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How Digital Transformation is Reshaping the Fashion Industry
The global fashion industry, set to earn $1 trillion in revenue by 2025, is being propelled by a wave of digital transformation. Consumer expectations are evolving rapidly with technological advancements offering immersive experiences online. As a result, investment from fashion brands into technology is increasing dramatically – expected to rise between 3 and 3.5 of total revenues by 2025, up from around 1.6-1.7 in recent years.
The journey towards this $1 trillion mark is being driven by the exponential growth of social commerce, which has already grown to a value of $492 billion and is projected to triple its pace before reaching $1.2 trillion by 2025. Fashion and apparel are poised to lead as the fastest-growing sector within this segment.
A majority of fashion executives 37 predict that social commerce will significantly impact their businesses in 2022, especially among Gen Z and millennials who now comprise a substantial portion of the market at approximately 62. These generations seek shopping experiences that are not only quick and convenient but also resonate on an emotional level with brand values. Social commerce enables brands to meet these demands by creating immersive experiences that facilitate discovery and blur the lines between content consumption and online shopping.
To capitalize on this tr, fashion companies have ramped up their investments in influencer marketing, e-commerce platforms, and marketplaces where they can gather data insights and deliver a superior customer experience. This ecosystem fosters connections with shoppers based on trust and affinity for both brands and personalities.
The metaverse is also becoming a focal point of strategic planning among leading fashion houses as it promises an exciting realm that intertwines the physical and digital worlds, offering opportunities for innovation and experimentation.
For instance, during the Milan Fashion Week in 2022, Benetton introduced its metaverse store where visitors could engage with immersive experiences by scanning QR codes linked to gaming activities or discounts redeemable at brick-and-mortar stores. This showcases how traditional fashion brands are embracing virtual worlds as a platform for future shopping and brand interaction.
As consumers increasingly seek seamless integration between their digital and physical worlds, the logistics of delivery must keep pace with these evolving expectations. Fashion brands need robust fulfillment strategies that ensure orders reach customers within two to three days post-purchase – a timeline expected by 46 of global consumers.
Efficient warehouse management, automation technologies that maximize growth potential, and strategic stock levels are crucial for brands ming to meet these deadlines while also providing an optimal delivery experience. This commitment to fulfilling consumer expectations is the cornerstone of digital success in today's fashion landscape.
The fashion industry's transformation through digitalization is a dynamic process marked by innovation at every stage. Social commerce and the metaverse exemplify this journey, presenting opportunities for brands to enhance customer engagement through immersive experiences that bridge online and offline worlds.
To stay ahead of the curve, fashion leaders must harness technology, refine their digital infrastructure, and optimize fulfillment strategies to capture the essence of consumer demand in today's digital age. For those seeking partners to guide them on this transformational path, THG Ingenuity offers a suite of solutions designed to support growth across beauty, retl, FMCG sectors.
To embark on your journey towards growth through digital transformation, contact us today and explore the possibilities that awt at THG Ingenuity.
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