Digital Transformation applied to the Fashion and Textile Industry

Article by Bsamply Project Manager, Nefeli Bompoki

Digital transformation is the process of transforming systems, cultures, business processes, and strategies within a company through digital means. It can be as simple as switching from paper to digital or launching an online shop. Unfortunately, the application of digital technologies in the fashion industry has long remained in an exploratory stage due to several inhibitors and barriers that affect the pace of adoption (e.g., financial constraints, insufficient expertise, resistance to adoption) but today more than ever, the need for fashion brands to implement technology and digitalization to track processes, collect data and report performance in relation to CSR and ESG is fundamental.

From SaaS and ERPs to CRMs and agile operations, companies are seeking to not stay behind in an increasingly competitive environment that demands a shift from manual practices and a focus on strategic thinking investing money in digital transformation. Manufacturers, garment makers, raw material suppliers and brands are trying to take advantage of every technological solution they can adapt, investing in digitalization to reduce costs and optimize production flow, flexibility, and times.

However, the current situation of the fashion industry regarding digital transformation can be very chaotic albeit digitalization does not necessarily require large investments in complicated software or machinery. Its basic principle is using data to optimize factory processes, to track and monitor every cost item, preferably in a live cash flow overview, while focusing on information such as: the effective working time of the employees, the lead time and value of stock, energy consumption, and purchasing conditions.

What are the different tools available and how do they work?

From e-commerce, which is the fundamental and most simple digital tool for companies, to the most elaborate digital implements regarding the supply chain, the fashion industry looks for solutions to respond to an increasingly digitalized environment.

If we take a deeper look at some of the aspects brands are placing more and more emphasis on today, those that are most pivotal include:

E-commerce

Today, e-commerce has become a crucial tool of the industry responding to the modern consumer’s needs. In fact, a growing number of brands have no physical store at all. This tendency, of course, has much to do with the widespread store closings because of the Covid-19 pandemic lockdowns.

A2021 report affirms that 43% of consumers who had never purchased clothing online began doing so during the years of the Covid 19 pandemic, while a report from Kibo found that 30% of Gen Zens and 36% of Millennial consumers expect to purchase less at physical stores than before. While it’s difficult to predict such behavior, it is safe to say that there has been an objective digital transformation in e-commerce during the pandemic lockdowns. Its rapid growth has pushed fashion brands to seek out new data, and new forms of collecting data.

Supply chain

The supply chain is a famously complex process, and often contains the most moving parts for any fashion brand, but also the most room for change. Some of the processes that will be protagonists in the fight to change and digitize correctly the supply chain are:

Predictive Analytics

A process that is widely getting adopted and more companies are investing in is the process of employing statistical algorithms and machine learning techniques in order to use the past to make predictions on the future. It is one of the leading solutions against disorganized processes and guesswork in the supply chain.

Blockchain technology

An advanced database mechanism that allows transparent information sharing within a business network. Blockchain can resolve issues along the supply chain like unclear sourcing, untracked product postproduction, unknown manufacturing locations, authenticity of products, and consumer demands for transparency.

Sustainability. The main focus today.

Digital transformation is helping to make a reality out of what 52% of consumers -according to a survey conducted by Nosto in the US and the UK -have been asking for, for a long time: sustainability and transparency: The sustainable fashion movement has gained significant traction in the past years fighting against unethical sourcing, lack of transparency, overproduction, worker exploitation, water, air and land pollution

Through digital solutions, the industry is slowly becoming more eco-responsible, diverse, and inclusive, reversing the fact that it is the second-most environmentally-harmful industry. It is responsible for 10% of total carbon emissions and is the second largest consumer of water supply in the world.

The industry is finally adopting digital solutions to address fashion and textiles’s sustainability faults with evolving movements: resell, sustainable raw materials, and virtual fashion.

Textile leftovers and throwaways can be a major source of waste for many fashion brands and retailers. According to the EPA, 17 million tons of textile waste ended up in landfills in the US in 2018. From durable plant-based fabrics to recycling processes, companies are finding new digital solutions to create sustainable resources themselves and cut out the problems from the route.