Michael Treff
Code and Theory CEO,
Co-Founder of ON_Discourse

The Fashion Industry
Treats Tech Like
a Seasonal Trend

The fashion industry prides itself on being on the cutting edge. What is fashion if not trendsetters deeming what is worthy to grace our collective bodies? And yet, while fashion companies dictate and forecast what’s next, they mistake truly seismic shifts in technology, which can fundamentally change not just business operations but also consumer experiences, for just another seasonal trend.

On the back end, the fashion industry structurally embeds technology everywhere. Fashion companies constantly leverage a variety of tech wherever consumers are not present: from materials creation to factory logistics, to supply chain management, to shipping and delivery. When there’s potential for profit—be it through addressing labor concerns, enhancing material durability and sustainability, or simply uncovering new cost efficiencies—the latest technology is reluctantly embraced.

However, on the front end, where technology has the ability to change the way a consumer and the brand interact, the fashion industry treats technology like a seasonal collection, opting to ride hype cycles and use innovative tech as hype engines vs. using new technology to find opportunities to solve for consumers. Rarely does the consumer-facing, marketing-driven sides of fashion organizations adapt new technology in a systemic, structural way, rather than opting for the tech version of disposable fast fashion. Although products are created with the latest cutting-edge innovations, they are sold by whatever tools happen to be available. These tools range from what appeared to work in another industry last decade to whatever happens to be on everyone’s lips this week in Silicon Valley.

The fashion industry is like a dog and its owner. The owner makes sure the dog has water, is fed, has toys, gets plenty of attention, and attends its regular veterinarian appointments. Then the dog goes to the park and chases squirrels.

A few years ago, fashion companies discovered AR, for a few months. There was a collective excitement about making billboards come to life on your phone, which, as we know, solves many consumer problems and drives bottom-line ROI in unparalleled ways. This AR blitz achieved absolutely nothing. AR didn’t affect their bottom line in any way, was a frustrating consumer experience, and peaked as merely a neat activation—yet another gimmick. Fashion companies went in with a short-term focus: “Hey, AR looks cool. Let’s try AR, and we’ll be cool too!”

This happens repeatedly.

QR codes? Fashion companies decided they were the future and the only thing consumers could ever want, so for a little while, they put them everywhere.

NFTs? Rinse and repeat.

Because the excitement always lasts just one season, there’s no need to invest for the long term. As we discussed at our recent NYC event, the fashion industry is fundamentally hype-driven and thus cannot sustain new tech forces beyond a single seasonal trend cycle.

Fashion companies go all in on non-structural, non-systemic, activations-leveraging, flavor-of-the-month tech. Because technology is seen as a fad rather than a systemic differentiator for the customer experience, there’s no lasting impact on the company’s data, infrastructure, ability to drive personalization, or sales enablement. All those areas are entirely separate from the marketing department that got wind of web3.

Fashion’s tech trend phenomenon goes back decades.

At the beginning of the shift to the direct-to-consumer (DTC) model, traditional fashion brands didn’t know what to do with e-commerce. First, they tried to ignore it. In some ways, this was understandable. Fashion brands are simply dominated by forces that are antithetical to structural technology adoption. The industry is built on hype and disposability–it’s not built for long-term structural change. Non-native digital fashion businesses didn’t want to even accept e-commerce because it would “erode the brand".

When that didn’t work, brands tacked e-commerce onto their existing operations. That was only a slight improvement. While fashion companies had finally accepted online shopping as necessary, they didn’t embrace it. The budget for their e-commerce environments compared to what they would spend on their physical retail environments was minuscule.

This was ridiculous.

Obviously, your online store is going to be your biggest store. Obviously, your online store is uninhibited by scale and reach and foot traffic. And obviously, your online store has a lower cost of entry than a store on Fifth Avenue. So obviously, brands treated their online store like a campaign.

The e-commerce budget across the technology infrastructure, UI, and UX would typically be less than what they would spend on a billboard for 2 markets.

The incumbents had left the runway wide open. Eventually, a crop of DTC-based fashion brands and companies leapfrogged the traditional players in their e-commerce footprint. For the newcomers, e-commerce was their only footprint. They didn’t have retail stores. From Warby Parker to Everlane to name your favorite mattress or beauty company (I’m looking at you, Glossier), they all started with a digital-first, technology-first, e-commerce-first mentality, which let them build completely differentiated businesses.

When the legacy companies finally realized their mistake, they eventually caught up. They caught up, but only in terms of understanding the need to invest, not the magnitude of the investment, or the subsequent ROI. Today, the budget that luxury brands will spend on campaigns, social content, influencers, and marketing versus what they will spend on infrastructure and technology to drive high-conversion, high-margin sales, remains fractional.

It’s likely that fashion brands have simply decided that their customers don’t need to be wooed and wowed. People who want to buy a $10,000 purse are going to do so regardless of the digital consumer experience. And so, fashion brands don’t see the value in investing in tech because they already reach some customers and believe the group of people they could win over with tech is infinitesimally small. This is precisely why these companies were too slow to react to the internet and e-commerce: they couldn’t grasp the potential outside of their existing revenue stream.

Ultimately, this is a cultural problem of siloed departments. There’s a clear bifurcation between the people who make and market the products and those who own the most important touch point: the digital properties. These are not the same people. They’re not even in the same organization. They operate as if they have different competing goals. Someone owns the tech and the platform, someone else owns product development, and a summer intern who owns marketing.

This internal division exacerbates the problem, creating a blocker for any adoption of technology and innovation. Fashion brands aren’t interested in extending the latest tech across back-of-house, product development, marketing activation, and sales. They view technology as an inhibitor, rather than an enabler, of brand and product value.

As long as companies in the fashion industry continue to operate under this premise, and organizationally bifurcate the various touchpoints within a consumer’s experience, they will be playing catch-up and opening themselves up to disruption.

Do you agree with this?
Do you disagree or have a completely different perspective?
We’d love to know


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