Business of Fashion released its annual State of Fashion report yesterday, and some of the learnings were expected — people aren’t going to IRL stores, for instance. But other insights gave us a look at how the industry might be shifting in the year ahead, from more direct-to-consumer models to artificial intelligence. These were the 5 key things we learned from the report:

1. Online sales of apparel/footwear are expected to grow rapidly, especially in Asian and Latin American markets.

The report says that the West will no longer be the global stronghold that it’s traditionally been for sales. It’s predicted that for the first time ever in 2018, over half of apparel and footwear sales will come from outside Europe and North America. The main emerging markets are countries in Asia-Pacific and Latin American regions.

2. There’s been a steep decline in brick-and-mortar traffic. This might fall under the “obviously” category considering that all of us are shopping online now, but what you might not anticipate is that more stores are trying to reinvent the retail experience. BoF talked to Tory Burch about how her customers have changed, and she had this to say:

“Today they’re coming in and they know what they want. If they’re coming into the store, they’re coming in with an editorial or with an idea of what they want. They’re definitely shopping online. They’re shopping online, at all hours of the day, but they are more purposeful in their shopping. What’s interesting is getting a customer into the store, it’s really showing them things that they weren’t necessarily coming in to buy…”

3. More direct-to-consumer. With Instagram making trends rise and fall — sometimes within days — and slow department store sales, more brands are moving to direct-to-consumer models. The change has been seen even in fashion weeks, with Burberry and Tommy Hilfiger changing models to direct-to-consumer, allowing customers to buy items they’ve seen on the runway just mere seconds before.

4. Retailers will use artificial intelligence in new ways. One of BoF’s core predictions for 2018 is that “leading innovators will reveal the possibilities of artificial intelligence across all parts of the fashion value chain.” In other words, artificial intelligence is already used in the realm of machine tasks, but more and more businesses are implementing it in creative areas and customer interaction. Think Reformation’s tech-y store that opened on Bond Street in December — a real-life Clueless closet that allows shoppers to use screens to choose which items you want to be placed in your dressing room

5. A start-up mentality for luxury labels — Gucci’s been the perfect example of the start-up mentality many labels are gravitating towards. “Due to an urgent and intense need for innovation across the industry, a growing number of fashion companies will aim to emulate the qualities of startups,” the report says. Gucci President and Chief Executive Marco Bizzarri said, “The most intelligent people are not working for you, especially in technology or data science, etcetera, so where are they? You need to find them. Maybe not with the normal employment contract, but [you need to] try to source creativity from outside in an interesting way.”


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