Last April, McKinsey and Business of Fashion consulting companies released a new report on Fashion industries investments in technology in the next years.
The study stated that, in 2021, Fashion companies invested between 1.6% and 1.8% of their revenues in technology. By 2030, that figure is expected to rise to between 3.0% and 3.5%. Behind the predicted increase is a conviction among many that technology could create a competitive edge in customer-facing activities, where companies have mostly focused to date, and, more increasingly, in operations.
Technologies such as robotics, advanced analytics, and in-store applications may help streamline processes and support sustainability, as well as create an exceptional customer experience.
Digital technology in Fashion
McKinsey analysis shows that Fashion companies that now embed AI into their businesses models could see a 118% cumulative increase in cash flow by 2030. Conversely, those that are slower to invest in digital technology will lag behind—and could see a 23% relative decline.
Over the next 3 years, potential key areas in which Fashion executives could make digital investments are personalization, store technologies, and end-to-end value chain management — areas in which digital can make a real difference to performance.
As Fashion industry executives consider how to maximize their technology resources, McKinsey and the Business of Fashion have identified 5 key themes that could help the industry address some pressing challenges, as well as unlock potential opportunities: metaverse reality check, hyper-personalization, connected stores, end-to-end upgrade, and traceability first.