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How could the fashion industry change within the next decade?
As a decidedly non-fashionista, there’s a few major trends that I’m excited about.
First, I think consumers are becoming more conscientious about the absurdity of the “fast fashion” trends popularized by retailers like Zara and H&M. For what it’s worth, fast fashion refers to business models that are optimized to:
- Inspire changing designs, looks, and trends in the fashion industry
- Leverage supply chain efficiencies (often taking advantage of cheaper labor costs in the developing world) to produce trending items in bulk, produced with a quality to last 0.5 – 2.0 years
- Leveraging a vast distribution network (e.g. H&M’s 3,000+ retail outlets) to push these products from the catwalk to the store as quickly as possible
When this process is optimized, fast fashion retailers can stock the latest trendy items in as little as two weeks from their appearance on the catwalk:
Fast fashion is designed to encourage consumerism. Fast fashion is designed to inspire trendiness and affordability at the expense of quality and sustainability. But.
So in the context of fast fashion, I’m excited about:
- Conscious consumption: Ultimately, the biggest reason why consumers like fast fashion is price. But there’s ways to get the same low prices at higher levels of quality (and sustainability) that fast fashion allows. , and I think this will grow with time. Consumers are also increasingly conscious of the labor conditions of fast fashion manufacturing facilities and the environmental consequences of fast fashion, and I think this pattern will accelerate with time.
- Collaborative consumption (also known as the sharing economy): About . The recent successes of Rent the Runway in the US and Designer-24 in the Middle East in providing high-quality luxury dresses from name-brand institutions for one-tenth of the retail price is outstanding. One pithy summary is: it’s a “ .”
Another trend I expect to see is de-consolidation of the fashion industry.
I’m going to use Warby Parker as a case-study here. The global incumbent in the eyewear industry is Luxxotica, which owns more-or-less the entire eyeglass value chain. It owns retail outlets like LensCrafters and Sunglass Hut, operates Sears Optical and Target Optical, and owns brands like Ray-Ban and Oakley. Its near monopoly enabled .
Then Warby Parker comes along, and it doesn’t play by the incumbent rules. It sells directly to consumers through its online channel (later its own stores), bypassing traditional retail outlets owned by the Luxxotica group and minimizing operational costs. It in-houses its frame manufacture and assembly, so as to be in control of its own supply chain and avoid the mark-ups of its Luxxotica-controlled counterparts. All these optimizations helped Warby Parker pass savings along to consumers,.
Dollar Shave Club actually did something very similar, helping end P&G’s / Gilette’s near-monopoly on the market. But I think given the global consolidation of the fashion industry and changing consumer preferences, we’ll see many more waves of disruption in the coming years.
A final trend I expect to see more of is omni-channel commerce and virtual / augmented reality become increasingly significant.
“Omni-channel” (US) or “online-to-offline” (China) are becoming increasingly common buzzwords in investor circles. I think that some online-first retailers such as Warby Parker, Bonobos, and Amazon have realized that online shopping should complement offline experiences, not replace them outright. Some recent phenomena in the shopping world that demonstrate the co-dependence of online and offline include:
- Shoppers are looking to discover items online, and buy them offline
- Shoppers are looking to discover items offline, and buy them online in-store
- Shoppers are posting images/selfies of interesting clothing items on social media, or messaging pictures of items with their friends in-store, to help decide whether they want to make a purchase
- Shoppers are ordering items online, and picking up items in-store (click-and-collect)
You get the idea. Online and offline experiences are incredibly interlinked, and I think we’ll see more of this in the coming decade. I also think there’s tremendous potential for virtual reality to continue to inform consumer purchasing decisions, as John Lewis is doing with its StyleMe virtual mirrors.
I think the end result of these trends will be:
- Greater access to affordable yet trendy / high-quality fashion items
- Overall greater sustainability in the industry
- Greater opportunities for consumers to interact with brands, online, offline, through social media, through virtual reality, etc.
So even for someone like me, who is not a fashionista, I think there’s plenty to look forward to from the fashion industry in the next decade.