Technological innovations offer fashion companies an opportunity to not just better serve customers but also improve business efficiency.

In 2021, fashion companies invested around 1.8 percent of their revenues in technology, as per a McKinsey & Co report. By 2030, this investment is likely to surge to 3.5 percent. The growth will be mostly driven by the conviction amongst consumers that technology offers them a competitive edge over others.

The COVID-19 pandemic caused a sharp rise in consumers’ involvement with digital sales channels. It gave rise to new shopping habits, and a rising interest in gaming and virtual worlds. The pandemic also increased customers’ digital interactions with brands with almost 72 percent of customers interacting with brands online in 2021. In the coming year, consumers digital interactions are likely to stabilize at about 66 percent on average, says the McKinsey report. .

The report further shows, by 2024, over half of consumers’ digital interactions with brands would be powered by an AI-generated speech. Over 75 percent of enterprise-generated data would be processed by cloud or edge computing. By 2030, over 80 percent of the global consumers will have access to 5G networks,

According to the McKinsey & Co report, the cash flows of fashion companies that embed AI into their businesses models are likely to rise by 118 percent. Over the next three years, the key focus areas for fashion companies would include personalization, store technologies, and end-to-end value chain management

Five themes to help explore potential

Both McKinsey and the Business of Fashion believe, five key themes that could help the industry explore its potential and overcome challenges include metaverse reality check, hyperpersonalization, connected stores, end-to-end upgrade, and traceability first.

Check revenue opportunities with Metaverse: Fashion brands would have to generate sustainable revenue streams presented by growing consumer engagement with the metaverse.

Focus on personalization: Brands would have exploreto big data and artificial intelligence to offer customized experiences to improve loyalty amongst consumers.

Apps to enhance in-store experience: Fashion executives would have touse in-store mobile apps and microfulfillment technologies to enhance customers’ in-store experience.

Value chain integration: Brands would need to integrate their value chain to improve operational efficiencies.

Ensure traceability: Brands need to use traceability systems powered by traceability software and big data to trace the entire life cycle of their products.

Metaverse to boost revenues by 5%

One of the technologies that have made a deep impact on the fashion industry is metaverse. As per the McKinsey report, fashion companies that focus on metaverse innovation and commercialization are likely to generate 5 percent of revenues from virtual activities over the next two to five years.

Personalized digital shopping experiences would also be the key to success for many fashion brands in coming years. These brands can explore all advancements in AI, analytics, and cloud computing to move to hyperpersonalization.

More brands to invest in technological innovations

In the coming year, more brands are likely to invest in in-store functionality and experiences. They would use in-store mobile “clienteling” apps to ensure seamless operations for store associates. Robotics and stock optimization software can help brands and retailers operate physical stores as digital storesfor distribution and delivery operations and reducing fulfillment costs by up to 90 percent. More than 60 percent of fashion executives say, creating integrated digital processes throughout their organizations would be amongst their top five priorities for 2025.

Ariound 50 percent of the executives, add,traceability can help brands reduce emissions in supply chains. These brands could adopt a common data language to enable comparability, besides setting new labeling standards and tracking software.

The opportunities offered by technology to fashion are limitless. Industry leaders need to find out ways to adopt technology to boost creativity and operations in the sector.

Denim imports by the US increased by 37.55 percent year to date though March to a value of $965.32 million. The sourcing of blue denim apparel by the US from Bangladesh, Pakistan, Egypt and Turkey increased significantly while those two mainstays posted more moderate gains.

As per a Sourcing Journal report, Levi’s shipments from Bangladesh rose by 47.26 percent in the period to $196.26 million, Pakistan’s imports jumped 69.65 percent to $116.04 million and Vietnam’s shipments increased 41.42 percent to $107.03 million.

Imports by No. 2 supplier Mexico, surged by 15.9 percent to $168.6 million, and China’s imports increased by 25.12 percent to $89.95 million.

Imports from Egypt skyrocketed 132.21 percent to $55.59 million, while shipments from Turkey rose 58.23 percent to $21.81 million.

Asian manufacturers Cambodia and Sri Lanka posted first-quarter gains of 29.52 percent to $50.51 million and 33.92 percent to $17.14 million, respectively, while Nicaragua rounded out the Top 10 with a gain of 8.23 percent to $31.73 million.

In spite of growth being expected throughout the forecast period, sales of Western European bags and luggage are not expected to return to 2019 levels before the current year-end.

Sales of Western European bags and luggage recorded a major decline in 2020. The closure of non-essential bricks-and-mortar stores and travel restrictions were among the main COVID-19-related problems for the industry in 2020, and which were also in place across the region in 2021 as well, limiting the recovery in this year.

As per a Euromonitor Report, Western Europe accounted for 16 per cent of global sales of bangs and luggage at US$24.7 billion in 2019. The UK, France and Italy represented over half of regional value sales, with the UK posting a high CAGR of 6 per cent over 2014-2019, boosted by the strong performance of the luxury segment. In comparison, the regional CAGR was 2 per cent, which reflects the instability caused by currency and economic volatility. However, growth in handbags, backpacks and luggage in particular continued to boost the performance of the category.

Owner of Wrangler and Lee brands, Kontoor Brands has raised its outlook for 2022. The company now expects revenues to exceed $2.7 billion, increasing approximately 10 percent compared to 2021, and compared to prior guidance of a high-single-digit percentage gain.

The company now expects first-half revenues to increase in the mid-teens range compared to the prior year versus a low-teens range in previous guidance. Second quarter revenue, consistent with prior guidance, is forecast to be in the range of $640 million to $650 million, increasing 30 percent to 32 percent compared to last year.

Gross margin is projected to be consistent with the adjusted gross margin of 44.6 percent achieved in 2021. Kontoor expects higher inflationary pressures on input costs, transitory expenses, including freight, and adverse mix due to COVID lockdowns in China to weigh on gross margin. However, the benefits from continued structural mix shifts to accretive channels such as digital, ongoing cost saving initiatives and strategic pricing are anticipated to offset these higher costs.

Upendra Prasad Singh, Union Textiles Secretary has directed private master developers to incur 70 per cent of the cost involved to develop an integrated value chain in a mega textile park. The government has received proposals from 17 states for the PM Mega Integrated Textile Region and Apparel (PM MITRA) scheme or the mega textile park scheme, which will be developed with a capital of Rs 4,445 crore within a span of seven years up to 2027-28.

Among the states that have expressed interest include: Tamil Nadu, Punjab, Odisha, Andhra Pradesh, Gujarat, Rajasthan, Assam, Madhya Pradesh, and Telangana. The mega textile parks scheme will help India expand its textile business besides reducing logistics costs, opines Singh. Announced in the Union Budget 2021, the PM-MITRA scheme aims to make Indian textile industry globally competitive. The scheme will create world-class infrastructure with plug-and-play facilities, besides giving rise to exporters of global standards. The scheme will also enhance the overall income and uplift the quality of life of textile workers associated with the PM-Mitra scheme,

Researchers at the Agroisolab in Jülich and the Hochschule Niederrhein University of Applied Sciences, in western Germany, have accused sportswear brands Puma and Adidas of using Xinjiang cotton in their T-shirts. It has also accused Hugo Boss and German Outdoor wear brand Jack Wolfskin of making shirts using Xinjiang cotton while fashion company Tom Tailor has been accused of launching a pullover made from it.

As the Guardian, the US banned cotton imports from the autonomous region in north-west China last year. Several large western clothes brands and fashion brands also banned the use of Xinjiang cotton in their collection. In October 2021, Hugo Boss claimed all new collections are being developed in accordance with global standards. In 2020, Puma refused having any direct or indirect business relations with manufacturers in Xinjiang. In the same year, Adidas also refused having contractual relationship with any Xinjiang supplier.

Textile machinery manufacturer Stoll has launched a new collection of designer pieces tilted ‘Wonderful.’ As per a Textile Value Chain report, the new trends collection serves different areas of application that includes Stoll knit and wear® products in the new gauge of E 10.2 and in established gauges, such as E 7.2, The collection also displays Stoll -weave-in® and Stoll -ikat plating® techniques for creating novel patterns, display material usages and colour impressions. The collection offer customization in selected products via Stoll-autocreate®. The trends collection also includes a sustainable footwear fabric solution that was created in collaboration with renowned players in textile value creation.

Launched in March 2022, the collection was well-received by customers in Italy. A few customers also adopted the new pattern options contained there directly into their current collection, and ordered the necessary technical kids to convert their machines, as per Jörg Hartmann, Head - Fashion & Technology, Stoll.

Most listed spinning and textile mills in Bangladesh have seen a rise in Q3 profits as rising yarn prices gave a boost to apparel exports. However, business outlook for the current year remains unstable due to gas crisis, volatile cotton price in international market and a hike in global freight costs hike in the January-March quarter.

As per The Business Standard report, the Dhaka Stock Exchange lists 58 textile and spinning companies, of which 45 have published their third-quarter unaudited results. These results show, profits of 29 companies grew while seven companies saw a drop and and nine incurred losses.

The biggest gainers were: Tamijuddin Textile, Envoy Textile, Simtex, Shasha Denim, Square Textile, Monno Fabrics and Maksons Spinning. Anlima Yarn, Evince Textile and Stylecraft incurred losses, while they had recorded profits previous year. Profits of Aman Cotton, Alhaj Textile, Delta Spinners, ML Dyeing and Rahim Textile decreased in Q3 of fiscal 2021-22. The Export Promotion Bureau says, Bangladesh’s RMG exports increased 45 per cent to $11.52 billion in the third quarter through March, compared to $7.94 billion in the corresponding period of the last fiscal year. To keep pace with the growth in apparel exports, yarn makers revealed plans to invest about $2.5 billion in expanding production capacity by next year.

One of Europe's biggest fast fashion chains, Primark has decided to introduce sustainable farming methods to an additional 125,000 smallholder cotton farmers in in India, Pakistan and Bangladesh by the end of 2023. As per a Reuters report, the group's sustainable cotton program trains farmers to preserve biodiversity by using fewer chemical pesticides and fertilizers. It also lowers raw material costs besides improving yields and profits for the farmer. Owned by London-listed Associated British Foods (ABFL), Primark aims to increase the number of farmers in the program to over 275,000 by the end of next year.

The brand currently makes 40 per cent clothes from recycled fibers or more sustainably sourced materials. Almost all major brands are being pressurized to adapt sustainable supply chains and address the prevalent waste culture in the industry. Primark hopes to make a difference with its new initiatives.

To counter Nike’s shrinking sales Foot Locker aims to promote Adidas’ products in its retail chains. The retailer plans to triple Adidas’ sales of sneakers and other items at its stores. The two companies will target over $2 billion in retail sales by 2025, enabling Adidas to generate up to €100 million ($105.41 million) more in revenues this year. The collaboration will include product allocation and shared marketing spend. It will focus on key Orginals franchises including NMB, Superstar and Stan Smith.

The retail chain also aims to reduce Nike’s product share in its store from the current 70 per cent to 60 per cent in 2022. With more than 2,500 stores across the world, Foot Locker is a leading global athletic footwear and apparel retailer. Since 1975, the company has become an icon in the global street culture, sneaker scene and athletic lifestyle. Its longstanding collaborations with biggest brands enables it to offer the latest products to consumers.