Opportunities and challenges for the apparel industry
Clothing is one of the necessities of people’s lives and as such the apparel industry is vital to the world economy. Technological innovations and advances in technology have influenced the way societies produce and the way people live. With the advent of the digital age, the apparel industry has been forced to face a digital transformation in order to drive the economy forward. However, digitisation has both advantages and drawbacks for the apparel industry, bringing opportunities as well as some challenges to the industry.
Transformation of the apparel industry
The apparel industry has undergone numerous revolutions. Whereas in Victorian times the most traditional production patterns in the apparel industry relied entirely on manual labour, since the beginning of the Industrial Revolution in the 19th century, thanks to the introduction of the sewing machine, the traditional manual mode of production began to shift to a machine-based mode of production. Meanwhile, the apparel industry began to flourish in tandem with this change in production.
Nowadays, with the digitalisation of society, the apparel industry is once again facing changes in all aspects, and as before, there are many opportunities and challenges in the digitalisation process.
Opportunity 1- A wider range of raw materials
The digital society has made the world more connected, which means that apparel companies can easily access textile materials from all over the world. Traditionally, the apparel industry might only be able to use textile materials from their own country, and importing them from abroad would take a long time and be expensive to transport. In a digital society, however, the transport industry has developed considerably and apparel companies are able to purchase textile materials from all over the world at low prices, which increases competition within the apparel industry and thus improves the quality and diversity of products.
Opportunity 2- Better meet customer needs
As people’s living conditions improve, consumer demand for clothing is becoming more diverse and personalised, which means that apparel factories must be able to produce quickly in small batches. However, traditional apparel supply chains are scaled up, slow to respond to customers and have long production cycles.
Digitalisation can solve this contradiction. With a digital system, clothing companies can respond to customer demand in a more timely manner and consumers will be more engaged. Meanwhile, apparel companies can also reduce their production costs by determining the approximate demand for each item based on big data analysis.
Opportunity 3- Digital is the future of apparel design
In the future, the traditional manual design mode will be converted to a computerised 3D design mode. This change from 2D to 3D will completely overturn the previous traditional mode of the garment industry. Meanwhile, AI technology can also be applied to the design field to make design more diverse. In addition, with this trend, combined with intelligent customisation systems, the future clothing industry may be able to produce according to the needs of customers, who can give a higher value brand premium, while clothing companies do not keep any inventory and risks can be minimised.
Opportunity 4- 24/7 shopping experience
Online shopping offers opportunities for the apparel industry. For consumers, online shopping allows them to purchase clothing at any time of the day, not just during the opening hours of physical shops. According to statistics, 88% of online shoppers choose to buy online because they can do it 24/7.
Meanwhile, some new algorithms have been widely applied to online sales platforms such as ebay, which use specific algorithms to analyse consumers’ clothing styles based on their previous purchases and recommend similar clothing styles that they may be interested in.
In addition, the COVID-19 pandemic has accelerated the shift to online consumption. This technological advancement has greatly contributed to the economic development of the apparel industry and has significantly increased the sales of apparel companies.
Challenge 1- the decline of Brick-and-Mortar shops
However, one of the downsides to the boom in online shopping is the decline of Brick-and-Mortar shops. The traditional clothing industry is much more focused on the customer experience. When consumers enter a physical shop, they are not only able to see the clothes in a more three-dimensional way, but they can actually feel the material of the clothes and the shop staff will recommend clothes that fit them according to their body shape. We could even say that the traditional clothing industry doesn’t just sell clothes, it sells the shopping experience along with them.
Statistics indicate that 65% of people in the US still prefer to shop in brick-and-mortar shops. Nevertheless, the decline of brick-and-mortar shops has been exacerbated by the COVID-19 pandemic, which has forced a large number of brick-and-mortar clothing shops to close due to financial problems caused by declining sales, meaning that this shopping experience is fading away.
Challenge 2- Digitalisation is a double-edged sword
In the past, a brand may have been limited to a city or national scale, but with the boom in the digital industry and the growing popularity of the internet, more and more clothing brands are able to sell their products on a global scale. Apparel companies can promote their brands online, for example through twitter, instagram etc. However, in the information age, as information is transmitted very quickly, if a clothing company is involved in some negative news, even if it has a small impact, it can cause serious sales losses for the company.
This means that digitalisation is a double-edged sword, which can bring opportunities for a company to enjoy high visibility, or can lead to serious sales losses due to negative press. Therefore, apparel companies need to take on relevant social responsibilities, including ensuring the quality of their products and strictly controlling carbon emissions in the production process, in order to avoid negative press as much as possible.
Challenge 3- Behind the digital transformation is a change in people
The success or failure of digital transformation depends on the decision makers of the enterprise, clothing enterprises in the layout of the digital strategy need to have a “global” perspective, not just the pursuit of technological innovation, which should be from the strategic positioning of enterprises, IT capabilities and financial capabilities and other aspects of comprehensive consideration. In addition, the digital apparel industry is also facing the demand for compound talents. The most difficult thing about the apparel industry is often that people who know apparel do not know IT, while those who know IT do not know apparel, in this case, enterprises either have to introduce talents or train them, but both methods require continuous economic investment from enterprises.
Conclusion
Overall, although the apparel industry will face many opportunities and challenges in the process of digitalisation, some of them may cause significant problems for the company, such as high financial investments. However, once the apparel companies have successfully undergone the digital transformation, they will not only gain high financial revenues, but will also lead the future development of the entire industry.
