Fashion has always been a playground for innovation. The acceleration of fashion tech today, responds to brands’ needs to upgrade their supply chain, rethink their digital channels and relationship with customers, while boosting their sales.

Once the preserve of luxury brands, disruptive innovation is now expanding into ready-to-wear, with customer experience as its focal point, from product design to marketing.

While millennials or Gen Z customers are looking for a new connection with labels and a sense of exclusivity. COVID-19 has highlighted the importance of reinventing the customer experience – with or without a physical outlet – and the need for brands to embrace change and innovation.

Fashion players ranging from LVMH – which has established its accelerator La Maison des start-ups at the heart of Station F – to fast-fashion players – all of them strive to develop the technologies that will differentiate themselves, internally or through partnerships with the latest tech start-ups.

New players, from D2C specialists to platforms, are also challenging incumbent brands. Not only by revolutionizing their products but also by offering new consumption patterns.

In this article, we have included several exciting fashion tech businesses to follow that support major fashion players reshaping their customer experience!

Product design – AI on the runway

What will be the ultimate fashion detail that all fashionistas will wear next year? Many designers would dream of having such a crystal ball. Paris-based start-up Heuritech is already collaborating with leading brands such as Louis Vuitton, Dior, and Adidas to help them capture early signals from fashion influencers and consumers. Using the power of AI and data to scan millions of social media images, the company provides a trend forecasting platform enabling brands to predict demand and trends more accurately, controlling their product launches and inventories.

Made-to-order: tailor-made clothes for everyone?

Fashion is known as one of the most resource-intensive industries in the world. As consumers demands change, sustainability, as well as personalization are notably becoming unavoidable trends for fashion brands. Hong Kong-headquartered start-up Unspun is ticking these two boxes. They create custom-fitted jeans using 3D scanning and robotics technology, collaborating with major industry players such as H&M. Customers can get a 3D scan of their body —using a phone app or an in-person Fit3D body scanner in Unspun facilities to generate their virtual customer avatar with 100,000 data points. Then, they select their desired fabric made from organic and recycled materials before Unspun uses their weaving technology, which reduces off-cut waste and delivers a unique pair of jeans.

Product discovery – Finding a needle in a haystack

While COVID has encouraged online shopping, consumers are often flooded with inspiration from social media, and might struggle to find their dream product among the overabundant online offering. Syte’s platform offers brands a first-of-its-kind product discovery platform; powered by visual AI (camera search), NLP (natural language processing), and hyper-personalization engines, claiming an average increase of 177% in the conversion rate of its clients. For instance, shoppers can upload their latest Instagram screenshots to find the closest matching product on the brand website.

Size recommendation engines – The end of fitting rooms?

With the increase in online shopping and ‘free shipping and returns’ offers; brands are consequently facing the need to minimize user returns while limiting overproduction and waste.

To improve the accuracy of original purchases, especially regarding fit, companies such as True Fit or ZyseMe are helping brands leverage their consumer data. They enable them to improve and personalize their customer’s shopping experience by guiding consumers to the products that best fit their needs and recommending the best size for them. Some brands have developed these capabilities in-house, such as Nike with Nike Fit, an app scanning shoppers’ foot to find their perfect pair of shoes.

AR and VR solutions – Replacing or augmenting in-store experience

Augmented and virtual reality solutions for retailers have improved tremendously over the last decade. While the first pilots looked like low-tech video games, they now enable brands to offer new experiences to their consumers. The start-up Obsess, which has collaborated with Dior, Diesel and Coach, enables a 360-degree VR reconstitution of flagship stores on their websites, and offers consumers a 3D e-commerce experience at home or in-store to visualize or compare products, thanks to AR. To revolutionize the in-store consumer experience, MemoMi has developed the Memory Mirror®, an augmented mirror enabling customers to try products virtually and get recommendations based on profile, style, and preference.

Supply chain – Tracing products origin and fighting counterfeiting

Following the global Fashion Revolution movement (#whomademyclothes), it has become increasingly important for brands to improve their transparency efforts.

Apps such as Clear Fashion provide consumers with a brand’s rating on criteria: environmental impact, working conditions, animal welfare, etc. Increasingly boosted by blockchain technology, these kinds of solutions improve the traceability of products from fiber to fabric, and empowers consumers to make more conscious and informed decisions.

Sweden-based TrusTrace provides traceability and sustainability solutions based on AI, Blockchain and IoT, to automate data collection from suppliers and help brands and customers understand the true cost of a product. Similarly, the Provenance platform uses blockchain certificates to verify where a product comes from and enables brands to highlight their sustainability efforts through stories for their consumers.

Needing to know a products’ origins also applies to the luxury industry as it is increasingly undermined (in terms of revenue and image) by counterfeiting. Start-up Entrupy, for example, uses artificial intelligence and machine learning algorithms to authenticate products, while the French company Cypheme attaches a unique tag to each product: a simple picture makes it possible to recognize this identifier with certainty and confidence.

Among supply chain innovations: protecting the planet while limiting costs for brands is Returnity. The start-up creates custom-designed reusable packaging for e-commerce (bags and boxes guaranteed for more than 40 shipments) using recycled and reusable fabrics.

New consumption models: from clothing-as-a-service to secondary markets

When it comes to new consumption patterns, it is impossible to overlook consumers’ interest in the $40 billion worldwide second-hand fashion market, and its main players Vinted or Vestiaire Collective. To enable brands to benefit from this trend and keep their customers engaged, Reflaunt offers brands an intuitive platform to connect to second-hand marketplaces. This enables shoppers to resale past purchases on the brand’s website and earn shopping credits.

Interestingly, the growth of the online clothing rental market, which could reach $1.9 billion by the end of 2023, is being watched by retailers. Start-ups such as the Berlin-based RE-NT, the American CaaStle, or the French Lizee, provide brands with white label e-commerce and logistics solutions to easily set up their clothing rental platforms.

The list of new fashion tech players obviously doesn’t stop here. This is only a small sample of what’s out there!

Webhelp created The Nest to work hand-in-hand with the startups that will shape tomorrow’s business landscape. This program dedicated to fast growing companies supports them in their customer experience development, through a dedicated approach enabling them to scale-up their CX dream team, quickly and simply.

In parallel, we collaborate with our community of startups and tech players around CX themes, through exclusive workshops, also offering them mentoring and business development opportunities throughout our partnership.

Want to learn more about how you can transform your brand using technology?

Register now for our upcoming fashion webinar.

Related articles:

The timeless ways fashion businesses can maximize growth

Why fashion businesses need to move from channel-first to customer-first

Three top tips for de-risking your fashion brand’s B2B channel

For years, consumer brands have promoted omnichannel strategies as a ‘Holy Grail’ for attracting and retaining customers. Many believe that integrating sales, communications and tech platforms is a magic wand for generating sales and improving customer lifetime value.

But with bricks-and-mortar retail suffering and online direct sales skyrocketing, those who have succeeded in managing demand effectively were not necessarily those who implemented full-scale re-platforming and omnichannel transformations, but those who had a true understanding of their customers.

We have seen many brands – especially medium sized businesses – feel pressured into implementing or scaling ecommerce functionality as a way of pivoting around retail closures and lockdowns caused by COVID-19. There was panic and reaction – businesses scrambled to implement ecommerce strategies and manage influxes of online orders, as well as an exponential rise in customer service requests across multiple languages and time zones.

In our experience of working with over 50 global fashion brands, those who are most successful adopt a customer-first mindset. Using the same laser-focus that they use in their designs, to identify exactly what their customer needs and pain points are. There’s little debate – companies which are market or customer-focused are more profitable and enjoy better sales growth, customer retention and product success. That’s according to renowned global marketer, John Narver.

By adopting a customer-first approach, brands can ensure that any digital solution will meet customer needs. Fashion businesses often have an intrinsic understanding of their consumer – and have a real opportunity to truly connect with customers, understand their needs, and get ahead on the service proposition behind any future digital offer.

We see this play out within strategic, digital-first brands such as ASOS, which traded around 35% higher year-on-year, after combining an understanding of customers with a slick digital platform. In the 2021 State of Fashion report, McKinsey gives further hope, claiming that there will be another 20% annual digital growth during 2021.

What does a truly customer-first approach look like in practice?

With 3,000 professionals serving the fashion industry, we have seen that firms which marry customer understanding, data and analytics, see the best successes in maximizing brand profile, customer experience, and profits.

Most often, fashion brands come to us with the following needs in developing a customer-first approach:

1. Really get to know the customer – You wouldn’t design ranges for a customer you didn’t understand, and the same goes for designing service. Forget any assumptions you have made about your target customers, which can lead to a lack of understanding and a swathe of false and risky assumptions, which can be a fast-track way to waste money.

Data drives better decision-making, and the most advanced brands access millions of data points, collected in real time from across the whole industry – not just their own businesses – to inform next steps.

This approach also helps to solve another problem we often see in fashion – where C-level directors and business owners are not close to the critical customer data and insights collected by less senior colleagues. Leveraging this data effectively will enable businesses to become far better informed and make more intuitive, proactive, and predictive decisions.

Armed with data, you can then create personas built on facts, enabling you to build better customer relationships and personalize experiences based on real insights about their preferences, behaviors and purchases.

2. Understand the opportunities in your customer journey – In an increasingly complex sales environment, many brands need help to map out the whole customer journey. Visualizing the current experience through the end-to-end process, from attraction to selection, retention and upselling. This will help you to identify areas which can be streamlined, as well as opportunities for upsell and cross-sell.

3. Re-write what customer service really means – Move the contact center from being a cost center to a profit center which reflects your brand values through positive customer experiences, while supporting sales.

The smartest firms free up service teams to help customers to buy, not solve problems. This involves automating the maximum number of routine transactions and enquiries, enabling people to engage in personalized 1:1 conversations.

It also means listening to customers and giving them what they want. In a globalized industry like fashion, if someone wants to buy a handbag at 3am – let them to do that. Or, if they’ve bought a jumper from a collection – show them the rest of the matching collection or items that are seen with that look to ‘shop the outfit’.

For fast-growing firms, it can be difficult to recruit high-caliber customer service professionals to support these sales experiences effectively, particularly at scale. In our experience, the most advanced fashion brands tap into existing hubs comprising multilingual, trained call handlers to quickly achieve scale and ensure the highest standards.

4. Ensure organizational and operational support – Shifting to a customer-first approach is a strategic move that needs to be supported operationally within your business. You will need to scale, transform, and ramp up rapidly and efficiently to support customer demand. You may need support in changing your organizational structure.

5. Optimize commercials – While we strongly advocate putting the customer first, there’ s one caveat – it has to be commercially viable. Many firms need to balance their brand promise, meeting customers’ needs, and ensuring they make a profit.

For some, shifting to e-commerce has not been a lifeline pivot – it’s actually increased the cost to serve significantly. We help brands to develop a commercial strategy, which might include having to say no.

6. Create a frictionless user experience – Customers have high expectations, and demand a quick, slick, frictionless experience. Nearly half of us won’t wait even three seconds for a website page to load, according to Dynatrace which monitors IT performance. Eliminate poor websites, glitches, payment issues and bugs within apps to minimize frustrations and retain people on site for as long as possible to maximize spend.

7. Future-proof solutions to avoid constant cycle of change – Without care, digital offerings can become an area where you can waste money in rapid time.

In previous roles, I’ve seen firms spend millions on IT platforms which become obsolete almost the moment they’re finished because the industry is moving so fast. Another common issue, is brands which implement technology for technology’s sake.

There is never a good time for a ‘white elephant’ IT project. But now, with all the unique challenges presented by COVID-19, it’s a particularly bad time to drain your business’s time, money, and team morale.

By implementing a customer-focused technology approach, you can deliver a digitized solution that not only saves time, effort, and money – but also positions you ahead of the competition for business growth.

Thinking customer-first helps you to invest in the areas where you and your customers will derive the most value. Not only will this enable you to be both more effective and efficient in delivering your customer experience, with some irony, it’s probably also the best way to deliver the optimum omnichannel experience in the long term.

Interested in how you can switch up your channels and restyle your customers experience?

Register now for our upcoming fashion webinar.

Read our article series:

Three top tips for de-risking your fashion brand’s B2B channel

The timeless ways fashion businesses can maximize growth

It’s no secret that the fashion industry has endured one of the most challenging trading years in its history due to COVID-19, with shop closures and the seismic shift from bricks and mortar stores to digital selling.

In fact, the 2021 McKinsey State of Fashion report talks of a ‘Darwinian’ shakeout of firms that were weak before the pandemic, while stronger players will be emboldened.

In our experience, supporting the growth of 50 global fashion brands, we see that the strongest firms are evolving their service centers into profit-making entities, geared towards supercharging customer satisfaction while systematically driving up sales – not just solving problems.

Many of the world’s largest fashion brands recognize that customer experience isn’t their raison d’être. They understand they can benefit from external expertise to help them solve critical challenges in this area – such as spotting trends and patterns in data, shifting to new technologies, or engaging always-on, skilled, flexible, and multilingual teams which are passionate about delivering excellence for brands.

These leaders who had the foresight to see that their customer service teams were an asset in waiting are also the same leaders working with us to redeploy skilled people from solving problems to driving sales.

And so, in the middle of a strategic and fundamental business transformation, during a global pandemic, they can remain laser-focused on their core mission – creating the very best clothing collections for customers.

It could be like this for every fashion business. There is still enormous strategic and commercial opportunity to reposition customer service and experience, not as a ‘nice to have,’ but as a function that adds real value to customers and brands’ profitability.

For example, we re-engineered and digitized the customer service center of a luxury fashion client. This resulted in 50% of contacts being deflected into automatable digital channels and a 26% reduction in inquiries tracking orders. We also eliminated warranty claims, which had driven 40% of references to the center.

Operational efficiencies rarely ever hit the headlines – but at a watershed moment for the fashion industry, we believe these numbers can spell the difference between success and failure.

So, what’s new?

The pandemic super-charged online shopping, with e-commerce’s share of fashion sales almost doubling in eight months – from 16% to 29% globally, according to McKinsey’s 2021 State of Fashion report.

But with technology developing at pace, simply having the right platforms isn’t enough. The report also discusses the urgent need to give customers the best possible service and experience at a time that could still make or break scores of fashion businesses.

Three features for optimal customer service and experience:

1) Ability to deliver rapid change – Global fashion brands realized they couldn’t deliver rapid strategic change at scale – so they outsourced scalability projects to Webhelp. In return, they got immediate access to a multilingual team of 3,000 skilled and flexible colleagues who deliver a diverse range of customer services, leaving brands to focus on what they do best.

For example, when delivery problems suddenly hit Greece on Black Friday, we used our proprietary talent selection approach to help one global brand source skilled multilingual expert team members, who managed everything from an influx of customer service inquiries problems with logistics and deliveries. This agile approach created a flexible workforce that could optimize service during challenging market conditions in the lucrative run-up to Christmas.

2) Commitment to turn cost centers into profit centers – The smartest brands invest in automation technologies to help customers ‘self-serve’ problems online. For example, one fashion client recently introduced chatbots as part of a customer journey redesign and saw the average order value rise by 20% and customer engagement rocket from 2% to 30%.

This approach frees up agents to engage in personalized conversations with customers, aimed at showcasing options and increasing sales.

3) Deliver customer experiences led by multimedia, and interactive content – Digital traffic to the websites in the top 100 European brands surged by 45% in April last year compared with the previous month, according to McKinsey.

Simply providing a flat, copy-led website won’t be enough when brand leaders are using tech to push the boundaries of customer experience:

• Video – When Shanghai Fashion Week went virtual and was live-streamed last year, it drew 11 million viewers with $2.75m worth of clothing and accessories sold directly to consumers. In China, live stream revenues hit $138bn last year due to lockdown – up from $63bn the year before. Meanwhile, in the US – live stream revenues are forecast to reach $25bn by 2023.

Brands like Zara experiment with video – customers who buy via their app can create a personalized video to send with a gift from the store.

• Social media – Social media platforms – particularly Instagram – have configured their apps in a way that allows customers to buy direct from stores without leaving third-party sites. This marked a significant boost for fashion companies, which effectively gained another sales channel.

Brands should also continue to maintain strong conversations and relationships with customer communities via traditional platform activity. Again, advanced firms often trust us to deploy 800 people, speaking 20+ languages to manage this – with high rankings from NelsonHall – one of the world’s leading analysts in this area.

• Technology – We also see several fashion brands racing to offer or improve existing online sizing tools to maximize customer satisfaction and reduce the massive amount of over-ordering and returns. Consumers have also shown significant interest in scan technology – typically smartphone apps that carry out 3D-body scans and supply accurate measurements to make online clothes shopping more manageable. An obvious example is ASOS’s See My Fit tool, a big hit with its customers.

Also, augmented reality (AR) continues to advance. For example, Dior has embedded AR filters within Snapchat to enable customers to ‘try on’ sneakers, hats, and other accessories. Meanwhile, Burberry’s AR shopping tool lets customers ‘embed’ or 3D-view products within their environment.

There’s no doubt that transforming customer service from a cost to a profit center marks another significant challenge for fashion businesses. But in a cut-throat market, the bravest course of action for many fashion businesses could be to work with partners who can help them reach their potential in 2021 and beyond.

Want to learn more about how you can adapt your business strategy to maximize growth and become a key player in the market?

Register now for our upcoming fashion webinar.

Read our article series:

Why fashion businesses need to move from channel-first to customer-first

Three top tips for de-risking your fashion brand’s B2B channel

If ever any sector has demonstrated a determination to survive and thrive through adversity, it’s fashion.

COVID-19 has hit the $2.5 trillion fashion industry hard – forcing the closure of stores across the globe and hitting revenue by around 30% year-on-year in 2020.

The pandemic also triggered a rapid and urgent acceleration of e-commerce, omnichannel selling, and digitization, with omnichannel shoppers spending at least 34% more than their offline counterparts, according to The State of Fashion 2020 by McKinsey.

Meanwhile, the B2B fashion sector – including wholesalers, resellers and e-shops – has also gained a renewed criticality: the opportunity to sell hundreds of thousands of items in bulk and keep inventory (AKA cash) moving has never been more vital.

In total, 82% of businesses fail because of poor management of cash flow. So, for all the consumer- facing tech in the world, getting paid on time by using the correct business processes and human interactions, remains the best way to ensure cash flow and financial stability in the long term.

The fashion brands which will excel are those that see COVID-19 as a catalyst to manage risk – ramping up resilience planning and reviewing and adapting payment strategies ahead of new restrictions and consumer shifts.

But many executives tell us they are exhausted after an unforgiving year. They recognize that now is the time to focus on their core business – adding value and supporting competitive advantage.

Our team of 3,000 professionals speak 25 languages, and serve 50 of the world’s leading fashion brands operating in 35 countries. This includes providing outsourced credit management services for the wholesale channel from our regional hubs.

By removing these immediate pressures quickly, brands can achieve a rapid return on investment. This combination of human expertise and technology is key to success.

In our experience there are three keyways for fashion firms to balance their positioning, profitability, and cash flow managing their wholesale channel:

1) Build secure relationships using data – At a time of unprecedented risk of collapses within wholesale and retail, it is vital that mid-tier firms use data to drive robust decision-making on risk management, pricing, and payment strategy.

Many brands currently use a mix of credit insurance, external financial scoring, and access to their own data to underpin strategies. But many of these methods are no longer sufficient or fit for purpose, at a time when guarantee coverage is low and trading conditions can change almost by the hour.

We manage relationships with 35,000 points of sale across the world, to collect live data from across the fashion industry, analyze the numbers, and report back anonymized data to clients every day to inform their decision-making. We collate these insights about potential risks into our screening processes, analyzing client’s retail portfolios and making real-time recommendations (payment methods, payment terms, etc.) to enable everyone to make quick and robust decisions to develop a safe business.

This enables brands to gain much better visibility and insight to protect themselves proactively from potential payment issues which may arise in the future.

There is no way to completely remove risk from any business, but ‘prevention is better than cure’, and the more insight you have about buyers, the better you can protect and adapt your business.

2) Support Global Growth – The wholesale fashion industry has shifted from being 5% online to 30% online. As such, brands are managing an increasing number of sales channels including multi-brand and department stores, resellers, and e-shops.

This rapid change is compounded by an increase in the level of complexity faced by fashion businesses when developing their buyer network across multiple regions and channels – all with different laws, rules, systems, languages, processes, and payment terms. Without care and engaging with multiple industry stakeholders, it’s easy to be caught out – for example, making mistakes on declarations, invoices or process implementations, which your client would then recharge to you.

To get this right, you either need to create your own multinational multi-skilled team, or tap into an existing network of professionals who understand and advise on how to navigate regional customs, payment methods, specific channel processes and interdependencies within a fragmented and complex landscape of countries and clients’ specificities. Experts can also help you to implement new systems and processes covering all new and existing trading areas.

3) Negotiate payment terms – It has perhaps never been so attractive for brands to optimize trade with wholesale buyers – selling hundreds of thousands of pieces in a single transaction.

But like D2C, the B2B fashion industry is also facing new risks.

First, there is a financial squeeze, as retailers who urgently need to add mark-up and ensure profits urge wholesalers to seek discounts.

Then there’s an increased credit risk. Before the pandemic, the majority of fashion brands relied upon credit insurance to protect their stock and profits, knowing that insurers would indemnify them in case of clients’ payments default. But since COVID-19, insurers have dropped the level of coverage by around a third – putting much more orders at risk.

Without careful management, this combination of discounts, together with significant falls in consumer spending on apparel and reduced cover, could result in massive inventory build-ups.

Fortunately, it has been recognized that ‘one issue affects all’ – in an industry as interconnected as fashion, and stakeholders have worked collaboratively to implement a pragmatic response.

Many key resellers and wholesalers have increased payment terms from 30-60 days, which has been widely accepted by mid-tier fashion brands. Meanwhile, the bounce rate on payments has remained relatively steady at around 1%, despite all the challenges.

It is vital that fashion brands recognize this measured approach in any discussions with B2B buyers, and negotiate terms in a way that offers a win/win on financial security for buyer and supplier.

We recommend engaging a team of professionals focused on providing end-to-end credit management services, from order to cash, to support your domestic and international markets. This includes matching your sales and finance strategies, automating financial processes whenever possible, transforming fixed costs into variable costs, negotiating payment terms, brokering the best credit insurance for you, and collecting receivables as quickly as possible to ensure cash flow.

This combination of people, processes and tools enables you to remove a significant amount of hassle, set the right levels of risk to boost a sustainable business, and secure your sales using best practice in credit management.

Looking ahead

The fashion industry went through a ‘perfect storm’ of challenges in 2020. But the hard truth is that 2021 is set to be just as tricky, with a likely global recession, and continued fallout from COVID-19.

Brands which balance their positioning, profitability, and cash flow will be best placed to realize the potential of brighter days ahead.

Interested to learn more about how we can help you adapt and refocus your payment strategies?

Register now to our upcoming fashion webinar

Read our article series:

The timeless ways fashion businesses can maximize growth

Why fashion businesses need to move from channel-first to customer-first