Fashion Drives Us, and AI is Driving Fashion. Here's How
Despite the established nature of the fashion industry, artificial intelligence (AI) is transforming the fashion industry across the verticals.
FREMONT, CA: The fashion industry is estimated at around 3 trillion dollars and is one of the biggest industries in the world, representing two percent of global GDP. Many of the online e-commerce, as well as brick-and-mortar traditional retail stores, are dedicated to the sale of clothing and fashion items.Artificial intelligence (AI) is transforming the fashion industry from the point of product manufacturing to the way they are marketed and sold. Here are the primary ways in which AI is changing the fashion industry:
Inventory management is both complex and critical for apparel brands. Retailers must find a balance between having enough stock in their inventory to keep business moving but not so much that it affects the cash reserves because of unsold products. Thus, accurate prediction of demand gets crucial to strike a balance. Machine learning (ML) algorithm use past data to make choices and predictions. AI-powered tools utilize these algorithms for demand forecasting, thereby solving the age-old industry pain point. The tools can help the retailers to decrease forecasting errors by up to 50 percent while offsetting inventory by 20 to 50 percent.
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Connecting with the Customers
Several fashion retailers use AI chatbots, or the smart assistants to provide product recommendations and to connect with the customers. The technological adoption can save the retailer’s money on customer service staff. Major brands are also incorporating virtual assistants that help customers with fashion advice with a more personalized and smooth shopping experience. In some cases, the chatbots go beyond the customer’s expectations and incorporate real-life training by harnessing decades of data sets.
Brands must be able to predict customer preferences better to keep costs low. The collection and analysis of the purchase data along with AI and ML enable retailers to design clothes that customers would like to buy.
As per IHL research, retailers lose almost $642.6 billion each year from preventable returns. Clothing returns requires approximately three times longer for inspection than other segments resulting in high operational costs. AI can assist customers with more informed purchase decisions. It can also access user’s data based on past purchases, thereby minimizing the chances for error.