From Designing to Marketing: Major Tech Trends Shaping the Future of Luxury Apparel and Retail

RFID, NFC, the Internet of Things and other disruptive technologies are riding the wave of the digital revolution in the luxury apparel market.
Published: September 29, 2019

This is the age of innovations. Technologies such as automation and virtual reality (VR) seem to have a Midas touch. From health care to marketing and retail, every aspect of every sector has evolved with the blessing hand of smart technologies. The luxury apparel industry is also riding the wave of the digital revolution.

Changes in consumer demands hit all retail sectors, and luxury brands are no different. The major brands, such as H&M, Uniqlo and Zara, had to force retailers to keep up with the evolving fashion business model. Moreover, fast fashion companies have established their brand by incorporating technologies to shorten the length of the fashion cycle and providing consumers with the apparel of their brands at an affordable price.

From department stores to luxury boutiques, the fashion industry has witnessed significant changes throughout the past few years. This sector is known as a hotbed for innovations, and emerging technologies, such as radio frequency identification (RFID), artificial intelligence (AI), augmented reality (AR) and virtual reality, the Internet of Things (IoT), and blockchain, have made significant changes in the glittering world.

These technologies have made the industry more personalized and convenient for users. AI and machine learning can take care of repetitive work. Earlier, the fashion industry was more reliant on human resources, but now robots have been widely accepted to manufacture apparel in completely new ways, considering the shift in user preferences. From robots that sew and cut fabric to AI applications that predict future style trends, technologies are boosting the growth of the luxury apparel industry in several ways.

Welcoming the Advent of RFID
The time for item-level RFID is here to stay as it differentiates itself and helps identify each unit or item uniquely. Adopting RFID tags is the most effective way of identifying grey market products and shoplifting. Apart from this, the taking of inventories using RFID technology is accurate to around 99 percent, unlike any other inventory-management method. As luxury apparel brands exercise strong control over their manufacturing and suppliers, the cost of RFID tags is almost negligible. Thus, instead of attaching RFID tags to a product in a retailer’s distribution facility, brands ensure the embedding of RFID tags in clothing, footwear and accessory products that can be achieved only at the point of manufacture. This helps deal with counterfeits and grey-market products.

NFC for Securing Authenticity
Near Field Communication (NFC) has made its way into the fashion industry, and brands consider it the most ideal investment. It combines a physical product with a secure digital application, which in turn creates a better brand experience. NFC does more for brand owners than link consumers to a website. It protects brands with digital authentication, uses location awareness to offer more useful information and increases consumer engagement. NFC tags use a unique digital profile to connect apparel to the cloud and leverage its dataset to improve the customer experience.

Personalization at Scale
Thanks to AI and machine learning, personalization at scale is now a reality. Although it is nascent in the luxury apparent market, it will be the norm within a few years. These technologies will be the key factor in driving recommendations, offering natural language search responses and building one-to-one customer relations. Apart from this, the incorporation of such technologies will help brands know the current trends and improve the user’s overall experience in both the online and virtual worlds. It is a simple formula: the company that figures out how to tie personal data with shopping habits will be the winner in the fashion industry.

The Advent of Chatbots
While people were speculating the advent of chatbots in the apparel world, the fact is, they have already arrived. For now, AI is being largely applied in the messaging space. Fashion brands such as Burberry, Tommy Hilfiger, Everlane and American Eagle have been experimenting with chatbots. Launching dedicated chatbots has been one of the major marketing campaigns so far. However, with the pace at which technology is developing, chatbots are bound to improve as they learn from every customer with which they interact.

Today’s generation turns to their smartphones for everything from buying clothes to making payments. Luxury fashion retailers are chasing the consumer’s desire to shop anytime, anywhere using smartphone apps and mobile payment options. With the help of real-time promotions and integrated return options, retailers have upgraded the consumer experience. Moreover, several retailers are incorporating push notifications and beacon technologiess to engage a larger online audience. For instance, the online luxury retail platform FarFetch was driven by the “Store of the Future” concept that enabled deep customer engagement through mobile, benefiting from pay-by-app option, digital wardrobes and social media marketing.

Blockchain in Retail
It is no secret that blockchain has a huge potential to change the luxury apparel ecosystem. The technology, which was primarily launched for virtual currencies such as Bitcoin, now offers retailers a competitive edge by ensuring safe data exchanges as represented in the digital data record. For instance, microchips connected to blockchain could provide customers with complete knowledge regarding whether the apparel they want is genuine or not, or from which materials it was made. In short, apparel embedded with blockchain would give unprecedented access to the history of the product via smartphone within seconds.

AR and AR Technologies
Artificial and and virtual reality technologies are rapidly being deployed across online luxury apparel platforms. Moreover, several startups have helped brands enter into the era of experimental shopping. For instance, retailers are now letting their customers view products in 3D and are using AR technology to let them access digital media about in-stock merchandise. Several luxury apparel companies have integrated VR and AP into their shopping experience by enabling customers to create personalized avatars with accurate measurements and according to their personality types and physical attributes. Additionally, shoppers can try on new garments and test their choice before purchasing anything with just one click on their mobile phones.

Alternative Material
Alternative material will be the most talked-about technology in the fashion world. During the Met Gala in New York, IBM and Marchesa worked together to manufacture a high-tech dress that would light up in response to the sentiments expressed in tweets. Now, after three years, advanced material technology has evolved and grown to create a new type of fabric. Furthermore, customers demand eco-friendly alternatives to traditional raw materials, including animal-free leather and waste-produced garments.

The wave of the digital revolution has offered the luxury apparel market more than just trendy garments and easy-to-purchase options. Moreover, technologies such as contactless shopping are expected to provide a further boost to the market. According to Allied Market Research, the global luxury apparel market is estimated to reach $81.23 billion by 2023, registering a CAGR of 3.9 percent from 2017 to 2023. For this colossal growth, rapid advancements in technology will be the most vital driver.

Swamini Kulkarni holds a bachelor’s degree in engineering and works as a content writer. She is deeply fascinated by technological advancements and the trending topics in the world. When Swamini is not glued to her computer, she loves to read, travel and spend time thinking about how she could read and travel more often.