ON-DEMAND FASHION BENEFITS
Finished Goods Inventory:
1. Eliminating the need to follow forecasted demand levels that in most cases result in excess clothes, will allow bands to manufacture and sell only the necessary amount of clothes, without the need to discount, resell, or discard overproduced garments.
Cost & Environmental Savings:
2. By not having to estimate demand, brands do not have to stock up on fabrics and haberdashery: minimum work-in-progress inventory, and, as a result, minimum, if not negative, a working capital requirement because of the prepaid nature of orders.
3. We will state the obvious, finished unsold inventory should ideally disappear altogether. “By making only what’s ordered by consumers themselves, [a New York-based fashion designer] Autumn Adeigbo is able to purchase her materials in limited quantities and maintain very little inventory at any one time.“
4. This benefit is more conditional on the localization of the production. To be efficient and provide minimum lead times for on-demand fashion, the brands would have to work with local factories and suppliers. This may be easier said than done, but the final cost of shipping, customs, and warehousing is comparable to locally manufactured goods. Here is an important case point: “When you look solely at the manufacturing cost per unit, you are only getting part of the picture. You also must consider other factors, like warehousing, shipping, and the risks associated with the value of time. When all of this is taken into account, I am not sure the cost of manufacturing in Asia is really lower. COVID-19 has brought this all into focus.”72
So, where is the benefit? In bringing the customer local product, minimizing environmental cost, hyper agile supply-chain or ‘demand-chain’, and reducing manufacturing cost.
Supplier and End Consumer Relations:
5. Being oceans away, the relationship between suppliers and manufacturers is often neglected in current manufacturing practices. This is a shame, as while “know your customer” is an important aspect, “know your manufacturer or supplier” is becoming increasingly imperative. Simplifying and localizing the manufacturer will help build the necessary trust and transparency. Manufacturers will become a value add and gain well-deserved recognition in contributing to the final product. Brands will be able to be fully transparent for the end consumer. Consumers, in turn, will understand where and how the garment is manufactured, gaining the desired level of comfort and trust with the brand.
As the designer, Autumn Adeigbo told Fashionista “[On-Demand] not only minimizes fabric waste, excessive manufacturing, and surplus stock but also enables a more intimate relationship with her suppliers.”
Perseverance of the craftsmanship:
6. On-demand is not only for ready-to-wear brands. The right digital tools will also help empower smaller made-to-measure brands and factories that hold the knowledge of Savoir-Faire to keep up with the times of digital. We documented this powerful benefit of the demand chain. It will help small traditional brands step into the future, preserve a heritage of craftsmanship, and continue sharing, if not shaping, tomorrow’s fashion.
New shopping experiences (more in the last section):
7. Producing on-demand implies the creation of 3D images of designer collections, easily “manufacturable” by the factories. It also means that once 3D is ready, there are virtually endless opportunities to create new exciting shopping experiences leveraging gaming technologies.
Reallocation of digital resources:
8. Digital efforts currently spent on demand prediction, could be rerouted into AI-based prediction of trends. Further developing new designs in 3D, giving the consumer what they want even faster, without having to manufacture a whole collection first, or as The Fabricant and DressX proved, never at all.
Art and quality over speed:
9. Manufacturing on-demand, localizing suppliers, delivering perfectly fitting garments only makes sense for higher quality items, bypassing the fast fashion market. We hope that such an approach will trigger brands to manufacture higher quality (not bespoke level quality) items that the clients would want to invest in, keep for longer, and resell in the second-hand market.
A whole new level of ‘Know your Customer’:
10. Having aggregated data on what customers want takes predicting trends, personal shopping, and convenience to a whole new level. Brands will know what is in your wardrobe, pre-configure new styles based on your taste and measurements, and deliver to the door.
If it’s all that great, why haven’t we done it already?
For starters, developing and implementing such technology from scratch for the brand’s internal usage requires significant investment in developing technical capabilities, including upgrades, tech support, and maintenance. All these fall too far from the core of the business for most brands.
It is not impossible, we have seen Debeers and LVMH onboarding rivals on the Tracr and Aura blockchain platforms (developed respectively by the two moguls), but we have yet to understand the development cost and accessibility for brands with smaller budgets. If on-demand technologies follow blockchain developments within the fashion industry, we will see some big brands become early adopters of the on-demand concept and related tech, onboarding other brands and factories for the industry’s greater good.
Secondly, for years the fashion industry was quite slow to change the supply chain, focusing instead on delivering convenience and lowering the cost for the final customer. This resulted in exploitation by bigger brands upstream and midstream of the value chain, while small traditional brands had to pass on the price to their final customer. Even though fashion is changing as we speak, “retail has experienced more change over the past five years than in the prior 50”, it is fair to say that the industry kept its guard and was overall insusceptible to large technology transformations in the supply chain. We just started seeing a willingness to invest and adopt such radical concepts as on-demand fashion.
Overall, industry reluctance to change, high price points for developing it in-house, and introducing non-core capabilities have kept the brands away from manufacturing and selling on-demand. The system simply seemed to be okay with functioning As-Is.