Machines Will Decide What We Wear This Autumn

What will millions of Poles wear this autumn? Machines will decide

The fashion industry developed very dynamically for years; major fashion houses and retail chains grew stronger, increased the number of collections released in a single year and boosted sales. At the same time, smaller players multiplied, hoping to carve out a slice of this enormous pie. The pandemic, however, shook the industry, and it is unclear how its future will unfold. One thing seems certain: those who turn to new technologies will gain the upper hand in the new deal.

Eurostat, the European Statistical Office, recently published data on retail trade in April 2020. Compared with March, at the peak of the pandemic, turnover in EU countries fell by more than 11 percent. That is a lot, but in some market segments things were far worse. In the case of clothing and footwear, sales shrank by more than 63 percent compared with March. For many companies, this means catastrophe. The data covers the EU, but lockdowns were introduced in many other regions of the world, so it can be assumed that the fashion industry suffered severely on a global scale. The matter is very serious, as this sector was already worth $3 trillion several years ago, as reported by Forbes. Fashion accounts for a few percent of global GDP and millions of jobs.

Crisis Is Nothing New

Crisis in Fashion

The market encompassing clothing and footwear was already struggling with various problems before the coronavirus pandemic. The industry service Fashion United reported back in 2017 that nearly half of British fashion retailers faced the spectre of bankruptcy, driven by, among other things, fierce competition, currency market fluctuations and the need to introduce deep discounts. This was not solely a British problem – across the ocean, reports had already emerged a year earlier about fashion companies closing several, a dozen or sometimes far more stores. Pennlive even reported a "retail apocalypse." The pandemic and the resulting crisis will amplify and accelerate processes that had already begun.

- For most companies, hard times have arrived. This can of course mean the end of a business, but such a situation also becomes an opportunity. Taking radical action can bring tangible benefits. There are frequent voices saying that the SARS epidemic in 2003 helped Chinese e-commerce take off and is behind the success of the market giant Alibaba – explains Aleksandra Szarmach, CMO of Nethansa, which brings Polish and German companies onto Amazon, where, with the help of its proprietary Clipperon system equipped with artificial intelligence algorithms, it comprehensively manages their sales. – Now it may be similar; the crisis will give an impulse for change. It is already happening; reports are coming in from around the world about the dynamic growth of the e-commerce industry. However, simply having an online store is no longer enough today; you need to be open to new solutions, such as artificial intelligence – adds Szarmach.

Data and forecasts support her words. Already two years ago, the research firm Juniper Research predicted that retailers' spending on artificial intelligence would grow from $2 billion in 2018 to $7.3 billion in 2022. Where exactly can these new technologies be applied in the fashion sector? Everywhere! From design, through production, logistics and the supply chain, to marketing and sales. Even at the stage of identifying trends, AI can prove very useful. Based on an enormous amount of data, it can determine not only what people will want to wear, but also how successful a given collection will be. This helps create sales and production forecasts. The closer they are to later results, the smaller the losses companies will suffer, which is of enormous importance in times of crisis.

Hope in Artificial Intelligence

Hope in Artificial Intelligence

Several quarters ago, there was a lot of buzz about the startup Designovel, which uses AI to design clothes. It is a computer powered by an enormous amount of data that shows humans which patterns and colors may attract people's attention. Meanwhile, the Turin-based company iCoolhunt provides a tool for predicting trends, changes in customer behavior and their lifestyles. And it apparently does this well, because dozens of well-known brands use its solutions, including clothing industry giants: Adidas, Prada and Timberland. Other companies are working on using AI to select appropriate materials, detect fabric defects or match colors. The Portuguese startup HUUB provides fashion brands with a logistics platform that allows them to manage the processes of storing, packing and shipping products. The tool is simply meant to help maintain stock levels at the right level.

But are changes driven solely by startups that develop solutions for major fashion companies? – Amazon, for example, realized long ago the scale of the fashion industry and the potential dormant in its modernization. Back in 2009, Jeff Bezos' company paid more than a billion dollars – at the time, truly big money in e-commerce – for Zappos.com, a store offering clothing and footwear – recalls Aleksandra Szarmach. – In business, however, it is not only about acquiring others; you also need to focus on innovation, and Amazon does that. Suffice it to mention the Style Snap feature presented a few years ago, which uses artificial intelligence. A user of the Amazon app uploads a photo or screenshot showing a product, and the program not only enables them to buy that specific item, but also suggests similar items representing, for example, the same style. That is exactly what customers expect today – concludes the CMO of Nethansa.

AI Moves into the Mainstream

AI Moves into the Mainstream

Artificial Intelligence in Fashion: How Algorithms Set Trends

Amazon recently announced that it is abandoning further development of the Echo Look device, introduced to the market in 2017. The hardware had a camera and, combined with the voice assistant Alexa, developed using artificial intelligence, served as a fashion stylist. Based on the user's photos and videos, Echo Look suggested which outfit was best, whether it matched the latest trends and what could be changed about it. Of course, it also indicated what could be bought to look better. Did the company abandon this solution because it deemed it unnecessary? No, its functions are simply already largely available in Amazon's shopping app. The company is still working on innovations, as recent reports from Lab126, the research and development team of the giant e-commerce platform, may indicate. It created a tool called Outfit-VITON, which can be briefly described as a virtual fitting room.

The idea of virtual fitting rooms is being implemented not only in the e-commerce environment. For several years, companies have also been working on mirrors of the future, which with the help of AI could support sales in traditional stores. How does it work? The customer does not have to put on every item they like to find out how they will look in it – the mirror will handle the fitting for them and display only the results. Companies such as Intel and Van Heusen have already boasted such solutions. And speaking of brick-and-mortar stores, it is worth mentioning the British startup Aura Vision, which uses security cameras already operating in stores and, based on the image, provides information about customers: their age, gender, shopping behavior and preferred style. All of this is done with respect for their privacy, and is of course possible thanks to the development of algorithms.

Artificial intelligence in traditional retail will play an increasingly greater role, but there is no doubt that e-commerce is the sector most eagerly awaiting its flourishing. This applies to both sellers and customers. Just look at the issue of returns. Essential Retail reported a year ago that on average 40 percent of fashion purchases made online are ultimately returned. The reasons vary: from the wrong size, through poor color reproduction in the online store, to mismatch with preferred style. This generates huge costs for companies in the sector, burdens the environment and discourages customers. That is why virtual shopping advisors, who will protect against unsuccessful purchases, will play an increasingly greater role. A good example of work in this field is the Danish platform Easysize, which has set itself the task of reducing waste associated with the production and shipping of goods.

– The issue of environmental protection can go hand in hand with business development, and it is precisely artificial intelligence that can combine these two seemingly contradictory goals – comments Aleksandra Szarmach. – If a company uses modern solutions to reduce its negative impact on the planet, it can also use this for promotional purposes. The group of customers who choose conscious and least harmful brands is growing, and in a crisis this trend should even increase. Whoever understands this first and follows this path can gain a great deal.

Summary

The fashion industry, which was already facing a crisis before the pandemic, stands before an enormous opportunity for modernization thanks to artificial intelligence. As the article shows, already in April 2020 sales of clothing and footwear in the EU fell by more than 63 percent, forcing companies to seek new solutions. AI technologies are being applied from design, through trend forecasting, to virtual fitting rooms — such as mirrors of the future or Amazon's Outfit-VITON tool.

Experts such as Aleksandra Szarmach of Nethansa point out that the crisis, like the SARS epidemic, will accelerate the development of e-commerce and innovation. Even now, startups such as Designovel, iCoolhunt and Aura Vision show that AI can help reduce costs, returns and negative environmental impact, becoming the key to success in the new reality.