Even five years ago the majority of Indians would go shopping just once or twice a year, usually before a major festival or for family weddings.
The Indian apparel industry is changing, and it is changing quickly. With mass media penetration and growing disposable income, Indian consumers have become more demanding and adaptable to change in fashion.Hence, it has become challenging for retailers to keep up with shifting shopping demands. Shoppers today are well informed about fashion trends and demand accordingly. Thus, it becomes challenging for retailers to cater their customers with constant change in preferences.
Remember those good-old days when new clothing collections followed a seasonal cycle?
Now, times are changing rapidly after brands such as H&M, Forever 21 and Zara entered India to much fanfare and growing affluence. This is allowing a new generation of shoppers to become part of the world of fast fashion.
The value of a fast fashion brand is to bring the latest designs and “trendiest trends” into the market as quickly as possible, preferably as soon as they became hot on the catwalk, and to provide these at a reasonable price. The traditional fashion industry is not well equipped to provide such value as it operates on a bi-annual or seasonal basis, with long production lead times due to outsourced manufacturing to low cost-centers.
Zara is the pioneer in Fast Fashion by using data and analytics to track demand on a real-time, localized basis and push new inventory in response to customer pull. This enables them to manage one of the most efficient supply chains in the fashion industry, and to create the fast fashion category as a market leader.
It produces over 840 million garments in a year. Every item of clothing is tagged with an RFID microchip before it leaves a centralized warehouse, which enables them to track that piece of inventory until it is sold to a customer. The data about the sale of each SKU (Stock Keeping Unit), inventory levels in each store, and the speed at which a particular SKU moves from the shelf to the POS is sent on a real time basis to Inditex’s (Zara’s parent holding company) central data processing center.
Zara design teams then track customer preferences and use sales information such as sales analysis, store trends and product life cycle information. The design teams thereby bridged merchandising and the backend of the production process and they developed the right products within the season to meet consumer demands.
Myntra - Rapid Platform
With so-much competition, how do you compete with companies for fast fashion?
What if you automate the fashion design process from start to end? If machines could recommend clothing attributes that customers currently favoured, shouldn’t they be able to combine those attributes into popular final designs?
To realize these goals, Myntra started experimenting with artificial intelligence (AI) systems that recognized shapes, patterns and colours to produce garments that met popular demand at a speed that would be impossible for traditional apparel makers to match.
The Rapid tech platform analysed sales data from Myntra and Flipkart websites, as well as the latest fashion trends collected by trawling Instagram, Pinterest, fashion magazines and similar sources. Rapid’s technology would come up with a list of attributes: types of collars, sleeves, cuts, colours and other features currently popular with customers. Two of Myntra’s Fashion Brands, ‘Moda Rapido’ and ‘Here & Now’ are the first of their kind to be completely conceptualized and designed using AI and ML.These brands are not only the fastest growing, but also the most profitable in the MFB portfolio.
The results were encouraging. This led the company to start using data analytics in an important way. Myntra started using machine learning in pricing, demand sensing, planning, and digital brand marketing.
For FY 2018, Myntra says is seen clocking 55 percent growth overall, and its private
labels are growing at 100 percent. Myntra, like other ecommerce firms, sees growth from smaller towns. “Tier II markets did exceptionally well for us with a contribution of 55 percent to the overall revenue. This was primarily due to our efforts in tapping into consumer insights and addressing the consumer need gaps,” says Ananth Narayanan (CEO Myntra-Jabong).
The Rapid project has changed the way Myntra looks at creating new brands.From a sales, margins and valuation point of view, the Rapid project can deliver massive benefits over time.