How fashion industry can leverage artificial intelligence

“Artificial intelligence (AI) would be the ultimate version of Google. The ultimate search engine that would understand everything on the web. It would understand exactly what you wanted, and it would give you the right thing.” - Larry Page

AI grants us the power to understand exactly what our consumers want, and this power, when leveraged correctly, can be the quickest path to success. AI, compared to the “Demon” by Elon Musk and to “God” by Alan Perlis, is omnipresent today.

It would be hard to name an industry that isn’t growing increasingly dependent on AI, and fashion retail is no exception.

To understand the impact of AI on fashion retail, let’s first divide the industry into its two primary channels — ecommerce and brick-and-mortar stores. While physical stores have a unique set of usage for AI, it’s the e-commerce retailers that are the chief worshippers.

The mind reader

Today, brands like ZARA and Shein churn out clothes that fit into the fad within a turnover period of 15 days. The million dollar (literally) question is, how exactly do they predict trends so quickly?

Well, this is where AI enters the scene. AI facilitates immediate recognition of changing trends that help these brands to stay on top of their games, and deliver instant gratification to their consumers.

Beyond prompt fulfillment, personalisation is another factor that consumers look forward to, and this is where AI-driven visual recognition comes into play. We’re all familiar with the product recommendations offered by sites like Amazon.

Ecommerce fashion retailers of the day unanimously use visual recognition to recommend similar looking products to their consumers, based on their respective search histories. This makes the shopping experience convenient for the buyers and helps brands to score more conversions.

Conversely, visual recognition plays an equally important role at the sourcing end for retailers. Based on past sales data, it can help to identify categories, designs, and colors that are experiencing high demand and also the ones that aren’t.

The said knowledge can be used by purchasing departments to determine the volume of products to be stocked. Data driven decisions like these are great tools for combatting overstocking, and lead to better inventory turnover.

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Power of omniscience…

AI, with its God-like omniscience, has become the ultimate tool in the hands of marketers. In fashion retail, marketers use various avenues like targeted ads, emails, and app notifications to maximise conversions, and AI is a chief ally in the process.

Brands employ AI algorithms to identify which consumers are likely to make a purchase soon, based on their searches and number of visits made to the site. This data is used for repeatedly targeting the said consumers with ads and reminders about the product, which results in higher levels of conversion. 

In fact, fashion retailers benefit greatly from AI applications such as social listening, where tools can be used to “listen to” and analyse what consumers are saying about a brand, its competitors, or specific topics of interest on social media.

Marketers use chosen keywords to virtually eavesdrop into social media conversations, and the knowledge they gain is used to either improve strategic decisions or target potential consumers.

Better pricing, fewer returns

In a highly saturated market like fashion retail, brands experiment with their pricing strategies depending on their market positions. Newer brands try to grab market share by quoting lower prices, and established brands tend to push their price points to maximise margins. AI helps to monitorcompetitors’s prices using freely available data and to determine competitive price points accurately.

Fashion e-commerce sites also use AI to improve size recommendations on a product-by-product basis, by analysing previous purchase data of consumers. This has been considerably effective in resolving the problem of product returns due to size-fit issues, which is a major challenge for the online retailers.

AI inside the store..

Virtual Reality (VR) and Augmented Reality (AR) are the most promising AI technologies, expected to overtake in-store shopping experiences in the coming decade. Physical stores can not only use AI to leverage inventory management and marketing initiatives, but they can also use AI to offer exclusive user experiences.

Tommy Hilfiger, for instance, made it to the news in 2015 when they used Samsung VR devices to provide front-row runway experience to their customers within the retail space.

Alibaba too has been playing around with AI since they launched their FashionAI stores which feature intelligent mirrors and smart garment tags. The popularity of in-store smart assistants is also growing exponentially, credit to their scalability in terms of offering customer support.

Can AI be creative?

The answer is yes, we have great faith in the creative potential of AI! In2017, the Amazon team in San Francisco used AI to design new clothing products based on existing designs. They employed AI to analyse stock images of certain products and created duplicates in similar styles, proving that it was possible to use AI for designing work by feeding relevant data.

But of course, there remains much scope to improve the sophistication of those designs. AI could be called truly creative when it begins to innovate instead of just duplicating - haute couture by AI is still a distant dream. For now, the human agents organising the data to be fed remains the essential bridge between AI and creative innovation.