Luxury Fashion Takes on the Digital World: Top Trends to Watch in 2023 and Beyond
The fashion industry is no stranger to the latest trends, but in a world where digital technologies are making a big impact on the retail industry, high-end fashion retailers are discovering that when it comes to connecting with customers and boosting their bottom line, tech is chic. From big data and new apps to powerful platforms and sleek solutions, digital technologies are making it easier for luxury fashion brands to connect and learn about their customers, implement sophisticated inventory management strategies, and optimize omnichannel efforts. In this article, we’ll explore the top digital trends in luxury fashion to keep your eye on in 2023 and beyond.
You Can’t Spell Fashion Without AI
The use of AI in fashion is rapidly increasing. Data analytics and centralization, hyper-personalization, micro-targeting, inventory management, and customer service all require AI to effectively scale and deliver at the level expected of luxury retailers. Cutting-edge solutions in AI are proliferating providing opportunities for fashion brands to track customer journeys and match customers with the right products, monitor inventory, forecast trends through data, and predict customer behaviors and preferences. AI is dictating the future of fashion and we can’t wait to see what it brings to the table.
Keeping It Real
In an ever-evolving world where authenticity is everything, new digital tech advances are game-changers. Tech that records and preserves digital identity has a myriad of applications as a transparent, traceable, and efficient tool in the retail supply chain. This provides the possibility to follow products and supply chains by creating a physical-digital link that records every stage of production leading to improved sustainability and increased brand sentiment. Organizations can prevent counterfeit goods, identify the last party to gain custody of the product, track new merchandise shipments, and advertise exclusivity to consumers by capitalizing on a transparently finite supply.
Know Your Audience
With 80% of luxury fashion retailers revenue coming from 20% of their customers, it’s critical to maintain strong connections with your customers and have a nuanced understanding of their priorities and preferences. Social media and mobile applications play an important role driving a diverse range of new apps to connect to consumers in new ways. This inspires micro-targeting and hyper-personalization for limited releases and exclusive offers. Cutting-edge platforms can glean customer info through facial scanning and sentiment analysis leading to new insights and enhanced customer experiences.
Intelligent Automation and Omnichannel Optimization
Gartner predicts, “By 2024, Tier 1 retailers in North America and Europe will reduce inventory carrying costs by 30%.” They’ll do it by investing in technology like intelligent automation (also known as cognitive or hyperautomation). Intelligent automation uses bots with decision-making capabilities to increase scheduling productivity and accuracy, evaluate the connectedness of task management, and automate end-to-end processes. Luxury retailers who adopt intelligent automation equip sales associates to serve customers more effectively by informing them about the location and availability of products (both in-store and online) and have access to when limited supply items or exclusive releases are expected. With details about individual customer preferences, sales associates can provide elevated and personalized service—a defining characteristic of high-end service in the luxury space. Sophisticated and transparent merchandising and inventory management are more critical than ever, especially when the global supply chain is chaotic and unpredictable.
The Data Dimension
The power of data is extraordinary, but the most sophisticated tech tools are only as good as the quality of the data collected. In the luxury space, the in-store experience remains a key piece of the data collection and utilization puzzle. Some innovative and impactful digital and virtual innovations are related to in-store data collection and the customer experience. That’s important because brick-and-mortar retail is part of a connected retail ecosystem, and brands are increasingly turning to digital/social media to track sentiment and provide incentives to third-party partners to share collected data. They’re also using sensors, computer vision and RFID technology to measure foot traffic inside and outside of stores. Some solutions can track conversion rates, monitor inventory, and read sentiment, leading to new insights that can enhance the shopping experience and improve the overall design of the store.
A Fashionable Future
Luxury retailers are finding it increasingly important to create a seamless experience across mobile, social media, web and in-store platforms. Investing in a diverse technology stack that benefits customers as well as retailers builds positive brand associations and allows you to cater to personal profiles and purchasing habits, with tailored products and store experiences designed just for them. Given the clear importance of emerging digital technologies in the luxury fashion space, retailers would be wise to prioritize education about the tech innovations available to them.
For decision-makers, evaluating which tools make operational and financial sense for your brand begins with determining how well a solution enables you to:
• Learn more about your customers
• Implement sophisticated inventory management strategies
• Facilitate supply chain optimization
• Drive in-store engagement
• Create personalized customer experiences
• Support seamless omnichannel effort
If the answers aren’t clear, consider consulting with an experienced technology partner to assist you in selecting and integrating new technology in a thoughtful and strategic manner—or even creating a digital retail solution designed with your business objectives in mind.
Conclusion
The future of luxury fashion is undoubtedly digital. With cutting-edge solutions and innovation at an all-time high, it’s not hard to see why luxury fashion retailers are embracing the latest tech trends. From AI and digital identity to hyper-personalization, in-store data collection, intelligent automation, and omnichannel optimization, the key to success is to stay ahead of the curve and ensure that you’re meeting the evolving expectations of the luxury fashion customer. It’s a competitive marketplace, but with the right technology partner and the right approach, you’ll be sure to thrive in the digital world of luxury fashion.
