The Future of Fashion and Luxury? It’s digital and sustainable
Digital Transformation and eco-sustainability are currently two of the most common terms in all industries and critical goals for all organizations. But especially for brands that operate in some of the most appealing sectors, digital innovation and a much greener approach to business are way more than simple statements. They are bound to become a philosophy and a driving force for countless other companies working in the same field.
The change had been in the air for quite some time, even before the pandemic started. Then the disruption caused by COVID-19 to the global fashion/luxury industry ended up being exceptional, to the point that only now – two years later – the sector as a whole is finally starting to recover after the first, timid re-start signs in mid-2021. However, the pandemic didn’t cause this evolution; it simply exacerbated it and shed some leaves in the process. As a result, the brands and companies which already possessed the know-how and technologies to react to the crisis were able to better weather its impact, while those that had not yet aligned with the new (digital) trends struggled or ended up entering the list of casualties.
McKinsey’s latest “The State of Fashion” report underlines how overall fashion sales are expected to make a full recovery in 2023, but still in a global market that will remain very inconsistent and especially complicated. The current scenarios suggest that sales will reach 103% to 108% of 2019 levels by the end of 2022, while next year the industry’s growth will be led by the US and China – with Europe slightly stumbling behind. Contextually, domestic spending will likely fill the gap of an international tourism industry still in recession.
Inevitably, fashion companies will have to reevaluate and recalibrate their strategies to align them to changes in consumer behaviors that are likely to be permanent.
And the main changes will involve a greener business model and digital innovation, as these two trajectories will provide the most significant opportunities to grow – counterbalanced by the remaining challenges of the supply chain, logistics and inventory management.
Why are Digital Transformation and a greener business strategy essential for the Luxury and Fashion industries
Luxury and fashion brands are well aware that their Gen-Z customers and wealthiest consumers are more than willing to leisure-spend and that the post-pandemic recovery, albeit hiccupping across geographies, will eventually even out in terms of sales levels. Gen-Z customers are also increasingly environmentally conscious both in terms of final product and overall manufacturing process. However, in a scenario where material shortages, increased shipping costs and transportation bottlenecks may still represent an issue for companies having to deal with soaring customer demands, sustainability and digitalization are keys to success. Why?
As far as sustainability is concerned, luxury and fashion companies can intercept the growing domestic luxury trends by rebalancing their global retail footprint and duty-free networks and acquiring new customers for local e-commerce channels. This approach will allow brands to soften the blow caused by a decrease in international tourism, which up until COVID was the most traditional key driver for luxury spending. Also, supply chain disruptions can become the means to reducing environmental impact by favoring a circular economy: this is, in fact, one of the most crucial levers for the fashion industry that, by creating closed-loop recycling systems, can decrease textile waste, limit extractive processes of raw materials while still providing haute couture items. In this sense, circular economy redefines the very concept of business growth by following three routes: design out waste and pollution while reducing carbon emissions; keep products and materials in use as long as possible; regenerate natural systems by employing natural/organic materials.
And what about Digital Transformation? It is the conditio sine qua non to current customers’ mindset: consumers spend more and more time online and expect flawless digital customer experiences from discovery to checkout. That is why the so-called “social shopping” is considered a pivotal trend by 37% of fashion executives interviewed by McKinsey, and technologies like live streaming, AR try-on and in-app purchases are just some of the solutions companies should start to consider in the marketing strategies. At the same time, as the metaverse continues to spill into virtual goods, fashion and luxury brands will have to strategize new ways to engage with high-value younger customers. Among the emerging trends are, in this case, non-fungible tokens and virtual fashion, in an ecosystem that will include community-building, gaming and e-commerce.
How Syscons Interactive helps Fashion and Luxury brands become digital and more sustainable: discover Wholesales Market Place
As an experienced ICT consultant and advisory firm, Syscons Interactive accompanies fashion and luxury brands toward the route to sustainability and Digital Transformation with a specially designed solution focusing on wholesalers and directed to the manufacturers’ Sales Directors: Wholesales Market Place. It’s Syscon Interactive’s sustainable solution that protects the brand and produces greater economic benefits, as it serves as an innovative and articulated meeting point for wholesalers: a new-generation virtual marketplace hosted on an evolved and reliable platform such as Mirakl.
Wholesales Market Place is a groundbreaking, visionary yet rational solution that Syscons Interactive develops and customizes to each client’s specific requirements. Additionally, brands rely on our specialized consultants for the onboarding of their sellers to provide thorough training in terms of contract signing, access to the portal and feature usage.
Wholesales Market Place offers several functionalities to wholesalers: from stock sharing to publishing items to be sold to other wholesalers to purchasing items in a worldwide community that also is designed as a networking hub and think-tank. In terms of brand control and protection, Wholesales Market Place avoids clearance sales of luxury fashion items because the brand is the only regulator of market prices.
The platform was born to provide wholesalers with a virtually endless digital market where they can redistribute their products, purchase large quantities of merchandise and expand their range of products. The hosting on Mirakl platform also guarantees exceptional benefits, as – unlike other providers – Mirakl not only does not impose any price but also does not sell and has no profit margin on wholesalers. The brand hence remains the only direct seller.
Finally, Wholesales Market Place provides the exceptional benefit of leading luxury fashion companies toward tangible sustainability, as it promotes the virtuous recirculation of clothing items, decreasing waste production and carbon emissions. Simultaneously, every single redistributed garment is part of a more extensive stock that, unlike what would usually happen in traditional sales channels, does not end up being destroyed (and hence, wasted). With Wholesales Market Place, Syscon Interactive has designed a solution that increases profit and sales opportunities for all the parties involved while effectively encouraging a circular approach to fashion.
Syscons Interactive is part of Syscons Group and specializes in Omnichannel & Digital Supply Chain Solutions. Among our clients are globally renowned fashion and retail brands worldwide. Get in touch with our skilled consultants for reliable advice.