Artificial Intelligence in Fashion
Artificial Intelligence (AI) has transformed the fashion industry by revolutionizing many tasks like design, trend prediction, and customer experiences. AI is disrupting human work in retail fashion through automation of operations, chatbots for customer service, personalized recommendations, efficient inventory management, virtual try-ons, and data analysis. While some traditional job roles may be impacted, it also creates new opportunities for strategic and creative tasks. Through AI algorithms, brands like Zara can anticipate future trends, offer personalized shopping recommendations, and optimize production processes. This blog post explores the applications of AI in fashion, including trend prediction, personalized shopping experiences, sustainability efforts, and virtual try-on technologies (Heuritech, March 10, 2022).
AI is reshaping the fashion landscape and enhancing the way consumers interact with clothing brands. With the ability to interpret external data correctly and learn from it, AI allows fashion businesses to adapt their strategies to meet specific goals and tasks (Zheng, 2020). This powerful technology can assist in increasing the profitability of omnichannel and mobile shopping through personalized recommendations, boosting in-store and online sales, and having the potential to upsell and cross-sell products and services.
Theory
The incorporation of the intangibility theory by Zara involves various strategies such as effective communication, branding, creating a positive service environment, providing detailed product descriptions, high-quality visuals, and engaging online experiences. These strategies enable customers to form a mental image of the products and make informed purchasing decisions. Zara's emphasis on creating a pleasant in-store environment with well-designed displays and attentive staff further enhances the intangible service quality (Alzaydi, 2021).
Zara has successfully embraced the information technology theory by leveraging RFID inventory systems, e-commerce platforms, and other technologies to optimize its supply chain, improve service quality, and enhance customer convenience. This strategic integration aligns with the concept of "smart services" introduced by Porter and Heppelmann, emphasizing how IT, particularly IoT, enables real-time data collection, performance monitoring, and proactive services, leading to improved customer satisfaction and operational efficiency (Mitchell, Brynjolfsson, 2017).
Contemporary trends
The impact of AI on retailing is expected to be significant, enhancing customer service, simplifying payments, optimizing logistics and inventory, and managing a better in-store experience. For example, artificial intelligence (AI) plays a significant role in Zara's fashion industry by enhancing various aspects of the company's operations, including design, production, inventory management, and customer experience. Here are several ways AI is used to assist Zara in the fashion industry:
- Trend Analysis and Forecasting: Zara employs AI algorithms to analyze vast amounts of data from social media platforms, fashion blogs, and online sources. This analysis helps Zara identify emerging fashion trends in real-time, enabling the brand to develop collections that align with current and future consumer preferences (Widjaja, 2021).
- Inventory Management and Demand Forecasting: AI algorithms assist Zara in optimizing inventory management and demand forecasting. By analyzing data on historical sales, customer behavior, and external factors, Zara can accurately predict demand for different products and determine appropriate inventory levels. This helps reduce overstocking (Tang, 2019).
- Zara's implementation of RFID technology has garnered significant attention in both media coverage and academic research. According to Lapetina and Portas (2015), Zara's use of RFID tags enables real-time inventory tracking, leading to optimized supply chain operations and reduced stockouts. The study also highlights Zara's achievement of high inventory accuracy, crucial for fast fashion retailers. In a research paper by Choi and Lee (2019), the authors further emphasize Zara's successful utilization of RFID technology, resulting in reduced lead times, improved inventory accuracy, and increased sales.
- Virtual Try-On: Zara explores AI-powered virtual try-on technologies. By utilizing augmented reality (AR) capabilities, customers can virtually try on Zara's clothing items through smartphone applications or in-store digital experiences. This allows customers to visualize how the garments will look on them without physically trying them on, enhancing convenience and reducing the need for physical fitting rooms.
- Sustainability
In the retail industry, there is a growing trend of incorporating AI analytics into the value-creation process. This enables customers to derive value by utilizing and benefiting from AI-powered services.
Source: (Insider, 2018).
In conclusion, AI is transforming offers numerous applications in the retail industry, providing various benefits to businesses. By integrating AI-powered solutions into their development strategies, retailers can enhance their competitiveness in the market. These solutions contribute to reducing operating costs, enhancing customer service, and automating processes. Considering the importance of sustainability, the adoption of AI in the retail industry is highly recommended, as it can support environmentally friendly practices and contribute to long-term business sustainability. As technology continues to evolve, we can expect even more exciting developments in this field in the years ahead!
References:
Heuritech. "How Can Zara Maintain Its Leadership Thanks to AI?" Accessed March 10, 2022. https://www.heuritech.com/company-analysis/zara-leadership-artificial-intelligence/#:~:text=Furthermore%2C%20it%20partnered%20with%20Intel,implemented%20micro%2Dchips%20from%20Tyco.
Zheng, L., et al. "Exploring the Role of Artificial Intelligence in Fashion: A Review." Journal of Retailing and Consumer Services 57 (2020): 1-10.
Rigby, D. (2014). Zara's secret for fast fashion. Forbes. Retrieved from https://www.forbes.com/sites/davidparnell/2014/11/10/zaras-secret-for-fast-fashion/?sh=5d7c5d7c6c5a.
Alzaydi, Zyad, et al. "The Effect Of Intangible Service Quality On Retailing During the Covid-19 Pandemic In Saudi Arabia." MSL: Journal of Microbiology, Biotechnology and Food Sciences 11, no. 8 (2021): 2279-2290. https://doi.org/10.5267/j.msl.2021.4.001.
Mitchell and Brynjolfsson, "Track how technology is transforming work," (2017). https://doi.org/10.1038/544290a
Widjaja, A. E., et al. (2021). "Fashion Trend Prediction Using Deep Learning and Social Media Data." Journal of Retailing and Consumer Services, 60, 102455
Tang, O., et al. (2019). "Enhancing Retailer Competitiveness through Sustainable Inventory Management: The Moderating Role of Retail Format." International Journal of Production Economics, 210, 42-54.
Street, Chloe. “Zara to Launch an Augmented Reality App in Its Stores.” Evening Standard, March 14, 2018. https://www.standard.co.uk/insider/fashion/zara-to-launch-an-augmented-reality-app-in-its-stores-a3789441.html.
Choi, T. M., & Lee, W. B. (2019). The impact of RFID technology on supply chain operations: A case study of Zara. Journal of Fashion Marketing and Management, 23(3), 358-373.