Digital transformation has been on the agenda of Fashion companies for a few years now, however the changes that we can see in fashion companies to support the idea of digital-savvy fashion brands are still very few.
The elements at the heart of the digital transformation are:
- Customer centricity: fashion brands should build the experience around the customer journey;
- Near real time decision making: fashion brand should use analytics and business intelligence to make effective decisions rapidly;
- Management by objectives and non by process: every process should have a KPI to measure the results;
- Learn how to learn: companies should incentivate the ability to learn of their employees.
Some apparel, fashion, and luxury companies won’t survive the current crisis; others will emerge better positioned for the future. Much will depend on their digital and analytics capabilities. […] Although no one in the industry foresaw the intensity of this crisis, some fashion companies are finding that they are better equipped than others—largely because of their digital know-how.
McKinsey – Fashion digital transformation April 2020
Digital transformation of fashion, do we really need it?
Can fashion companies manufacture and deliver products to their clients without a fully digitised chain value? Can fashion companies survive without digital leaders in key roles of the organisation? I would say the answer is yes, or at least it was until the Covid-19 pandemic.
Before the pandemic crisis, fashion companies were able to carry on with their business as it had been done for the past 20 years or more. The supply chain was working well and integrated at global level, the distribution was developing with new form of traditional retailing experience and employees of fashion brands were working more or less effectively and happily in fashion companies.
Then all of a sudden the pandemic crisis has disrupted the majority of fashion retailing processes in a matter of weeks: supply chains from China stopped working, departments stores and shopping centres closed their doors and employees have been forced to work from home.
The acceleration of digital transformation
The pandemic crisis has accelerated a process of digital transformation that would have taken years to accomplish. However only some activities in the organisation of fashion companies can be actually digitally transformed in a matter of weeks. For example employees well accepted the change in their working habits moving from the offices to their homes, and companies and governments were happy and proactive to support this change by facilitating for example all the situations in which parents-workers were working from home and caring for their children at the same time. The supply chain instead was not ready to be digitally transformed and the production of samples and delivery of the collection was affected negatively by the pandemic crisis.
What really changed in a matter of days at the beginning of the pandemic crisis was the customer behaviour. Customer quickly moved from Bricks and Mortar stores to e-commerce websites. Whenever they had the need to purchase something during the pandemic they were able to get it online and delivered at their homes. Of course the needs were also different and therefore some product categories were penalised and some saw a surge of demand, for example home-wear and loungewear increased while luxury and travel accessories decreased.
The next steps in fashion digital transformation
The challenges ahead of us are unclear, but we can learn a few lessons from this crisis:
- Digital transformation needs to be happening in all activities of the value chain from product design to retailing
- Digital transformation needs to be governed by CEOs together with Cross-Functional team leaders
- The technological infrastructure of a company is a competitive asset and can determine competitive advantage
- Organisational models in headquarters and retail need to be flexible and malleable
- Analytical skills, Digital skills and People skills are essential to the success of the fashion companies
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