Technological innovations and changing customer expectations require new business models and organisational principles in the textile industry. Read in this article how digitization affects the textile industry and what consequences it has for its customers, sales channels, textile products and the value chain of the textile industry.
Trend towards focusing on customer needs
In future there will no longer be the standard customer who is looking for a certain item of clothing. Instead, the study identifies nine customer groups in the Economy and Premium segments with individual needs - Standard is gradually dying out.
People's lives are increasingly influenced by devices that allow access to the digital world at all times. This not only has an impact on communication behavior, but also has a major impact on consumer behavior. Because the demands of customers are becoming more and more individual, with standard products and standard communication they will no longer be addressable in the future. On the contrary, in future it will even be possible to offer textile products and services that can adapt to changing customer needs even after the purchase.
However, this requires a good knowledge of the customer's values and consumer behaviour. A differentiated analysis of the customer groups taking digitalisation into account and the development of up-to-date marketing concepts is therefore indispensable in order not to lose contact with the customer.
Trend towards individualized communication
Changing customer needs require companies to rethink their approach in dialogue with customers.
Individualized communication across all analog and digital channels will be a central component of a successful business model of the future.
- The digital profile of the customer: In order to realize a corresponding dialogue with the customer, a detailed, digital image of the customer is required. Big data and clever CMS systems are an essential basis for achieving a completely new form of customer transparency.
- Individual customer approach: Modern targeting methods make the targeted approach to customers with individualized purchase offers considerably easier. For example, the Hamburg-based beer brand Astra addressed exclusively female passers-by with a smart poster. A camera equipped with automatic face recognition detected the sex of the person passing and played corresponding commercials.
- From multichannel to omnichannel: From presale and marketing activities to sales contacts and customer service, new communication channels have emerged in the course of digitization with apps, social networks and online portals, which must be integrated into the overall strategy.
"The general recommendation for clothing companies is: "Know your customer, think about how you can talk to him and find the right channels," says Dr. Ulla Ertelt, market and future research.
Trend towards decoupling infrastructure and supply
In the course of digitalisation, the textile industry is also increasingly decoupling infrastructure and supply. Stationary trade is affected in two ways in this respect: On the one hand, online shops and marketplaces have skimmed considerable market shares before the textile industry was able to react adequately. On the other hand, the point of sale will increasingly shift to the digital sector in the future. Communication and information platforms such as Pinterest, WeChat and Facebook are increasingly developing into sales channels.
- The stationary textile trade of the future: There will still be stationary shops in the future, but they will change massively. In future, the classic analog stores will only appeal to a few customer segments - virtual shopping experiences and additional services outside the actual business model will be the main motivators for customers to visit a stationary store. With the "The Sampler" app, for example, Converse offered its customers the opportunity to try on shoes virtually in augmented reality.
- The fusion of online and stationary: The purchasing process must be made possible at all locations where customers can be approached for shopping. It is a suitable combination of digital and analog concepts that are suitable for the individual customer. In South Korea, for example, the supermarket chain Tesco has been offering virtual shops since 2011, which are primarily intended for commuters. In subways, customers can scan QR codes on the walls and shop via their smartphones. The purchase is then delivered home or into the trunk of your own car.
The end of the standard customer is particularly noticeable at the point of sale. The networking of analogue and digital channels must therefore be linked to the customer profile to enable individual offers at the respective point of sale. Although digitization poses a threat to the stationary retail trade, it also offers many opportunities through new types of distribution channels.
Trend towards individual and technologised clothing
The effects of digitization are not limited to customer needs and communication. The demands on the products themselves are changing. The individualisation and technologicalisation of clothing are major trends here, which will continue in the future. Wearable technology and functional clothing will be part of everyday life in the near future.
Individualization of clothing
The ever more individual demands of consumers and the technological possibilities in the course of digitization are also driving individualization in the textile industry. Until recently it was up to the tailor to tailor the clothing to suit the respective customer, but in future customers will be 3D-measured using apps or Smart Mirrors and their clothing individually adapted and manufactured. Individually designed clothing at an affordable price becomes possible for many people.
In some customer segments, there is also a tendency for customers to want to contribute their own ideas to designs and collections. Esprit #ImPerfect's social media campaign can be seen as a reaction to this trend. Customers are called upon to take their own photographs in order to incorporate the impressions gained from them into the new Esprit collection.
Innovative technologies along the entire value chain automate the individualization process. This applies to size and fit as well as design and special applications such as LED inserts. Alastair Harvey, Chief Solutions Officer, Cortexica Vision Systems sums up this trend as follows:
"At the macro level, the customer will have more influence on the design of the product he wants to buy in the near future - individualization is the key. In the next five to ten years, companies will have to produce clothing on an on-demand basis, which will require a more efficient supply chain and production design. We will also see 3D printers that produce mass-produced goods. We will see customers go to stores who design their own garments and leave the store almost immediately. It will be very interactive, as physical stores will have to offer something really appealing and practical to survive in the fight against digitization."
The living environments of customers are becoming increasingly digital. Consumer goods manufacturers respond by also digitizing their products. In the textile industry, too, more and more suppliers are developing products in the areas of wearable technology, i.e. clothing with technological functions and functional clothing, i.e. clothing that fulfils new functions. In addition to woven LEDs and communication interfaces, a number of other development areas are also emerging:
- Beauty: Cosmetic textiles based on microparticles that have a moisturising or refreshing effect.
- Health: textiles that monitor vital signs or are available to third parties for care purposes, e.g. orthopaedic soles from Wiivv or the breast cancer detecting BhitBra from Cyrcadia Health.
- Comfort: Textiles with built-in temperature and humidity control. Earebel, for example, already offers caps with integrated sound boxes.
- Optimisation: textiles that promote muscle building via electrical stimulation, e.g. body street.
- Safety: Clothing with integrated indicator in the sleeve, working clothes with active lighting elements, textiles that cushion against falling.
- Support: Textiles that generate energy, e.g. the insole for SolePower shoes, which generates electrical energy through movement, stores it in a battery and uses this energy to charge electrical devices.
The combination of individual and technological textile products will result in more adaptive products in the future. They also adapt to the individual needs of the customer after the purchase. Charms bracelets or functional clothing are already available applications of this principle. In addition, smartphone control of clothing will become increasingly important. For example, the user can control the colour of LED textiles according to mood. Or the textiles are equipped with sensors that are only visible with a smartphone and change the appearance of the clothing or contain useful information.
Trend towards automation of the value chain
In a few years the value chains of the textile industry will be largely automated, especially in the areas of production and logistics.
Drastic reduction of production time
Disruptive innovations such as automatic sewing machines and industrial 3D printers enable a significant reduction in production time. Natural and near-natural fibres can also be printed in 3D within a few years.
One of the pioneers in this field is Adidas. The company has almost completely automated the production of its sneakers. All materials, with the exception of laces, are printed. Employees are now only assigned to monitoring the machines. Instead of a production time of three months, the production of a shoe only takes five hours. An individualization is therefore obvious.
Worth mentioning here are also the meanwhile affordable prices of 3D printers in the consumer area. Customers will therefore be able to produce their own clothing at home in the future, or 3D printshops will take over this task. Of course, this also has an impact on clothing manufacturers and designers. The textile industry will also have to create space for DIY customers. Clothing companies could retain customers by selling design files, fabrics, patterns, 3D printers, sewing machines and software.
Acceleration of logistics processes
Online customers do not want to wait long for their products. They are used to short delivery times through suppliers like Amazon. Speed is therefore one of the most important challenges facing the textile industry. Efficient ways are decentralized, highly automated warehouses with storage robots, shelving systems and sorting machines as well as the integration of Big Data into warehouse logistics to anticipate consumer behavior.
Furthermore, an acceleration of the logistics processes is made possible by the technology of the clothing. Smart clothing with sensors and geo-location chips can communicate directly with the logistics systems and can thus be clearly identified and localised along the entire value chain. At the same time, however, customers also receive information on the production of the clothing or when it was last washed, for example.
Conclusion: Textile industry needs new business models
The market shares of conventional textile companies are increasingly being skimmed off by players from outside the industry. Wearable Technology and Functional Clothing accelerate this process. In addition, new production mechanisms such as 3D printing enable customers to print clothes at home or in decentralized print shops. The brand image will therefore no longer be decisive for winning and retaining customers in the future. Rather, the trend is towards data-supported recognition and addressing of the individual needs of the customer. Many providers will therefore have to radically rethink their business models.