Think Tank: How AI Can Power the Future of Fashion

Arthur Zaczkiewicz, Jill Standish and Vish Ganapathy

Updated Thu, December 27, 2018 at 5:30 AM UTC

Fashion retailers know about the value of dedicated followers. Today, these brands may need to get on-trend themselves, for the artificial intelligence revolution sweeping through so many sectors of commerce has the potential to utterly transform their businesses.

The advance of AI — computer systems that can learn for themselves and carry out tasks that were once the preserve of humans — has partly been enabled by increased processing power and innovation in the development of algorithms. But, even more importantly, the pools of data that AI depends upon to do its learning and make smarter decisions are larger and more diverse than ever before.

The fashion sector, with its extraordinary depth of consumer and market insight, has access to some of the biggest data sets in all business. And, while some fashion executives are uncomfortable with the suggestion that an industry built on creativity and imagination can be digitalized or automated, this could be said to miss the point. The promise of AI for fashion retailers that can marry creativity with digital innovation has a powerful competitive edge.

We need to approach AI not just as artificial intelligence, but augmented intelligence, implying that AI can help augment the human thinking process by creatively stripping away the more mundane tasks that can often be automated, elevating our designers, merchants, marketeers etc. to focus on higher value decision-making that can move the needle. Thus the question we need to ask is not “Can AI become my fashion designer?” The more appropriate question is “What aspects of my fashion designer’s tasks, if augmented via AI, can help them do more creative work?”

Powering productivity and creativity

Some AI-enabled gains will be found in the processes that drive the fashion sector, with smart technologies powering greater speed, lower cost and increased flexibility at each stage of the supply chain. AI has the potential to drive improvements in areas including forecasting, capacity planning and merchandising, as well as in production automation and delivery. Consumers will be the ultimate beneficiaries, enjoying improved product availability and accelerated fulfillment.

Yet AI can do more than simply help fashion businesses to work more efficiently — valuable though these gains will be. It can also support the creative process itself.

The fashion industry’s digital leaders are already employing AI to augment their design skills and enhance their product development processes. AI tools enable companies to sift through consumer data to understand, in far richer detail, which product features their customers are likely to prefer.

Take the e-commerce giant Amazon. It is on the verge of launching the first clothing designer powered by AI, courtesy of a powerful algorithm it has developed to analyze images and to replicate popular styles. Crunching the data, the AI can develop new designs that appeal to customers on the basis of previous preferences.

Elsewhere, the Indian designers Shane and Falguni Peacock are using an AI tool to analyze more than 600,000 images of couture and international fashion runway shows. They expect the project to enable them to map out a future for Bollywood fashion based on the long-term trends observed in the past.

The fashion start-up Stitch Fix provides another example of what is possible. Unlike traditional designers, its team does not begin the creative process of developing new ideas with mood boards. Instead, they depend on the algorithms built into their AI tools. These tools crunch the profiles completed by clients then wade through 30 million combinations of clothing in order to handpick items they expect to fit the customer’s tastes, needs and budget. Consumers keep what they like and send everything else back.

Connecting with the customer

There will be many more examples of these applications of AI in the fashion industry to come. Indeed, technology has the power to redefine how fashion businesses engage and interact with their customers.

The industry’s digital leaders are already making gains, securing greater customer insight from their rich datasets and pursuing opportunities such as product recommendations, dynamic pricing and improved customer relationship management. In the case of the latter, Tommy Hilfiger has built a chatbot to interact with potential customers. The bot, an automated computer program that manages conversations with live people based on cues they provide in their questions, offers answers and content tailored to their interests.

Nor is the potential of AI confined to transforming the online customer experience: the technology can power better offline engagement, including in the physical store. Some fashion businesses are using sensors that deliver data to their AI tools via the Internet of Things, enabling them to work out how to improve the in-store experience.

Farfetch’s Store of the Future is a good example of what is possible. It features tools such as automatic customer recognition as the shopper enters the store, RFID-enabled customer racks to boost inventory management and support purchasing, and digital mirrors that allow customers to compare combinations of different sizes, colors and styles. Using AI, the company has been able to integrate many of the experiences routinely offered to customers online when they’re actually in the store.

AI can also play a key role in ensuring retailers have sufficient reserves of the most in-demand items. AI-powered tools for demand forecasting are making substantial inroads into a traditional bugbear of the industry. In the best cases, such tools are enabling retailers to reduce forecasting errors by up to 50 percent, while simultaneously reducing inventory by 20 percent to 50 percent.

Conclusion: AI as a strategic imperative

With so many use cases, fashion businesses may need to think about their priorities for AI, focusing on the areas with the greatest potential to add value given their individual business strategy.

The “people question” also presents a strategic challenge. With some research suggesting AI could replace up to 30 percent of the work carried out by fashion designers, how will companies manage their workforces and introduce new tools without alienating employees?

The secret will be to harness a value that has long driven success in the fashion industry: collaboration. In practice, AI tools are likely to support and augment much of the work currently done by designers, rather than replacing creatives altogether. And while some tasks may disappear, AI will also create new opportunities.

For companies working together with design — and the rest of the business — AI offers exciting new possibilities throughout the fashion industry. Think of it as fundamentally disrupting your style — not a passing fad.

Jill Standish is senior managing director and head of Accenture’s retail practice and Vish Ganapathy is managing director and retail technology lead at Accenture.

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