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How the Fashion Industry is Embracing Digital Transformation
As the global fashion industry anticipates a $1 trillion revenue milestone by 2025, what factors are driving this growth? And in what areas are fashion brands investing to secure their place among consumers who increasingly prefer immersive digital experiences?
October 26, 2022
Guilia Gallo
Content Outline:
How the Fashion Industry is Embracing Digital Transformation
The Rise of Social Commerce
Connecting with Consumers in the Metaverse
Fulfilment: The Key to Digital Success
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As technology innovations reshape consumer expectations, the fashion industry has responded by investing heavily in digital transformation. Brands now allocate between 3 and 3.5 of their revenue towards technology up from 1.6 - 1.7 in 2021, as ecommerce revenues are forecast to reach $1 trillion by 2025.
Let's explore the key investment areas driving this digital transformation and how fashion is evolving with consumer demand:
The Rise of Social Commerce
The global social commerce market, already valued at $492 billion, is set to grow three times faster than traditional ecommerce, reaching $1.2 trillion by 2025. Fashion and apparel are poised to be the fastest-growing category in this market.
37 of fashion executives see social commerce as a major factor impacting their business strategies for 2022. This shift is driven by Gen Z and millennials seeking quick, convenient shopping experiences that align with their values. Social commerce provides these consumers with enhanced discovery opportunities and seamless integration between content and ecommerce, fostering deeper connections.
Fashion buyers are leveraging social media platforms for recommations from influencers they trust personally or share common interests with. Brands are now building comprehensive ecosystems of influencers, platforms, and marketplaces to capture data insights that enhance customer experiences.
Connecting with Consumers in the Metaverse
The fashion industry is increasingly prioritizing investments in the metaversea digital realm where physical boundaries blur into the virtual space. Early steps towards a phygital physical-digital experience have already been observed through VR and AR technologies, enabling real-time outfit try-ons on smartphones or tablets.
Gucci's AR feature for sneakers showcased this innovation by allowing customers to virtually preview their purchases before committing to an order. Marketers see the metaverse as a platform for experimentation and innovation that connects brands with consumers on new levels while elevating brand value.
As anticipation builds among both businesses and consumers, the metaverse offers potential for unique consumer experiences through gaming and social interactions that integrate physical store offerings with digital platforms like QR codes for additional in-store benefits.
Fulfilment: Enabler of Digital Success
Despite the emphasis on immersive digital experiences, fashion consumers still expect their purchases to be delivered swiftly and efficiently.
Consumer expectations have escalated, with 46 demanding delivery within two to three days post-purchase. This has driven brands across sectors to invest in warehouse space, inventory management, and advanced automation technology for maximum growth potential.
Optimized fulfilment solutions are the backbone of digital success, from the initial order placement to final delivery, bridging the online-offline gap.
The Future is Digital: Fashion Industry Transformation
Digital transformation is reshaping the fashion industry as consumer expectations evolve. Brands that innovate in areas such as social commerce and the metaverse can craft unique customer experiences that set them apart.
From social media-driven discovery to immersive metaverse interactions, fashion businesses are at the forefront of this digital revolution:
The examples provided highlight how fashion brands are embracing digital transformation to drive growth:
To join the ranks of these pioneering companies, contact THG Ingenuity today. Accelerate your business growth with our comprehensive suite of commerce solutions.
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