The digital disruption of Luxury

Innovations in digital technology have proved to be a boon for luxury fashion brands, showing immense potential during pandemic times.

The digital world has inter-twined with our real world! And how?

From a alexa or a siri giving company to lonely hearts, a music app advising us on what music to listen to & when; a google map showing us the shortest and fastest route to anywhere, our lives are completely directed and controlled by digital technology. In fact, our socializing has also become virtual!

Artificial intelligence seems to be giving our minds a well-deserved rest or perhaps making us a slave? And a lazy one at that? Digital disruption is for real – no business or human life is unaffected by the same. 2020 and the pandemic have simply accelerated the process. From robots replacing human staff, intelligent software replacing merchandising, and drones delivering our merchandise, will human touch be the new luxury?

In today’s world, the entire business cycle is intercepted by digital interventions. From AI based style, trend & product forecasting to robotic manufacturing to merchandise planning to predictive sales and customer targeting, the entire process seems to be digitally intelligent.

Where did it all begin? From a hesitant acceptor of the digital medium to today a digital innovation leader, luxury brands have come a long way. Innovative solutions came with evolution. AI, IOT, VR/AR/, Blockchain, 3D printing, mobile commerce. These terms have become a crucial part of the fashion and luxury industry currently experiencing significant transformations. 

Historically speaking, early technologies in fashion started to develop in the 19th century. The initial mechanical sewing machines used in garment factories, found its way into homes by 1889. By 1905, the electrically-powered sewing machine was in wide use. It was only in 1978 that the first computer controlled sewing machine was put into use.

By 1960, the world had access to 3D CAD. It was only around 2010 that designers started to use 3D printing in shows. The wow-effect was declared in 2010 when Iris van Herpen presented a collection of 3D dresses during the Amsterdam Fashion Week.

(Picture taken from www.irisvanherpen.com) 

If words like AI, 3D, VR/AR were extremely rare then, today almost every eminent designer wants to incorporate a part of it into its collection. Brand managers are competing in using advanced technologies.

Back in the 70’s, online platforms were not known enough. Indeed both consumers and producers were frightened of the same. In 1997, after a successful fashion show by Donna Karan, when a few journalists suggested to upload the photographs on the net, the designer rejected the request. The internet however continued its journey in abeyance. It is the launch of the first luxury / fashion retail ecommerce store called Net-a-porter in the year 2000, which began to transform the front end of luxury retail.

Likewise, the first use of robotics in fashion was displayed by Alexander McQueen in 1999. The idea was to surround a model in a white McQueen’s dress with two robots who spray-painted the dress during the fashion show.

(Photo taken from Vogue magazine www.vogue.com org. of the Conde Nast Archive) 

We couldn’t forget a Burberry digital revolution which completely changed a vector of the industry and made it a market leader and a pioneer in digital communications. It was in 2006 when Burberry’s new CEO, Angela Ahrendts, faced the challenge of fading identity of this iconic brand which was once well known for its fancy trench coats. To bring back control on designs, Ahrendts first appointed a “brand czar, Christopher Bailey, a techno-enthusiast who hired people from gaming companies and coders along with traditional designers. They figured that to talk to these 20-somethings, they needed to communicate in their language and that language was digital. They declared that they wanted Burberry to become “the first fully digital luxury company.” The brand started transformation with the idea to make an online experience identical to an offline channel. They were the first one who offered online videos and live-streaming as well as the first who created “Burberry Retail Theatre” in 2011 allowing customers to buy goods directly from the catwalk. 

Burberry continues its digital leadership in luxury to date. They are the first ones to have opened luxury's first “social commerce store” in Shenzhen, China. The new 5,800-square-foot store, launched in September 2020, allows its customers to access content and personalized experiences, and share them online.

Thanks to the GearVR headset bySamsung, in 2014 that Tommy Hilfiger became a pioneer in offering its customers to be a part of their “2015 Fall Hilfiger Collection” through VR. The aim of Virtual Reality is to offer an experience which has never been possible before. An opportunity to immerse its customers with exclusive moments of fashion in 360 degrees. 

To capture the all-around image, Hilfiger worked with WeMakeVR, a start-up, which used a special 3-D camera to capture an image with no blind spots. Credit...Chang W. Lee/The New York Times

Next, in 2017 the brand Coach made possible the use of VR in their US shops which provided full access to their shows with a stereoscopic sound. Additionally, the world of fashion has been actively using Augmented Reality. This helped to increase sales and improved experience proposed to the consumer. The first luxury brand which allowed its buyers to try-on products through a front-facing camera and choose the right color and shade was LVMH acquired Sephora. This innovative solution didn’t only allow to try various make-ups through introducing Virtual Artist but also led to higher revenues.  (Photo taken from modeavertising.wordpress.com)

The rapid development of the fashion and luxury industry led to the appearance of block chain technologies that are offering transparency and traceability for companies and its customers. The use of the block chain helps to protect International Property rights in the world of e-commerce. The first luxury players to adopt this technology were LVMH (2017) and the Swiss luxury watch brand Vacheron Constantin (2019).

At the front end, Dolce & Gabbana replaced its usual parade of millennial models with drones, which whizzed & hovered down the runway carrying fall 2018 handbags.

Drones at Dolce & Gabbana's Fall 2018 runway show. Photo: Imaxtree

While now these wonderful technologies play a vital role in the business cycle of any luxury brand, in reality just about 7 years ago, none of them was able to proceed beyond the basic conceptual framework. The House of Hermes recently announced that online shopping brings on 80% more profit rather than their boutique in Paris on 24 rue du Faubourg Saint-Honoré. Additionally the CEO of Gucci Marco Bizarri in the recent report of 2019 highlighted that around 40% of Gucci’s goods could be automated This definitely could lead to the decrease of high-skilled labor force and costs which can play a trick with the brand in the future.

Just imagine, based on data from yesterday, AI can analyse the data of tomorrow. In general, analysing fashion trends is not an easy task. One could never be sure and blindly trust AI data in predicting the trends. However, predictive analytics is helping consumers to make the right choice wrt correct combination of colours, styles suited to their personality and preferences. Additionally, AI based start-up like Dress-fit allow designers to sell 3D clothes. A 3D avatar is becoming a reality where in a customer could create his or her own avatar and dress him with clothes he could like. These 3D avatars can enter the favoured games developed by luxury brands like Ralph Lauren, Gucci and others. A virtual trial room can assist in choosing the perfect fit basis your 3D avatar.

2020 accelerated the adoption of digital technologies by luxury brands. In fact, with the help of innovative technologies and solutions, fashion and luxury industry survived through the lock downs. Virtual store walk through using zoom or other video based technologies; distance selling; on demand live streaming and virtual assistants have been ensuring a brand is able to service its clientele in more ways than one. The industry reoriented their business models to online sales and accelerated digitalization in order to ensure more sustainable development with the active use of information and communication technologies. Everything has changed in 2020, VR shows have become a reality for brands like Prada, Tissot, Hugo Boss and many other luxury brands due to lockdown’s all around the world.

However, virtual fashion weeks couldn’t fully replace offline. Perhaps, they could become an additional tool of communication as well as foster the development of the digital era. There is no denying the fact that we’re dealing with a Digital disruption or even Revolution. At the same time it’s hard to imagine virtual reality replacing the aroma, the feel, the touch and the experience of a glass of champagne while sitting on a velvet soft sofa in a boutique while choosing a scarf.

It’s all about a unique experience, attitude and understanding of the customer which the luxury industry has been building for decades. Nevertheless, these new tools are developing and trying to transform the impossible to understandable, acceptable and incredible. Surely, the future of luxury is inseparable of technological innovations. This bond no doubt has immense potential.

 Parts of the above research based article was published by Fibre2Fashion in the February 2021 issue and can be read at www.fibre2fashion.com.