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The fashion e-commerce market has been growing steadily in the past few years accounting for USD 371billion or 21% retail sales of apparel and footwear globally in 2019. But as most of the world is experiencing self-isolation and lockdown measures, the coronavirus (COVID-19) crisis is pushing brands to digitalise even faster to survive, engage with customers, designers, manufacturers, and redesign their supply chain operations.
In that context, we sat down with Pinar Dincer, Head of Fashion at Intelistyle, to discuss the near future of fashion and how industry players can up-scale their digital platforms.
Founded in 2017, London-based Intelistyle helps fashion retailers increase revenue and cut acquisition costs with fashion specific personalisation. Its AI optimises conversion, Average Order Value (AOV) and repeat purchase rate by understanding a customer’s styling preferences and suggesting the right products and outfits for them. Recommendations are tailored to the latest regional trends, as well as the customer’s body type, colours, desired occasions and personal style.
What are the origins of Intelistyle?
Kostas Koukoravas, our CEO & founder, and Michael Michelis, our COO & co-founder, started the company to solve a personal need – to style clothes in their own wardrobe and find new clothes that match. They leveraged their experience in machine learning and big data to address the growing needs of customers looking for fashion advice.
Helping retailers deliver exceptional personalisation and customer service, Intelistyle uses AI technology to extract the essence of style from real world fashion photography. It then helps retailers better serve their customers at each experience touchpoint. Retailers use this AI to supercharge their customer service team online or in store through clienteling solutions. Others use it for product recommendations on web, chatbots, CRM and smart mirrors. Intelistyle creates an omnichannel style profile allowing retailers to learn about each customer by engaging with them across online and in store and then deliver an outstanding customer service that helps to increase conversion and basket size.
Before the pandemic outbreak, consumers were increasingly online shopping for apparel and footwear, as they searched for greater convenience, novelty, and personalisation. Consumers were also increasingly preferring experiences over objects. Do you agree these consumer behaviour trends are shaping the fashion industry? How are these going to evolve during and after the COVID-19 outbreak?
They are key trends that will have a growing impact on fashion, and many other industries. If anything, the store closures and restrictions are accelerating these consumer demands. Now is a crucial time for retailers and brands to invest in technology that transfers the in-store experience to the online space.
The new online experience will have to mirror and further enhance the in-person elements of a physical experience. While customers understand delayed delivery times due to the current situation, what they won’t tolerate is bad service. This is especially true for luxury. Fashion retailers will employ technology to upskill their customer service teams in a fast and cost-effective way so they can serve more customers at improved service quality with their existing teams.
Live shopping – already a rising consumer trend in China before the pandemic – will become more widespread across Western markets. Conversational commerce on platforms, such as WeChat or WhatsApp, will be a key channel for brands to create a genuine connection with customers. Combining the convenience of asking a friend for style advice with the luxury of having your personal stylist.
Moreover, VR will take the spotlight even sooner than we expected. On a customer-facing level, this will take the form of virtual fitting rooms. On a supply chain level, this will be virtual buying practices as well as virtual trade shows. We will keep seeing a lot of key industry events go virtual. Announcement of the first digital London Fashion Week is a perfect indicator of this transition.
Lastly, self-isolated customers are more sensitive and anxious, and belonging to a community has never been so relevant. Brands that have managed regular communication with their customers, not trying to push for a sale, but showing genuine concern for their customers’ wellbeing and positioning themselves as helping the wider community will be in a stronger position. We expect post-pandemic customer loyalty to stick with the brands that stood with them and have been transparent throughout these exceptional times.
From a supply side, most of the world’s textile and footwear production is in Asia and China, where production plants have closed in early 2020 and orders have been cancelled affecting vulnerable textile workers. How do you see the impact the fashion industry in the future?
First and above all, it is important to remember that COVID-19 is a global humanitarian crisis. The forced shop closures and cancelled orders are putting the livelihood of millions of people at risk especially those of garment workers in sourcing markets like Bangladesh, India and Cambodia.
Now, we are forced to step away from overproduction as dictated by the restrictions of the pandemic. We can take the learnings from this period and finally make the move to more sustainable manufacturing practices and greater collaboration. Sustainability not only encompassing environmental practices but other ethical considerations. This will be challenging, but we are already seeing some brands and retailers such as H&M, Inditex, Ralph Lauren, Adidas and VF Corp coming together with the International Labour Organisation (ILO) to elaborate a financial support plan for vulnerable garment factories and workers.
There will also be an ongoing supply chain disruptions. The supply chain model as we know it is collapsing and we can recognise this as the final wake up call to downsize as an industry. Instead of focusing on getting the maximum number of products to the market as fast as possible, retailers might choose to have a smaller number of better-quality products that are more relevant to their customer base and even experiment with on-demand production. Really knowing and understanding the needs of your unique customers will be a crucial step in targeted manufacturing. Moving towards local manufacturing is also a short-term solution that will likely turn into a long-term industry practice.
Retailers and manufacturers have more reasons to work together after the pandemic to rebuild a supply chain model that is ethical, circular and sustainable as well as profitable.
How can AI technology help fashion players during and after the pandemic?
Lockdown measures have accelerated the shift from physical to online retail, and now more than ever there is a need to create online experiences to provide similar levels of inspiration, discovery, and customer service as in-store. AI enables retailers to cost-effectively scale personalised online experiences, retargeting campaigns and communications to address the demand for that in-person touch customers crave, especially to connect with customers who preferred offline shopping despite being perfectly comfortable online before COVID-19.
AI fosters increased revenue uplift during the pandemic at full price, instead of relying on heavy discounting. We have already seen evidence of how successful this strategy can be backed by data. The revenue uplift from customers who engaged with online recommendations peaked during the COVID-19 lockdown for one client who is one of the biggest luxury retailers in Hong Kong & Greater China. This was an unexpected finding for us but serves to prove that customers reward the efforts to personalise their online experience.
The only way through this unprecedented crisis is by collaborating as an industry. Brands now need to uphold transparency to all stakeholders including employees, suppliers, consumers and society at large. This emphasis on transparency is likely to last, and the way retailers manage their response during the crisis will have a significant impact on their perceived brand identity and brand value post-COVID-19.
Technology can help retailers share insights and solutions as well as build the much-needed flexibility and adaptability from production to market, which will be crucial for fashion’s post-COVID future, as consumers will become more discerning with discretionary spending and favour brands that they feel connected to.
There is no question that the fashion industry will have to reimagine internal business structures, supply chain and the shopping experience both during and after the pandemic. AI technology will allow retailers to do that in a faster, more creative and cost-effective way.