The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LONDON, United Kingdom — "I think PCs are going to be like trucks. Less people will need them." So said the late Steve Jobs, just after the debut of Apple's first generation iPad, three years ago. He was right. Today, we inhabit what Jobs called the "post-PC era." Sales of smartphones and tablet computers have surpassed sales of laptops and desktops, while earlier this year, social giant Facebook announced that, for the first time, it had more active mobile users (680 million) than desktop users.
What's more, in her latest "Internet Trends" report, the legendary Mary Meeker, a former Wall Street technology analyst and general partner at Kleiner Perkins Caufield & Byers, reveals that global mobile traffic as a proportion of total Internet traffic recently surpassed 15 percent and is ramping at a rate of 1.5 times per year. These figures indicate that we are still early in the mobile computing cycle, with tremendous growth yet to come.
In fashion and apparel, the fastest growing e-commerce category (estimated to be worth $41 billion in the US alone) and the second largest after consumer electronics, mobile commerce is still in its infancy, though smartphone and tablet sales are rising fast. Thirty percent of Net-a-Porter’s sales now come from mobile devices, up from 15 percent last year.
But already, the world is on the cusp of another major technology shift.
Driven by the rise of "wearables, drivables, flyables and scanables," a new computing cycle is "coming on stronger and faster than typical," says Meeker. In fact, network-connected cars, low-cost drones, the proliferation of digital sensors and scannable objects, and the emergence of wearable devices (like Nike's FuelBand, Google Glass and Apple's rumoured iWatch) are harbingers of what Meeker calls the era of "everywhere computing," which will have far-ranging implications for the way we do almost everything in life — including the way we shop for fashion.
"Everywhere computing," also called "pervasive" or "ubiquitous" computing, is the idea that, as computing devices become progressively smaller and more powerful, they will be embedded into almost everything — home appliances, cars, clothing, accessories and, ultimately, the human body itself — in such a way as to be unobtrusive and always available.
"Right now it's still easy to separate our natural world (our furniture, clothes, personal objects, ecetera) from the computers in our lives (our phones, iPads, ecetera). But this will change. It will increasingly become impossible to distinguish these things. Computers are becoming embedded in everything — truly ubiquitous," Mark Rolston, chief creative officer at product and service design company Frog, whose clients include Victoria's Secret, Vogue Italia, Disney, Microsoft, MTV and Intel, tells BoF.
"Ubiquitous computing is technically already here, it's just disguised as mobile computing because mobile devices are the most potent example of ubiquitous computing so far," says James McQuivey, an analyst at Forrester and author of Digital Disruption. "Today, people say you carry a store in your pocket because you have a mobile phone. In the future, you will simply be in a store all the time."
So what might this look like for fashion?
"Imagine I spot a really nice shirt, not in a store, but instead being worn by a stranger on the street," says Rolston. "The shirt is essentially out in the wild, no longer associated with any retail source. I could potentially take a picture of it with my smartphone, or maybe even with my Google Glass. The picture would then be compared with the millions of shirts being sold online. When a match is found, it can be bought. All of this can happen in the course of life. I don't stop to go shopping, but instead I find and purchase things in the context of their discovery."
This means the entire world becomes a store in which you can instantly buy almost anything you see — that Kenzo sweatshirt you spot on the street, or the Victoria Beckham mini-dress that catches your eye at a cocktail party. It may sound like science fiction, but it's actually only a few years away, says McQuivey, describing a similar scenario, in which consumers will be able to virtually try on and purchase new clothes and accessories everywhere they go.
"When you see someone on the street wearing something you want to try on, you'll be able to simply capture the image of the person. The algorithms available to you will automatically identify the clothes and accessories that person is wearing and offer to create an image of you in those clothes [assembled] from 3-D models of your body that are updated every morning when your [network-enabled weighing scale] and smart bathroom mirror assess whether you have gained or lost weight and where," says McQuivey.
"You can then speak a command to order that item, or have it held for you at a nearby store — and get turn-by-turn directions to that store in the moment, or save them for later, when you have time in your calendar, something the service will look for and proactively offer to hold," he continues. "That's just one of a thousand variations on that theme, any example of which seems like a dream [today], but will be very common by 2020."
Rolston concurs: "William Gibson said this best: 'The future is already here — it's just not very evenly distributed.' What this means is much of this is already happening right now."
Indeed, New York-based social commerce start-up The Fancy — which is turning over about $100,000 a day, according to recent figures provided by founder Joseph Einhorn — is already experimenting with early stage "glassware" for Google's internet-connected eyewear that lets users find and buy products that match the colours they see. "That's a good start, but you can imagine how this can get even better with image recognition and image differencing technologies to offer more explicit matches," commented Einhorn when the app was released.
When the store is everywhere, traditional retail locations "become less about 'This is where the inventory is and where we take your money' and more about creating an enjoyable, informative and personal experience," says Rolston. "Physical stores become showpieces rather than inventory warehouses. It means fewer, splashier, higher-impact stores," McQuivey adds.
But for physical retailers and traditional e-tailers alike, owning the primary interface with customers — and the relationship that flows from it — is immensely valuable. What becomes of this relationship when commerce is radically decentralised and the store is everywhere?
"The real question is not whether this will happen or even when, but who will own it," says McQuivey.
"Clearly Google wants to own this and is building the devices and software services that will enable it. Amazon may even want to own it, as it sells so many of the products in question," he continues.
"But what about the fashion brands themselves? Will Yves Saint Laurent or Louis Vuitton stand by and let Google become the holder of the most important relationship in the history of their industry? I imagine not."
At present, however, even the most well-funded fashion brands lack the capabilities to tackle the threats and opportunities presented by "everywhere computing."
So what should they do?
First, fashion brands and retailers must create more meaningful partnerships with major technology players like Google and Amazon. Then, within the framework of these partnerships, they must develop environments in which their retail teams can exchange ideas and work closely with technologists. This may mean launching special innovation groups or joint ventures. Undoubtedly, companies will also need to acquire new talent with a strong feel for what the collision of fashion, retail and technology will make possible.
As Marc Andreessen, one of Silicon Valley's most highly respected entrepreneurs and investors, says in his seminal essay Why Software Is Eating The World, "we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy. More and more major businesses and industries are being run on software and delivered as online services — from movies to agriculture to national defense."
Some of these are tech-driven start-ups, while others are established players who have embraced software-based models. But, in short, all major companies may soon be technology companies — including fashion companies.
This article is sponsored by Magento, a company offering flexible and scalable
used by more than 150,000 firms. Magento offers a range of resources, support and consulting services to help their customers get the most from their Magento deployments, including education, training, and developer certification program.