People around
the world are going through a global crisis which is afflicting also the
Fashion Market. What used to be conventional, today is odd and the sector must
be knowingly ready to change. People are facing a shakeup of their daily
routine and the wind of change is also affecting the Fashion Retail players
that must rethink their purchase patterns, reconsider the “store” concept and
satisfy the need of new consumers.
For them the
biggest concern is to shop safely, and the retailers must think how to serve
them better. The report “The State of Fashion 2020”, published by McKinsey,
emphasizes the clear metamorphosis of the consumers: far from being passive
players, now they lead the purchase experience, they are increasingly more
demanding and ask for a “problem-free” shopping journey, an unforgettable
experience, possibly customizable and gratifying.
In any case, the
route change of the consumers should not be seen as a deal breaker. On the
contrary, the retailers should consider it as an opportunity to detect the
weaknesses of the products Supply Chain and to think about innovative business
models based on customer-oriented strategies to run faster than the Fashion
Industry. It is both a technological and
cultural challenge which brings together all the Fashion Players led by common
keywords: digital innovation and lead nurturing.
Have you ever seen the perfect sneakers or handbag while window shopping, only to be disappointed when you enter the store and find they don't have your size or desired colour? Well, these events are more common than one can imagine. It’s a known truth that inaccurate tracking systems and poor visibility result in a series of inefficiencies within the Supply Chain. The effects of a sub-optimal Replenishment can disappoint the performance expectations and reduce the degree of satisfaction of loyal customers, putting the business at risk.
First of all,
the Retailers should bear in mind that the biggest obstacle to reaching sales
goals is the demand high variability, with the addition of the difficulties of
managing seasonal/non-seasonal items. For this reason, a flexible system to
re-assess goals and strategies should be dynamic and scalable.
Being a
recurring theme, the complexity of the Replenishment process are rather
well-known by the Retailers. The most common issue emerging while debating with
the experts of the sector is that related to the limits of sub-optimal
allocation processes: this approach relies on the long-term experience of
specialists who combine their expertise with a good amount of intuition in an
attempt to anticipate the future demand. This method, that could be defined as
“manual”, impacts several fronts: the shop shelves may be empty, the sales may
decrease, the level of CO2 produces may raise due to adjustment replenishments
and not least the customers’ expectations are disappointed. It is recommended
to avoid this last situation, as it makes the Fashion Luxury Industry a unique
and exclusive sector.
The FAIRE
project originates from these assumptions and the basic idea is that the
problems of the Inventory Management must be solved abandoning algorithms bases
on statistical formula and preferring a proactive methodology which implies
real-time monitoring of the stock and higher visibility on the entire Supply
Chain. Hence the need to rely on
technological solutions which have been supporting many IT fields for many
years: the future is the Artificial Intelligence, also known as AI.
From Siri/Google
Assistant on our smartphone to the facial-recognition app, up to medicine or
finance, the AI made its way in a wide variety of sectors and nowadays it is
not frowned upon anymore. Instead, it has a considerable impact on modern
industrial processes to the point that many companies are reaching a remarkable
competitive advantage on the market.
Considering the
Fashion Industry, introducing AI solutions means to look to future scenarios in
which human choices turn into data to analyze and consider in forecasting the
consumers’ next moves.
The FAIRE
project aims at creating a digital innovation HUB in the Fashion&Design
sector where companies can interact and suggest technological solutions able to
offer new experiences to the final consumer and to increase the efficiency of
the product life cycle internal and external processes.
As partner of
the FAIRE project, we are making a contribution to introduce Supply Chain
Planning techniques based on one or more training cycles: to do so, we focused
on the most performing area of AI, that is Machine Learning, the sector
involved in the management of mutable algorithms alterable through the
experience. As it happens for human beings, the system is able to “learn”,
shifting results and strategies in relation to the experience, the context and
teachings learned over time.
The typical
patterns of Machine Learning allow us to shape mathematical models similar to conceptual
tools with the purpose of defining the structure of each object employed for
the solution and the item features, including meta data. This last represents a
sort of calling card for the products, as it contains visual features and
composition information such as color, material, shape, variations and further
details. Providing this information is crucial when comparing data during the
process.
Together with
our project partner DSTech, we are modeling neuronal networks which can convey
to Stealth® The Fashion Platform previsions on optimal Replenishment for single
store or data, after receiving training data to process. Future training and
potential modification in their model improve the networks level of accuracy. We focus exactly
on the predictive ability of Machine Learning to realize the effect described
by Wayne Gretzky as follows:
“Skate to where the puck is going, not where it has been”
This means that
looking back to the past is useful only in an effort to forecast the future.
Our long-time experience can help us staying one step ahead of the sales
changes. Five months
after the beginning of the project, we are now working on the initial steps of
the solution definition. We decided to opt for an open architecture in order to
facilitate the integration of Stealth® The Fashion Platform with AI digital systems of the present
and of the future, avoiding any limits for our customers when choosing the most
suitable IT solutions. As soon as we get the first results, we hope to provide
the Store manager with an optimal prevision of Replenishment to optimize the
company planning processes and to align demand and offer as accurately as
possible.
Replenishment:
how and when? Stealth® supports its customers with new developments and prepare
them to face unexpected events and mutable scenarios with efficiency. Human
beings thinking ability and intellect can’t be never replaced, but AI and
Machine Learning can facilitate success opportunities and improve the results
both in quantity and in quality. The challenge is to listen to the consumers’
voices to provide targeted and efficient solutions. Maybe one day when people
will go shopping at one of our clients’ shop, they’ll see the desired product
is available in store thanks to our neuronal networks.
