The evolution of Artificial Intelligence has been at the top of the mind for most industries – and Fashion & Sporting Goods is no exception. According to a recent report by McKinsey, while the fashion industry has experimented with basic AI and other “frontier technologies” such as NFTs, digital IDs and augmented or virtual realities, it is yet to properly incorporate generative AI – that is, AI that can create new content. However, successful adoption of nascent AI technologies could add $150 billion, conservatively, and up to $275 billion to the apparel, fashion, and luxury sectors’ operating profits.
Recently, SRI’s FSG team sat down to think about the advantages and disadvantages that advancements in AI could bring to the industry in the future and recorded some of the key takeaways.
The Pros:
– AI could help with automating processes, which could lead to a significant increase in efficiency. For example, AI could help optimize production processes and supply chains, and make demand planning even more precise (e.g., seasonal cycles, better planned wholesale & DTC demand scenarios). However, automation is only a small segment of generative AI’s predicted uses – augmentation and acceleration, that is, giving fashion professionals the necessary technology to do certain tasks much faster, freeing them up to spend more of their time doing things that only humans can do – is a much more likely overall outcome.
– AI could be used to further personalize shopping experiences. Through more accurate analysis of customer shopping behavior as well as personal attributes, such as product preferences, sizes, and purchase history, AI could suggest personalized recommendations for products and outfits.
– AI offers the ability to analyze large amounts of data and thus predict trends in the Fashion & Sporting Goods industries. This enables brands to align their product development and design with current and future trends. Generative AI could also help convert mood boards, sketches and descriptions into high-fidelity designs.
– AI could assist with quality assurance/control of products and materials. Through image recognition and machine learning, for example, AI can detect defects and quality issues faster and better than the human eye.
– AI could also be of use in marketing, by automating consumer segmentation at scale and generating personalized marketing content from unstructured data.
The Cons:
– With AI algorithmically driving ideation, manufacturing and marketing, there’s a risk that fashion will become too algorithmic, standardized and monotonous. This could lead to a decline in the quality of products, as well as a decline of the overall status of the industry.
– Using AI poses challenges in the realm of intellectual property, where the regulation of partially or entirely AI-generated IP is still uncertain.
– Data protection and privacy concerns are key considerations. The use of AI in the fashion business requires access to large amounts of customer data. This raises questions about data privacy and the security of personal and private information.
– Automation of processes and the use of AI may make certain jobs in the fashion business redundant.
– Fashion is a very personal and emotional experience. While a streamlined customer experience goes a long way, brands need to be able to “genuinely fascinate and be of value to consumers” to maintain the shopping experience customers have become accustomed to.
As often in life, things are never black and white. That’s why we believe in weighing the pros and cons carefully and striving for a balanced use of AI in the Fashion & Sporting Goods business that leverages the strengths of this technology while also taking human creativity, consumer intuition, and teamwork into account. We are looking forward to your input.
