourney to Runway, the emerging technology is already showing why it could be one of the most consequential in decades for the fashion industry. Early adopters and experts unpack the opportunities and challenges of putting gen AI to use to design products, create campaigns and other content, and better connect with customers.

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SS24 - Collina Strada Uses AI for Design

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SS24 - Collina Strada Uses AI for Design

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first designer label to use AI on the runway

use as the example for AI Design!

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Why Collina Strada's Hillary Taymour Thinks Generative AI Is a 'Game Changer'

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The buzzy brand, which used the technology to help design the collection it showed at New York Fashion Week, appears to be the first to use it to create physical runway looks, or at least the first to acknowledge it.

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The Development of Gen AI In Fashion for Authentication

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The Development of Gen AI In Fashion for Authentication

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discuss:

address the rise of VINTAGE luxury fashion and resale markets to satisfy Gen Z consumer demands + limitations of blockchain technology for verification - does not cover VINTAGE luxury pieces

standard luxury authentication processes w/ example (Vestiaire, etc.) and limitations...

... how does this give rise to Gen AI to remove human error from authentication processes so consumers could purchase pre-loved pieces with confidence?

industry example / start-up / case study of Gen AI authenticator and its benefits to luxury resale (Entrupy?)

structure:

Section Intro // Rise of VINTAGE Luxury Fashion & Gen Z Consumer Demand

The World of Luxury Authentication w/ Top Players and Methods + Flaws of Current Model - Intro to Gen AI

Entrupy Case Study - highlight the need for this technology to act alongside human experts (just like Emergence section where AI AUGMENTS luxury)

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Gen Z consumer demand for archival fashion

vintage luxury is favourable to this demo because of affordability and nostalgia as key motivators

main challenge to businesses is the counterfeit landscape, especially for vintage goods

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Meet the young entrepreneurs making thousands from archival luxury

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As young consumers increasingly seek archive and vintage luxury, a new wave of entrepreneurs have developed growing businesses from sourcing and reselling rare garments and accessories online.

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demand for pre-loved luxury is lower in Asia due to rife counterfeit industry - puts shoppers off

digital triggers like DPPs may provide irrefutable evidence of product provenance but is not applicable to vintage luxury items - source and lifecycle are untraceable

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How Luxury Brands Can Beat Counterfeiters

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How Luxury Brands Can Beat Counterfeiters

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counterfeits plague the luxury industry

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For years, the luxury industry has waged a battle against counterfeiters. It has invested heavily in ultra-sophisticated tech solutions which use the latest advances in nanotechnology, internet of things (IoT), and AI to authenticate products. It lobbies governments to extend enforcement bodies' powers to seize and destroy fake goods, to prosecute buyers and dealers, and to block access to websites that sell counterfeit goods. And then there are the lawyers: LVMH alone employs at least 60 lawyers and spends $17 million annually on anti-counterfeiting legal action.

These efforts are not paying off. The total trade in fakes is estimated at around $4.5 trillion, and fake luxury merchandise accounts for 60% to 70% of that amount, ahead of pharmaceuticals and entertainment products and representing perhaps a quarter of the estimated $1.2 trillion total trade in luxury goods. Digital plays a big role in this and perhaps 40% of the sales in luxury fakes take place online, as today's counterfeiters milk the ubiquity and anonymity of the internet space to the last drop. For every e-commerce platform like Alibaba that cracks down on fakes, a new one emerges that allows goods to be shipped directly from manufacturers.

So what should luxury goods companies be doing instead?

To answer that question, we interviewed 32 professionals across four panels: luxury executives, representatives of luxury industry associations, experts on anti-counterfeiting from academia and the public sector, and executives from the music and pharmaceuticals industries, which have been more successful than luxury goods firms in fighting against counterfeiting.

What we hear suggests that luxury firms' failure to contain the growth in counterfeiting is rooted in a hollowing out of their brands. Many luxury brands have become symbols of status and privilege but not much else. The emphasis across the industry has been on signaling rather than delivering luxury; intangible over tangible product attributes; and the logo over all other markers of quality.

This philosophy has been consistently applied to supply chains, manufacturing, and pricing: By relocating production to low-cost countries, luxury firms severed the centuries-old association of luxury goods with their historical places of origin. The outsourcing also led to relaxed control over supply chain, design ,and manufacturing just as counterfeiters were putting unprecedented pressure on each of these processes.

At the same time, in spite of the cost savings, luxury products' sticker prices have risen dramatically. At first, the idea was to cushion the impact of the growing traffic of Chinese tourists buying abroad and reselling at home. But the hikes escalated rapidly and by 2014, a Chanel handbag cost 70% more than it had just five years earlier. Other brands followed suit, raising prices at more than twice the rate of the mainstream market. Buoyed by initial success of this pricing strategy, many firms also phased out their more affordable, entry-level brands. Case in point: Dolce & Gabbana in 2012 discontinued its profitable but less expensive D&G brand.

As a result of these developments, luxury brands have become disconnected from their physical products, which reduces customer concerns about buying fakes. Does spending $2,500 on a branded good made in China look smart when you can get a made-in-China fake version (possibly from the branded company's supplier) that looks pretty much the same? The anonymity of the new digital distribution networks for fakes only makes the decision easier.

This suggests that luxury sector's solution to the counterfeiting challenge lies less in fighting counterfeiters and more in rediscovering what made the brands great in the first place.
Coming Home
To begin with, luxury companies need to reconnect with their roots. Much of luxury brands' authenticity comes from their roots in, and intimate links with, a particular country or region. Healthy, authentic brands have celebrated and romanticized these links. They have actively taken up the mantle of stewards and local community leaders. More recently, striving to make counterfeiting socially unacceptable has led luxury firms to start thinking about what they stand for.

Family firms are particularly good at communicating how they align their internal ethos with external values. Take the case of Italian cashmere and luxury sportswear maker Brunello Cucinelli, with 2017 sales of over $600 million. Launched in the 1970s as a one-man operation, it now employs 500 staff in historic home of Solomeo near Perugia. Run with a management style of "radical kindness" to employees, the company is devoted to the renovation and cultural preservation of the local community. In addition to refurbishing the town's infrastructure and heritage monuments, the company has set up a free school to teach traditional skills, including tailoring. The long-standing commitment to its home region and its people is what underpins the founder's vision of a "humanistic enterprise" and humanistic modern capitalism.

There are tangible advantages in reshoring as well. If they bring manufacturing back to their home countries where stricter controls are easier to implement, Louis Vuitton, Gucci, and Burberry can better control supply and distribution issues that have facilitated counterfeiters. They can, for example, more easily prevent factory overruns, where offshore suppliers manufacture more goods than a brand has commissioned, and then distribute the surplus products through alternative distribution channels directly to customers.
Going Beyond the Logo
At a time when weekend markets all over the world are awash with luxury logos printed on cheap T-shirts and shopping bags, it may be hard to believe that the original Chanel 2.55 flap bag sported no logo at all. It was the quilted stich and the diamond or herringbone pattern that said "Chanel." Yet for 60 years, the bag has been considered timeless and essential. Similarly, Max Mara's wool-and-cashmere 101801 Icon coat remains a logo-less classic that has hardly ever been copied.

There's a message here: logos are easy to knock off, but good craftsmanship isn't. To make fakes less attractive to consumers, luxury firms will need to emphasize a style and quality that is tough to replicate and is independent of the logo. Emphasizing traditional craftsmanship, handmade components, and heritage techniques is a powerful way of infusing a brand with authenticity.

LVMH is one brand that has been going down this route. In October 2018, it held the fourth edition of its series of open-door events known as Les Journées Particulières. Launched in 2011, this initiative showcases LVMH's architectural and cultural heritage alongside the savoir-faire, creativity and artisanal excellence of its "Houses." The group i nvited the public to 77 locales across 14 countries and five continents. They included workshops, wine cellars, private mansions, family homes, historic stores and other venues, half of which were previously closed to the public. A total of 180,000 visitors attended talks, masterclasses, practical demonstrations, and flash-mob gatherings.
Revisiting the Customer Connection
It's also high time for many luxury goods companies to reboot their assumptions about customers, because their customers are evolving. Increasingly the new rich of today are Millennials, and their ethics and tastes are rather different from those of their parents. There is shift in emphasis to experience, sustainability, and sharing from products, consumption, and exclusivity.

Some luxury brands are changing their strategies accordingly. Kering, the group owner of Gucci, Balenciaga, and Yves Saint Laurent, has been steadily raising the proportion of renewable raw materials in its products, from biodegradable glitter to fabrics made from seaweed and orange fibers. Its eyewear division, for example, has partnered with an Italian bioplastics firm to create a range of biodegradable frames. The group has also introduced " environmental P&L" into its business model, signaling an industry-wide shift in practice. The response from consumers has been favorable: Yves Saint Laurent, for example, now does 65% of their business with Millennials.

Post-sale services such as alterations, maintenance and repair, as well as the booming trade in "pre-owned" luxury items, are all promising areas for luxury goods companies to explore. An early pioneer in this respect is Audemars Piguet, which in 2018 announced plans to launch a second-hand watch business. If executed properly, this kind of strategic move can help a luxury firm take control over its products throughout their lifecycles. It can also change the economics of buying a fake by offering consumers more affordable but still genuine options.

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How Luxury Brands Can Beat Counterfeiters

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For years, the luxury industry has waged a battle against counterfeiters. It has invested heavily in ultra-sophisticated tech solutions which use the latest advances in nanotechnology, internet of things (IoT), and AI to authenticate products. It lobbies governments to extend enforcement bodies' powers to seize and destroy fake goods, to prosecute buyers and dealers, and to block access to websites that sell counterfeit goods.

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luxury resale market will rise to $100bn valuation by 2030

sophisticated counterfeits threaten authenticators - companies respond by employing technology to aid human inspections

Vestiaire & The RealReal authentication processes

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Luxury resale platforms and brands are improving their authentication processes in response to more sophisticated counterfeits.

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Luxury authentication is one of fashion resale's most important functions, but it is also among the most secretive.

"There's a reason authentication is shrouded in mystery," says Rachel Reavley, board director at luxury resale site Hardly Ever Worn It (HEWI). "We have learnt the stringent rules on how to authenticate luxury fashion and accessories over time - and that isn't a handbook we want to give back to the marketplace or expose to counterfeiters."

Luxury and premium resale is already a sizeable market, which is expected to double to between $65 billion and $100 billion by 2030, according to estimates from McKinsey, as seen by Vogue Business. Prioritising authentication offers significant benefits. For Ebay, it's helped boost customer satisfaction and increased high value purchases by six per cent. Since launching an Authenticity Guarantee for sneakers in 2020, luxury sneaker sales on the platform have recorded double-digit growth. After the inclusion of watches in 2021, the average luxury watch buyer who bought a $2,000-plus watch increased spend to over $9,000 on watches and $8,000 on more than 50 items in other categories.

Without authenticators, experts say the luxury resale industry would crumble, void of consumer trust and rife with increasingly sophisticated counterfeits. "Our marketplace can't function without guaranteed authenticity," says StockX general manager of EMEA Derek Morrison. "Our biggest challenge is keeping up with counterfeiters because they are getting smarter and the fakes are getting better," adds Rachel Vaisman, VP of merchandising operations at The RealReal, which has authenticated and sold over 22 million items since it was launched in 2011, growing its internal authentication team to match.

While authentication has always been an issue for high-ticket items such as handbags - which account for around 35 per cent of the secondary market along with shoes, according to McKinsey - counterfeiters are beginning to target lower price points and more trend-driven items such as streetwear. Global technology platform Goat Group, which merges primary and resale markets, was founded in 2015 after co-founder and chief product officer Daishin Sugano unwittingly bought a pair of fake Air Jordan sneakers. Now, resale platforms are adding layers to their authentication processes, and brands have started exploring blockchain technology as a one-stop verification tool.

One subject still shrouded in mystery is the ultimate destination of counterfeit products. Some, deemed "friendly fakes" - those bought as well-intentioned gifts or unwittingly purchased from unauthorised sellers - are returned to the seller. The RealReal alerts law enforcement of fakes, which sometimes means sending items back to sellers and other times means they are destroyed. Others are retained for training purposes. At Trove, what happens to counterfeits is determined by the brand.

Recruiting and training authenticators

When StockX started hiring authenticators in 2018, Morrison would covertly recruit from sneakerhead Facebook groups. "You couldn't search for authenticators on LinkedIn, it was mostly enthusiasts doing it informally," he explains. Now, there is a whole ecosystem of roles and support staff, including former interior designers, architects and hospitality workers.

"Recruitment is a key challenge because there is no university for authenticators," says Vestiaire Collective's head of authentication Victoire Boyer Chammard, who previously worked on haute couture fashion auctions in Paris. The platform runs practice tests for applicants and bolsters existing knowledge with its internal Vestiaire Academy programme. Each candidate trains for at least three months and is supervised for seven, with additional monthly courses to update staff on new collections. "Knowledge of fashion history is important, in case labels are cut out," Chammard says. "Beyond that, the crucial skills are passion, attention to detail, a peaceful mind, experience and continuous study."

The RealReal only hires fine jewellery authenticators with a certificate from international gemstone identification standard GRA, while watch specialists must be certified horologists. For fashion, talent often comes from luxury brands or auction houses. At Goat, authenticators train for several months before authenticating anything independently and have to pass internal tests with 100 per cent correct answers.

Time is of the essence for rapidly growing resale platforms. StockX handles tens of thousands of items per day, split between 300-plus authenticators at 11 authentication centres, each checking over 50 touch points per product. At Vestiaire Collective, which has 15 million members worldwide, the 60-person authentication team leans on a 600-page handbook of tips and unique markers, regularly updated by a team of researchers visiting brand boutiques.

To streamline the process, lower value items are authenticated based on images uploaded by the seller. Those that raise red flags undergo further checks, including the original invoice and proof of purchase. Any item can be authenticated, but those over €1,000 are done so by default. The buyer has the option to select physical inspection at one of Vestiaire Collective's four authentication centres - in the US, Hong Kong, France or the recently added UK branch. Here, authenticators check the following: packaging and dustbag, whether the model exists (especially important for vintage items), the shape and materials, stitching (for example, Hermès uses the 'piqûre sellier', a diagonal stitch), irregularities that confirm the item is handmade, the typography of the logo (which evolves depending on designer and era), the metal components, serial number and accompanying paperwork.

Ebay has scaled its service by partnering with third parties: US watch service provider Stoll & Co for watches over $2,000 and leading sneaker authenticator Sneaker Con - which Ebay acquired in November as part of its ongoing partnership - for new sneakers over $100 and pre-owned sneakers over $150. Currently, the provenance and condition of handbags over $500 (from 16 prominent luxury brands including Saint Laurent, Gucci, Celine and Balenciaga) are authenticated in Ebay's two US authentication centres in New York and Nevada.

Brand participation could also help. The RealReal's Vaisman suggests that brands update hard-to-replicate markers of authenticity every year and inform authenticators of these changes. Vestiaire Collective is formalising this process: last year, it launched 'Brand Approved' partnership programme with Alexander McQueen, since rolled out to include Mulberry, Mytheresa and Ganni among others.

Combining technology with a human touch

StockX and Goat both use AI and machine learning as a first line of defence, often detecting counterfeits before they are even listed. Before products reach The RealReal's human-led authentication centres (two in New Jersey and one in Phoenix), automated intelligence checks whether the seller has a history of counterfeiting. "The combination of art and science is proving successful," says Vaisman.

Changes brands make upstream could aid authentication downstream. Ralph Lauren and New York luxury B Corp Another Tomorrow both print QR codes onto product care labels, linking to digital identities supplied by UK and US software company Evrythng. When a consumer scans the label, the product's entire lifecycle is shared, including sustainability information and an authenticity certificate. One challenge is making sure the QR codes are printed onto robust materials that can withstand many washing cycles, and that consumers don't cut the labels out because they are too prominent or uncomfortable. Evrythng co-founder and CEO Niall Murphy recommends that brand partners use QR codes in tandem with more covert labelling like watermarking or NFC chips.

The high-touch world of authentication doesn't come cheap, but non-profit Aura Blockchain Consortium - a collaboration between LVMH, Richemont, Prada Group and OTB - says digital product identities stored on blockchain could minimise handling and shipping costs. "Blockchain can give brands more control over stolen or fake goods, and it allows customers to maintain the value of their investment. It also promotes inclusivity in luxury by allowing brands to access first-, second-, and third-hand buyers," says general secretary Daniela Ott.

Ebay has also explored NFC technology in recent months, adding physical cards to authenticated handbags and watches, and tags to sneakers. White label resale platform Trove - with clients including Patagonia, Levi's and Eileen Fisher - is able to retrofit garments with these digital identities.

The key is including brands in the process, says Karin Dillie, VP of partnerships at integrated peer-to-peer marketplace Recurate, which works with brands from Mara Hoffman to Rachel Comey to offer resale within customer's order history. Dillie used to work at Sotheby's and says the auction house's approach to authentication has lessons for fashion. "Auction houses might send a painting to the artist's estate to authenticate it for a fee, which would improve buyer trust and allow them to charge a premium. Bringing brands into the fashion authentication process could mean we don't need years of training or expertise in-house because brands can offer that."

Comments, questions or feedback? Email us at feedback@voguebusiness.com.
More from this author: Kim Kardashian's Skims valued at $3.2 billion in new funding round Degrowth: The future that fashion has been looking for? Gen Z's ambition? Create a new fashion system

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Inside the secretive world of luxury authentication

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Luxury resale platforms and brands are improving their authentication processes in response to more sophisticated counterfeits.

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Fashionphile, Vestiaire Collective and The RealReal authentication processes

Chanel vs. WGACA trial and verdict (reference this now but expand during Possible Evolution section!)

EU DPP Law by 2026 will transform verification of new luxury goods but does not address vintage items...

the importance of the trifecta of HUMAN EXPERTS, AI ASSISTANCE and LUXURY BRAND CO-OPERATION to fortify authentication processes

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Can luxury brands trust authenticators to wipe out counterfeits?

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Chanel’s court battle with secondhand luxury platform What Goes Around Comes Around underlines a lack of trust in luxury authentication processes, leaving resale sites exposed.

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Entrupy Case Study:

authenticates designer bags and sneakers

99.1% accuracy rate

TikTok partnership

'how to use' demo

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Artificial intelligence can now detect whether a secondhand luxury item is fake.

Tech company Entrupy says its device can authenticate handbags from brands like Louis Vuitton and Chanel.

The AI authenticator is gaining renewed interest as companies seek to cash in on the AI hype.

Have you wondered if that Chanel bag you bought from a vintage reseller was legit? You may now be able to know for sure thanks to artificial intelligence.

Entrupy is a technology service that uses AI to authenticate designer handbags and sneakers in the resale market to ensure that customers are buying the real thing.

Since Entrupy was founded in 2012, the company says that its AI technology has been used by hundreds of vintage resellers as of December 2020, according to its website. And interest in the AI tool may continue to grow as businesses seek to cash in on the AI hype.

Currently only available to resellers of luxury goods, Entrupy claims its tool can authenticate products from luxury brands like Balenciaga, Burberry, Gucci, and Louis Vuitton. Using the AI could be a way for luxury resellers to build trust with their customers who may be wary of buying products that aren't real.

"The whole point of doing this is to add trust and make it verifiable as a third party," Vidyuth Srinivasan, the cofounder and CEO of Entrupy, told Elle in a recent interview. "It's the consumer having the certainty that this is not just [one] person saying that it's authentic, there's also a third party that's not invested in the transaction, certifying it."

Entrupy claims it has a 99.1% accuracy rate

The renewed interest in the AI-service comes as of last October, when TikTok announced its partnership with Entrupy to identify whether products on its new e-commerce platform TikTok Shop are fake. The partnership comes at a time when generative AI tools like OpenAI's ChatGPT have taken the world by storm.

To use the AI-powered authenticator, users are prompted to take photos of the product from every possible angle after inserting their smartphone into Entrupy's hardware device. The device has microscopic lens that the company claims can magnify the phone camera to take granular photos of features like a product's designer plaque and material.

The photos are then cross-referenced with a database of millions of pictures of authentic inventory using an AI algorithm. Within minutes, Entrupy can make a verdict on whether the product is real or not, which it claims has a 99.1% accuracy rate, according to its website. The company generates an official certificate that retailers can display if the product is deemed authentic.

It can currently only authenticate major brands

Still, the product isn't perfect: Entrupy's CEO told Elle that it can only authenticate accessories from major brands because those are the ones most prone to being fraudulent.

Entrupy didn't immediately respond to Business Insider's request for comment.

The AI-powered authenticator isn't the only AI hardware device getting attention this year.

In September, Meta launched the second version of its Ray-Ban Meta smart glasses that users can speak to through a built-in AI assistant. Two months later, Humane.ai, an AI startup, launched its AI pin - which the company says can project information onto a user's palm through light - to the market.

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AI can now tell if your Louis Vuitton handbag is fake

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Tech company Entrupy says its device can authenticate handbags from brands like Louis Vuitton and Gucci.

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interview with Entrupy founder Vidyuth Srinivasan

rise of superfakes and the value of AI and ML to tackle sophisticated counterfeits

adoption of the tech by LVMH among other luxury players

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The fashion industry has a big problem when it comes to counterfeits. And today, luxury knockoffs are only getting more indistinguishable, more perfect and more readily available so that even retailers are getting duped when one is placed on their counter for return.

When Entrupy entered the scene in 2016 as an AI-powered authentication tool, it unveiled a cutting-edge solution to what was becoming what Vidyuth Srinivasan, founder and chief executive officer of Entrupy, told WWD in 2018 was an "unglamorous but pretty unsurmountable counterfeit problem."

Entrupy's 2023 State of the Fake report found that across all categories, including consumer goods and digital piracy of entertainment and software, nearly $2.8 trillion of counterfeit goods are confiscated each year. Notably, in early November 2023, more than 219,000 counterfeit bags, clothes, shoes and other luxury products with a retail value of $1.03 billion were seized at a Manhattan storage unit by federal officials. The discovery marked the "largest-ever seizure of counterfeit goods in U.S. history."

But counterfeits aren't only found in rented storage units or on display for purchase on Canal Street. According to Entrupy, between 8 and 12 percent of the entire luxury market's inventory are counterfeits. In 2022, Entrupy's authentication testing unveiled massive amounts of unidentified products with the highest percentages labeled as Goyard, Saint Laurent, Prada, Dior and Celine found at pawn shops, offline retailers, online retailers, consumer-to-consumer marketplaces and wholesalers.

"One of the big problems that we see, and we saw in the market was retailers getting products returned to them, which aren't the same products that they sold to customers," Srinivasan told WWD. "With this form of return fraud, where people buy expensive things and then they swap the expensive thing with a fake and they return it. It's a crazy model if you think about it because you have the original in hand and you have the money back. You just won yourself a free luxury product."

When retailers began recognizing this return fraud, Entrupy developed a solution called Fingerprinting. In addition to Entrupy's authentication, its Fingerprinting solutions for product identification make items traceable, bringing new levels of protection to any point in the supply chain. Designed to be easily implemented at the point of sale or shipping, Fingerprinting is an accurate way to ensure the product returned is the same as the product sold. In practice, Fingerprinting uses microscopy and imagery to ensure that an item being returned is the exact same product.

"When you combine this ability to know if something is real or fake and combine that with Fingerprinting to determine that this exact same product, it becomes a powerful solution," Srinivasan said. "When we started thinking about how we can build trust in transactions and help the market to have more trustworthy transactions, we saw so many different kinds of technologies and various methodologies. We said we want something that counterfeiters cannot break because there's nothing to break. We wanted something that constantly kept pace with new counterfeits where we build something that can scale at any scale and learn and continue improving over time."

Ultimately, Entrupy's mission is to build a transactional trust layer between buyers and sellers. Entrupy can authenticate any physical product through microscopy and imagery. The company has focused primarily on luxury handbags and recently launched its sneaker authentication technology, to address the need for more trust and security in this fast-growing, high-stakes resale trade.

The underlying principle of Entrupy's system stems from the idea that microscopic characteristics in a genuine product or a class of products (corresponding to the same larger product line) exhibit inherent similarities that can be used to distinguish these products from corresponding counterfeit versions. Machine learning enables the system to learn rapidly and continually improve to stay ahead of counterfeiters.

The need to stay ahead, Srinivasan said, stems from a recognition that counterfeits are only getting better, giving way to a new kind of knockoff in the market called superfakes.

"Superfakes are the latest, highest-quality counterfeit products on the market," Srinivasan said. "They're not easily available but they're also becoming increasingly higher in volume in terms of how spread out they are in the market. In all my years, I've never seen fakes this good, but I don't think it's going to stop here. It's only going to get better, the quality is only getting better and the workmanship and our artisan ship is also getting so much better, which makes trusting any products that you buy online even more risky."

Moreover, superfakes are almost impossible to distinguish with just the naked eye. Gone unchecked as superfakes further penetrate the market, trust begins to denigrate. For example, a consumer buying what they think is a pre-loved luxury handbag through a secondhand retailer may believe that they found a good deal, but what often goes unseen are health complications and the support of criminal organizations.

Counterfeiting, explained Srinivasan, is far from a victimless crime. Behind the scenes, counterfeit manufacturing has been linked to unethical labor including child labor and human trafficking, with direct documentation to supporting terrorism. Entrupy's extensive research and testing on counterfeits and superfakes have also revealed that due to the lack of standards that legitimate products follow, the cheap quality of the product used in these cases can have huge health consequences. Counterfeits often contain banned substances, like lead, which can be very dangerous to the consumer.

"Even if they're buying it willingly, consumers end up being victims," Srinivasan said. "When we launched the service, we had a handful of customers who were wondering what we were doing. [We were] outsiders to this industry, giving them a device that took microscopic images. None of that made sense. But the thing that actually held true was the value of authentication of providing trust."

Joking that when Entrupy originally launched, the industry considered the technology "weird" and a "toy," Srinivasan said he has seen the solution become a formidable weapon against counterfeits. Notably, Entrupy's solution has been adopted by many major retailers and brands, including LVMH. Entrupy also reported the authentication of more than $1 billion worth of products in the last year alone.

"Unfortunately, the prevalence of counterfeits in the market still hasn't gone down," Srinivasan said of the accomplishment. "There are a lot of fakes out in the market. But at the same time, it has given me confidence and given the market confidence in showcasing that AI technology - machine learning - is a viable solution and viable protection against counterfeits because both are always evolving. As counterfeit qualities get better, AI also gets better at detecting [them]. All we have to do is stay half a step ahead and we will always be able to provide this kind of trust."

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Behind the Tech: Building Trust in an Evolving World of Counterfeits With Entrupy

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WWD speaks with Entrupy's Vidyuth Srinivasan about creating AI technology for luxury authentication processes.

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Interview with Entrupy Founder & CEO

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Can AI really be used to authenticate luxury goods?

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AI Product Verification Company - ENTRUPY

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AI Product Verification Company - ENTRUPY

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see pics

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Scalable AI-powered solutions for product verification-anytime, anywhere Secure inventory, protect supply chains and add trust to transactions at retail and resale Learn More Get Started Entrupy Solutions Authentication Entrupy's product authentication solutions protect businesses, buyers and sellers from inadvertently transacting ... Continue reading →

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The Possible Evolution of Gen AI for Luxury Authentication 

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The Possible Evolution of Gen AI for Luxury Authentication 

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discuss:

where Gen AI is heading within fashion: Gen AI investment and regulations

Chanel vs. WGACA case + what it means for the future of luxury authentication - highlight how it jeopardises resale markets and how Gen AI will provide a solution!!!

authentication trifecta and the future role of Gen AI within the process - research how AI will evolve and how this could aid authentication even more!!

structure:

future of luxury authentication (Chanel Case)

enterprise investment into Gen AI and competitive advantage (use graphic for exhibit with intro paragraph on rising adoption rates)

future of Gen AI (multimodal systems)

how does this all merge to form the authentication trifecta to secure resale markets for the next 10 years? - Gen AI as Co-Pilot along with Human Experts & Brand Co-Operation to prevent another Chanel Case from happening again!!