How digitalisation is shaping the apparel industry
The European consumer market for apparel is changing fast, and so is the international supply chain. Manufacturers need to adapt to COVID-19 lockdowns, the rise of online shopping, stricter requirements on sustainable production, price pressure, rising shipping costs, and the demand for smaller orders and faster delivery. In many ways, digitalisation has a crucial role in this process.
One of the biggest differences between the world before and after COVID-19 is the difficulty for people to travel. It is difficult for consumers to go to the store and for buyers to visit your factory or a trade fair. Because of this, European consumption has moved away from physical retail to e-commerce. Trade fairs and fashion shows have gone online. And manufacturers have digitalised more and more communication with buyers.
Many physical trade shows have introduced a digital alternative. Some have gone completely digital, such as the online virtual trade show Innovate. The introduction of digital showrooms and catwalks has reduced the need to meet current or new buyers physically. This saves time and costs.
In design, 3D software has increased the speed of the approval process between buyers and suppliers. 3D tools help designers understand fit better, reduce quality issues, and eliminate the need to send samples back and forth for approval. Research by McKinsey shows that 83% of respondents believe companies will use virtual samples more often than physical samples by 2025. Also, since the COVID-19 crisis, companies using digital technologies outperform their competitors.
Digitalisation allows for more efficient fabric ordering and production planning. This helps with flexibility and speed. In a recent article in Drapers, Ismail Kolunsag from Cross Textiles talks about how his company invested in 3D design, which optimised the cutting process. The company also invested in an intelligent planning system. Ismail explains, “it talks to our enterprise resource planning system and plans all our processes within minutes using a special algorithm.” He adds, “increased digitalisation will be central to the post-pandemic future of fashion.”
Digitalisation and sustainability
Many manufacturers invest in digitalisation to reduce costs and optimise:
- production flow;
- flexibility; and
- speed to market.
But, investing in digitalisation is also beneficial for sustainability. No supply chain can improve its sustainability without measuring its impact. Digital technologies can monitor and improve working conditions. They can also measure and reduce environmental impact. More efficient production and waste management systems mean fewer inputs such as energy, water, raw materials and chemicals, and less wastage.
Digitalisation can also help manufacturers gain new insights into their end market. European brands and retailers now present their collections online in a freely-accessible public database. This lets you do your market research with a mouse click. Consultancies such as Edited track billions of stock-keeping units daily. Based on this, they offer advice about trends in garment styles, colours, patterns and descriptions.
Digital sales and promotion
The sales process of any apparel manufacturer can hugely benefit from digital sales data. Sharing sales information between buyers and suppliers is the ultimate form of digitally integrating the value chain. Constantly collecting and analysing real-time data on how apparel items perform on the end market allows manufacturers to optimise product development. It also helps with stock keeping, production and maximising sales and liquidity.
How to digitalise your business
Digitalisation does not necessarily require large investments in complicated software or machinery. The basic principle is using data to optimise factory processes. Try to track and monitor every cost item in your factory, preferably in a live cash flow overview. Focus first on information such as:
- the effective working time of your employees;
- the lead time and value of your stock;
- energy consumption; and
- purchasing conditions.
Once you have some insight into these areas, work on improving production flow and employee motivation.
Read our new study, tips to go digital for the apparel industry.
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FT Journalistiek wrote this news article for CBI.