Jun 07,2016

Is technology industry being so similar to Fashion Industry?

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Technology is a tool that makes us behave better by giving us an efficiency that allows us focus more meaningful things, and productive if utilized properly.  As the world around us constantly changing, it is obvious that change is inevitable and constant.  Technology demands better, faster and cheaper way to solve problems whereas Fashion demands newer styles, shorter supply chain, and cheaper products.   Today’s social networks introduces newer styles, designs to the consumers and consumers shows interests to get them on demand.  The customer experience is no longer limited to browsing or purchasing of certain goods in physical stores. Technology enhances end-to-end customer journey, starting with the customer researching the goods online, visiting a store or ordering online to purchase the goods, and continuing well after the purchase has been finalized by vocalizing feedback about the product and the brand. Customer leave behind all the touch points throughout the journey and technology enables remember those to enhance personalization of the customer. For example, if you visit Amazon online store, you will experience this type of personalization.

Technology is part of our daily life, directly and indirectly.  Can you imagine how we thought of doing banking 20 years ago than today. If I would be telling you 20 years ago that you do not have to go to the bank for your banking needs would you believe me?  We are doing banking from our cell phone without thinking twice nowadays.  It is not accident anymore, it is part of our life, isn’t it?  Technology changed the industry of banking, finance, insurance, travel and many more industries. How about auto industry?  Don’t we see all the new auto car has core technological affect where consumer can get their great transportation experience.  Traditional taxi industry got immensely affected by company like Uber, it is so common now a day’s people even use word like ‘Uberize’ it just like the word “Google”.

Who drives this change?

Millennials are the driving force for this technology growth because the past few decades have witnessed astounding advances in technology and computing.  They embraced the change. Also, they use social media more frequently and are even more likely to sleep near their cell phone.  They are a technologically connected, and diverse.  They are able to search their favorite designer, brand or retailer through their phone and order whatever they desire, in the matter of minutes.  The priority that they place on creativity and innovation results for future economic growth and created many entrepreneurs.  Because of technology, entrepreneurs are no longer limited fund anymore more.  For example, “crowdfunding” enabled entrepreneurs to raise capital from diffuse sources online, rather than relying on traditional sources like banks to grow their businesses.

Why do they drive this change?

Millennials outbids the numbers.  According to United Census Bureau, Millennials, the cohort of Americans born between 1980 and the mid-2000s, are the largest generation in the U.S., representing one-third of the total U.S. population in 2013.  Currently, Millennials have surpassed Baby Boomers as the nation’s largest living generation.  In the same study released this month by the U.S. Census Bureau. Millennials, whom they defined as those ages 18-34 in 2015, now number 75.4 million, surpassing the 74.9 million Baby Boomers (ages 51-69).   These millennials are the driving force behind the increasing need for industries to adapt digital tools and technologies.  We witness the effect of other retailers who did not embrace the change.  Circuit City, Block Buster, Borders are no longer in the business. On the other hand, Sears, JCPenny, Macy’s, Wall mart, Gaps, etc. started embracing technologies and constantly finding new ways touch more customers.

Millennials are a technologically connected and diverse generation. The priority that Millennials place on creativity and innovation augurs well for future economic growth, while their unprecedented enthusiasm for technology has the potential to bring change to traditional economic institutions as well as the labor market.  Smartphone penetration in particular is creating pressure on physical store sales, and trends such as “showrooming” are causing physical stores to become the means for customers to see or try the goods they want, only to find a cheaper alternative online. Battling this phenomenon requires stores to be up to date with their inventories as well as other alternatives available to their customers from their competitors.

This is good for consumers, they can not only be making informed selection from many choices based on their need, they are able to interact with many likeminded people through the Cloud.  It’s hard to believe that NFL super bawl Ad is less effective now a days than internet Ad.  We have new type of consumers who drives this demand. Majority of these consumers are known as millennials based on their age limit.  Mary Meeker , partner at venture capital fund Kleiner, Perkins, Caufield & Byers, June 1st 2016 presented her study on internet trends at this year’s Code conference in Silicon Valley, with findings that have major implications for retailers. In her study, she mentioned in USA retail Cloud sales is increasing every year, last yeay it was +10% Same study revealed that major retailers like Nike, Gaps, Wall Mart are reaching more than $100 million in online sales.

In another study done by kpcp.com, Cloud affects typical business especially Retail Stores by increasing e-Commerce presence.  Online sales increased 26% of F2015 with a steady +24% YoY increase. Technology has turned the entire fashion industry upside down – making all types of fashion more accessible to a large spectrum of consumers, but also more of a challenge for designers and retailers when it comes to competition.  In the last twenty years, consumers have been introduced to a revolutionary technology in the form of computers and the internet.

According to a survey done by Samsung among retailers, 94% of retailers believe that the future customer will be driven by technology; today this number is 41% to enhance the customer experience. The best path forward is to embrace the technology advancements as tools to build and strengthen a customer centric Omni-channel presence.

Enhance Store experience 

Retailers find ways to leverage technology to improve in-store experiences. Innovations such as

  1. Virtual mirrors and interactive kiosks can also refuel customers’ desire to shop in store.
  2. Offer hybrid customer experience. The customer experience is no longer limited to browsing or purchasing of certain goods in physical stores. It now extends to an end-to-end customer journey, starting with the customer researching the goods online, coming into a store or ordering online to purchase the goods, and continuing well after the purchase has been finalized.
  3. In-Store has RFID tagged products gives the consumer exact quantity available at hand and location of the products.
  4. Vocalizing feedback about the product and the brand.
  5. Targeted ad based on the customer profile data, for example a father discovering his daughter is pregnant thanks to a personalized flier from target advertising pregnancy and baby essentials is a great demonstration of the power of technology.
  6. Predictive analytics, which predicts customer behavior showcase product to the customer so they can spend more money with your store.
  7. Tech-based retail, instead of writing on the wall for remaining incumbents and physical stores, but rather a wave of change that if caught, can be as lucrative as it is for innovative tech-based retail companies.

 

Millennials clearly impacting the fashion industry.  They are the 27% of the population in the USA today and their spending power rising significantly and will be next 20 years. They are not afraid of change for a better result, technology is the answer to that.   Technology bridging online, in-store, and on-the-go experiences also requires a shift in mindset.  Software is enabling the change more, so you can actually ship in public, and you can make much faster changes.  Retailers with a traditional sequential or funnel view of how purchases are made shifted to a newer more responsive approach – across device screens as well as physical spaces – to speak to the market in real time, and both drive and adapt to consumer preference.  Given that digital products need to be available everywhere, including in store, design of responsive experiences expands reach.

 

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