Despite how things may have seemed during the pandemic, COVID-19 did not stop everything. In fact, you may be surprised to find that it is actually responsible for accelerating something. COVID-19 has accelerated the digital progression of several industries in the face of an economic crisis. With brick-and-mortar stores closed down, many companies had no choice but to develop their e-commerce strategy to continue to reach consumers. Fashion Retail is no exception.
According to data from a November OMNIPEDIA Report, by the end of 2021, the global fashion industry’s market share of online channels is expected to grow to 22%. The e-commerce penetration rate will rise to 50%. 2022 will only see greater growth as we move further from the pandemic’s tragic memory.
Proportionally, the amount of online data and traffic of fashion images are rapidly increasing, reshaping the battlefield for competitors in the market. Fashion Retail businesses are strongly motivated to find ways to react quickly to changing consumer needs despite the limitations faced by all industries and businesses alike from past stagnation.
Executives are currently focusing more on digital transformation to recover from the decline in sales due to the pandemic. After such losses are recouped, the major strides and trend adoption will remain the new normal in a more digital world.
30% of executives at consumer goods and retail companies cited digital as the most promising area for meaningful results. Among fashion company executives in APAC (Asia-Pacific regions), 70% said they expected revenue growth from e-commerce channels. This is especially relevant as APAC is the leading region in the global textile market, holding major influence over US fashion industry trends.
Self-awareness will be an invaluable trait, as businesses see which trending developments return profits and which drain revenue. It appears that e-commerce holds a promising future but only with proper navigation. Currently, most businesses are trying to figure out which rocks to hop on to get across the stream.
Acting on successful trends and survival such as the following listed will likely determine the survival of the majority of Fashion Retailers into 2022 and beyond.
A Wealth of Information – Global Online Consumption
As many have come to realize, Data collection has now become rampant and acts as a necessary fuel for all the latest innovations. Basic Consumer personalization has gone from a draw to an expectation. Successful Fashion Retail companies need to know what consumers want before they do. They need a keen eye for recognizing trends. Fashion stores that used data to provide personalized e-commerce customer experiences have seen online sales grow by 30 to 50% globally. When inventory and store optimization followed the decisions after data-based analysis, sales increased by 10%.
Rather than a crystal ball, detailed data can provide the necessary boost to a businesses’ eyesight and insight. According to projections from Statista, 79 zettabytes of data will be created in 2021. That’s up from 64.2 zettabytes in 2020 and 41 zettabytes in 2019. (A zettabyte is a trillion gigabytes.) Data allows companies to see what consumers are buying or not buying, what is popular on social media, and otherwise predict sales based on previous behavior.
It is clear that the data is available and collection is necessary, however that is only half the battle. Understanding your consumers’ data and making educated decisions based on such insight remains the bread and butter of successful e-commerce sales. The companies that can process the most data in the most efficient way will have a significant leg up in regards to competitive profits, but quality over quantity has its perks. The next great step for a business may be spelled out in their latest batch of data, they just need to learn how to spot it.
Here is where AI becomes a necessity for a business. Innovative AI services can greatly expand any company’s data analysis potential. More data can be organized and translated to reveal valuable insights within.
Human error is greatly diminished, with AI perfection helping sort out meaning and provide the best possible accuracy.
Coats are King – Changing Buying Habits
COVID-19 and the resulting quarantine greatly affected what people bought, especially in regards to fashion retail, we are now beginning to see changes in these habits.
For example, outerwear is expected to be sold explosively. OMINOUS.AI, a Samsung-Accelerated fashion AI developer, has noted their Coat category has increased by as much as 131.38% from the previous year; in data up to October 2021.
Retail businesses must stay alert to changing buying habits to manage their inventory properly and take advantage of the upcoming surge in pre-pandemic fashion necessities such as outerwear.
In 2020, Fashion Retail businesses that foresaw the demand for lounge clothes, such as sweat pants, in response to the pandemic walked away with the greatest profit. This was far from mere guesswork. Even common sense has its limitations and remains imprecise.
Consumer data remains the key to unlocking the wants of the many and the needs of the future.
Coats and Jackets, a seasonal necessity that will once again return to the leaderboard as Americans everywhere perfect their style for returning to a less remote society. According to NPD, “more than half of U.S. consumers plan to buy apparel in the coming months, making it the top category of anticipated spending, followed by footwear and beauty products.”
Understanding the focus of these upcoming purchases will resolve stock issues and ensure businesses a strong flow of customers in 2022.
On The Green – Recognizing Trends Through Data
COVID-19 has changed the way many businesses look at consumer data. With trends being an increasingly important part of fashion retail, good data can help businesses be sure they have the inventory to support consumer needs.
Satisfying trend purchases will help build consumer trust and provide much-needed sales during the profitable months of early recovery.
Here is a current example of successful trend recognition through OMNIOUS.AI’s data in Korea. Initially, looking at the increase or decrease in product stocks between March and April, the t-shirt, the item with the largest market share, has the highest figure. An unsurprising data point given the pandemic’s influence on an era of comfort. However, in terms of percentage, the polo t-shirt showed an exceeding change rate of 134.58% between July and August. This was a sure sign that a more in-depth analysis was necessary for these items.
Of the brands that introduced polo t-shirts, golf specialty brands accounted for 74.60%, and casual brands expanded significantly to 23.60%. Compared to last year, the primary colors (white, black, and navy) have occupied from the first to third places, accounting for 54.43% of the complete list of colors; this also shows an increase of 8.56% from last year.
Such changing color preferences have even been noted in the Washington Post, as a sign of renewed optimism by consumers. Altogether, by analyzing this data, it is clear that the golf trend is surging worldwide, and a polo t-shirt has become a representative item that showcases the trend.
These figures allow the brands to derive the results and action items that they need to focus on to plan the launching of polo t-shirts, and other adjacent styles, that fit the tastes of women, Millennials, and Gen Z shoppers – as the golf trend will likely stay for the next several seasons.
Go With Micro – Working with Influencers
As people emerge from their COVID-19 induced fashion hibernation, many will look to their favorite influencers for advice on their clothing needs.
Social media became even more important to the consumer psyche as influencers proved a much-needed form of escapism for the majority struggling with isolation. Influencers can be an excellent way for businesses to predict the next trending fashions before it becomes mainstream.
Social media is overflowing with potential data, all of which can provide accurate information on buying habits and trends. Understanding where to look and what qualifies as trending is essential knowledge for proper navigation.
Polo shirts accounted for 0.60% of casual tops worn by influencers in 2021, which is an increase of 0.36% compared to 2020. This annual increase does not show signs of stopping, as a result, retailers should anticipate this trend to carry over into 2022.
It is also worth noting that MICRO influencers posted around half the polo shirt posts picked up in the data. MICRO influencers carry a smaller following but are often the community where major trends are first conceived. They are also far more accessible for possible collaborations.
Overall this social media data helps confirm predictions of the Polo shirt trend. Influencers are another valuable tool for spotting clothing trends on a somewhat overly impressionable post-pandemic audience.
The goal of satisfying consumer needs has always been the priority of Fashion Retail, however, the setbacks of the pandemic lead to more dire stakes with increased risk of elimination and failure due to consumer preferences being better met by competitors. Successful businesses are adapting as a result to more aggressive strategies, with fast-moving technology, specifically in data collection and analysis.
The power of early adoption is recognized by the experience of early adopters. The top 25 retailers in the fashion industry that have actively implemented transitions to digital, data, and analytics models drove more than 90% of the fashion luxury sector’s growth in global market value during the pandemic.
As we emerge from COVID’s shadow, retail companies must act fast to recapture consumer attention and businesses. Data analysis is a necessary tool to keep businesses prepared and informed of purchasing trends. In an upcoming era of reemergence, meeting all factors that can increase profit and customer popularity is the pathway to the top.
Recent trend recognitions provide a valuable outlook into a potentially bright and informed future for fashion retail as the industry heals, returning to its former glory.
Jaeyoung Jun is the Founder and CEO of OMNIOUS.AI. As an award-winning industry researcher, Jaeyoung Jun’s credentials include conducting R&D for major government agencies and technology companies worldwide. Jun has been leading the digital revolution of the fashion industry since 2015. While working towards his Ph.D, Jun founded OMNIOUS.AI after seeing the potential applications of deep learning technology in the fashion industry.