McKinsey&Company
The state of fashion technology
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Watch this space. Major players in the luxury and fashion industries, including watchmakers, are experimenting with NFTs (nonfungible tokens). These digital assets, verified through blockchain technology, are becoming ever more popular—and pricey. The creative director of one US-based retailer, for example, recently released an NFT version of a watch complete with a gaming element and various levels. Whether NFTs sustain their worth over time remains to be seen, but this new digital world is creating plenty of new opportunities for customer engagement. [NYT] |
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Got to be real. Luxury brands lost nearly $100 billion dollars’ worth of sales to counterfeits in 2017 alone. These staggering losses—coupled with reputational harm—have turned some brands onto using technology, including blockchain, for protection. Some luxury brands are using blockchain to give their products a unique digital ID that will help consumers verify that what they’re buying is, in fact, a luxury item and not a fake. [CNN] |
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More tech. Fashion companies invested between 1.6 and 1.8% of their revenues in technology last year. That figure will likely increase by 2030 to between 3.0 and 3.5%, bolstered by the conviction that tech could provide a competitive edge. Some are already using tech to support their customer-facing activities—such as delivering superb customer experience—while others are using tech to streamline their operations and processes and support sustainability.
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Evolving tech. Technology’s operational potential is becoming more evident: fashion companies could see a 118% cumulative increase in cash flow by 2030 by embedding AI into business models, while technology laggards could see a 23% relative decline, McKinsey analysis shows. In partnership with the Business of Fashion, we’ve identified five key areas where fashion leaders could make digital investments. Each could not only help the fashion industry tackle critical challenges but also uncover potential opportunities and make a true difference in performance.
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| — Edited by Justine Jablonska |
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