Retail Clothing Industry Report

American University in Bulgaria Spring 2015 | Tereza Georgieva, Anna Stoycheva, Desislava Alexandrova, Elzem Kenan

H&MRetail Clothing Industry Report

ContentsIndustry Overview2PESTEL Framework2What political factors influence the industry?2What economic factors influence the industry?2What social factors influence the industry?4What technological factors influence the industry?5What environmental factors influence the industry5Conclusion: Which of these factors are most likely to be the key drivers for change for theindustry? Is technology one of the key drivers?6Five Forces FRamework6What does the bargaining power of suppliers in the industry look like?6What does the threat of new entrants within the industry look like?7What does the bargaining power of customers in the industry look like?7What does the bargaining threat of substitutes within the industry look like?7What does the competitive rivalry within the industry look like?8Top industry players8Countries8Organizations9Companies10Industry information dissemination11How does the industry get information out to members & public11Business of Fashion11Just-in-Style:12Past Industry Technology/IS/MIS13What was trendy in 2013?13Mobile13Integration13More and more social14Current industry technology trends14Trends15Are you on the list?15Goodbye supermodels15SHOP in, shop out15Why is this happening?16Future industry technology trends and forecasts16Top 6 Tech Trends in the Fashion Industry16Smartphone commerce16Wearable Technology173d Printing17Fashion shows as tech events17Designing for online18Tech in the physical space18

Industry OverviewPESTEL FrameworkWhat political factors influence the industry?The political and legal climate is a very important factor to evaluate when looking at the success of the apparel industry globally. Governmental barriers to trade, minimum wages, protectionist policies, bureaucracy and corruption are some of the various factors that affect the apparel industry. Government barriers to trade, as present in the EU for manufacturers outside of the EU can negatively affect the prices of the retailers. For examples, retailers entering from outside of the EU have to pay a tariff and thus increase their prices on this market which can in turn affect their marketability and success. Similarly, the US offers more favorable conditions to American retailers and imposes tariffs on European retailers. High minimum wages can also pose problems to the apparel industry as this would mean higher cost of labour and higher prices on the clothes. A trend in the countries (like Cambodia) that have started posing stricter rules and regulations on working conditions and wages have suffered because companies have stopped operating in them and chosen to move to other countries with less strict rules (Haiti, Bangladesh). Another political factor would be high levels of corruption and a dysfunctional bureaucracy. These can hinder the companys development, legal status and profitability. A slow decision-making process due to the bureaucracy can be expensive and dysfunctional. Finally, poor working conditions and child labor can lead to protest, as the Bangladesh 2013 garment workers protest. The protest in Bangladesh shut a lot of factories which led to a loss of hundreds of dollars for the manufacturers. Bulgaria on one hand has an advantage since legally its law is part of the EU AQUIS legislation which ensures favorable conditions for doing business in Bulgaria and could serves as a stimulus for companies to invest in the country. Furthermore, the labor legislation in Bulgaria is favorable for employers. Bulgaria ranks 48 on Rigidity of employment index from 140 countries worldwide and only 4 EU member states have better value of that indicator (World Economic Forum, 2011).This low rigidity of employment stimulates the investments in the country, especially in time of economic crisis. Corruption on the other hand and a relevantly inefficient government are main barriers in doing business in Bulgaria (World Economic Forum, 2011) and they negatively impact the investment climate in Bulgaria. Also, the conservative traditional approach to governance rather than modern eGovernance,with 70% online availability and interactivity of public services (supply side), Bulgaria is on the bottom of the eGovernment implementation. Onlyfour countriesin the EU have worse level of the indicators than Bulgaria. (Eurostat, 2011) The ineffective eGovernment is a barrier to further investments in Bulgaria.What economic factors influence the industry?One of the first industries that would be impacted negatively due to an economic downturn would be the apparel industry. As the 2008 economic crisis came about one of the first things that people cut on their shopping lists was clothes. Overall theglobal garment trade fell by 0.5%, there was a decline in retail sales in order volumes and factory closures and job losses in exporting countries. In Europe - The two largest fast-fashion retailers Inditex (Zara) and H&M reported drops ofabout 15% in their 2009 first quarter profits, however both rebounded in April. Inditexs sales rose 9%between early May and June, whereas H&Ms April same store sales rose 8%. So an economic downturn can have a large negative impact on the apparel industry. Another factor that affects globally the apparel industry is wage rates. As some countries introduce minimal wages some fashion brands might not be able to produce their clothes and accessories at the needed expenses because of the higher labor costs. A trend has been apparent in the recent years, countries like Cambodia, who are promoting compliance with the law and minimum wages, have been punished by retailers for their decisions by having less orders there, when the countries with the lowest-wages like Haiti and Bangladesh who are doing nothing to ensurerespect for labor rights are being rewarded by increasing orders. (REPORT: The apparel industry and the economic crisis: How is the crisis affecting apparel production andgarment workers? by the Maquila Solidarity Network) Other economic factors that might influence the apparel industry would be unemployment, credit availability and the market trends which all are interconnected and often depend on the general financial health of the given market since when the economy is booming, people are buying, there is high-skilled personnel available and there are favorable credit terms while in an economic downturn, there is usually high unemployment of low-skilled personnel and lower purchasing capacity on the side of the buyer so slower business growth or even a decrease.In Bulgaria, there are a few important economic factors. On one hand, Bulgaria is a good place to for outsourcing since it has been a member of the European Union since 2007 and offers a way to enter the European market. Bulgaria has the lowest tax levels compared to other EU countries and provides favorable investment conditions. The average effective tax rates (EATR) are the lowest in the EU (8.8%) compared to considerably higher the EATR (26.3%) in EU15 and in the Member States referred to as the EU+12 (17.4%). Bulgaria also has a stable (fixed) exchange rate to the Euro which minimizes the risk of currency exchange rates but still Bulgaria is not a member of the Euro Area. In addition, Bulgaria has the lowest labor cost in the EU of 3.8 Euro per hour (Eurostat, 2014). On one hand the relevantly cheap labor is attractive for the investors. On the other hand, the low level of salaries is one of the factors stimulating the brain drain form the country.Some of the negative economic factors that can affect the apparel industry in Bulgaria is Bulgarias low nominal GDP - around 52 billion Euro for 2014. The low GDP and the low wages affect the purchasing power of Bulgarians and there is a higher demand for cheaper goods. Furthermore, the disparities across the municipalities affect the demand. Despite the recent reforms enacted to improve the business start-up conditions and progress in the area of paying taxes, Bulgaria's world rankings still lag behind the best performers in the EU and world comparisons in Doing Business. In the WB Doing Business Report the country ranking worsened (from 44 in 2010 to 51 in 2011) (The World Bank, 2011).

What social factors influence the industry?Socially, there are also many factors that can affect the apparel industry. These can be education level, general attitudes towards work, imported good, leisure, age of the population, lifestyle choices, and immigration levels. Education level can really affect the development of an apparel brand in a certain country. If there are no high-skilled people there would be no possibility for opening an office there and outsourcing some of the companys services. Furthermore, the social attitudes towards work or imported good or leisure time can also affect the product the company offers or the style of work it practices. For example, certain countries might have an understanding that they should buy only local products and thus not buy the companys imported products. Or maybe the lifestyle and work ethic are very different from those adopted in the companys headquarters which is something of course that could pose a possible problem. Culture is also essential, for example, the clothing manufacturer needs to create styles that appeal to those of different cultures, especially if those cultural groups represent large enough segments of its market. Also, an aging population may pose a problem for both the designers and the company. The lack of young skillful labor might be a problem as well as the different demands for clothing of the raging population. There might be an increase the demand for larger jeans and pants sizes, such as relaxed or loser-fitting styles. Similarly, obesity levels in developed countries so designers need to design larger models and develop special sections in their stores. In Bulgaria, a major problem is aging and decreasing population. The demographic projections for Bulgaria show that the population will decrease from 7.4 million projected for 2015 to 5.9 million projected in 2050 (Eurostat, 2011). The decreasing and agingpopulation will have a negative impact as it will decrease the market size for the apparel industry and there will be less young high-skilled specialists who can work for companies of this industry or purchase their products. Brain drain can also be considered a major barrier to the Bulgarian market. Bulgaria ranks 127 out of 142 countries worldwide. (World Economic Forum, 2011). This again decreases the high-skilled population and makes Bulgaria a not so attractive destination for investment. Finally urbanization is a major trend in Bulgaria. Around one-third of the population lives in the seven biggest cities. Official data claims 1.3 mm people (17.5% of population) live in the capital city of Sofia but many people do not change their address registration when they come to live in the city. In the last 10 years the number of people officially living in Sofia has increased by 10.3%.Urbanization is explained by the considerable difference in living standards and working conditions between urban and rural areas. For an apparel business this could have two sides - the country side could be used for building factories and using the low wages and the high unemployment to gain a competitive advantage, while the cities would provide with the market since the cities have the people with the purchasing power.

What technological factors influence the industry?The technological factors that affect the apparel industry are the basic infrastructure level, the rate of technological change, internet access and infrastructure, investment in research and development. The basic infrastructure will affect the transportation costs - the better the infrastructure the faster the delivery, the better the service. A good infrastructure could also mean access to reliable internet that is much needed to any retail industry since the apparel industry needs to constantly report on sales and products that are low in inventory and need to be produced again, which all happens through the internet. Furthermore, the level of technological change strongly affect the apparel industry since this is a fast moving goods industry. This means that if a competitor has a stronger technological advantage - maybe a better CRM software, it can really gain a competitive advantage fast. When looking at Bulgaria, the fast-growing IT sector in Bulgaria could be a great place for apparel industries to seek new software for optimizing their transactions. As Bulgaria is still in the beginning of developing as an IT hub, the services are still cheaper and can help companies gain a competitive advantage. Also, Bulgaria is considered to have the third highest speed of Internet 1,611KBps(Pando Networks, 2011) which again gives a competitive advantage and can be a plus for any apparel company that might decide to move some of its operation in Bulgaria. Even though Bulgaria offers great conditions for using its IT sector and fast internet, only 14.4% of regular internet users aged 16 74 have made online purchases in 2011 which means the e-market in Bulgaria is still underdeveloped. Also investment in research and development (R&D) in Bulgaria is among the lowest in the EU at 0.53% of GDP in 2009, i.e. around 4 times less than the EU average. The very low level of private R&D investment in the economy (0.16% of GDP) is particularly worrying and can be attributed to the prevalence of low technology sectors in the economy. A substantial increase in R&D spending will be instrumental for raising economic competitiveness and the government has set a national target of 1.5% of GDP for 2020. However, a 4G network is soon to be released in Bulgaria which makes a country a good place for investment especially for fast-moving industries like the apparel.What environmental factors influence the industrySome of the more important environmental factors for the apparel industry are the weather and climate change, environmental regulations, recycling, renewable energy and support for it. The weather and climate change are especially important for the apparel industry since unfavorable weather conditions could decrease the harvest of cotton and the global distribution of cotton. Raw materials and their availability is also important for the clothes producers. Environmental regulations, especially in developed countries can play a bad role and make production costlier and slower whereas developing countries and the lack of regulations can seriously damage the environment even though it would provide cheaper and faster production. Furthermore, support or opposition to green energy and recycling can be a game changer for apparel companies. Some countries, like the EU members demand and support the use of renewable energy and recycled materials thus investing in such practices in the European market would be essential. On the other hand, investing in renewable energy in countries where green and eco policies are not a topic of importance, might put prices up and affect sales and profits. Bulgaria, as part of the EU has strict green and recycling policies so an apparel industry looking to operate in Bulgaria will have to calculate the cost of producing under EU energy efficiency and green legislation.Conclusion: Which of these factors are most likely to be the key drivers for change for theindustry? Is technology one of the key drivers?In conclusion, the key drivers for change in the coming years would be technology. The better the CRM system or inventory tracking, the better the supply will be. The more an apparel industry knows about its clients through its CRM, the better consumer experience it will be able to bring. Technology may be one of the most important factors since economic, political, and environmental factors would affect every apparel retailer regardless when the technology is the only element that can be fully controlled by the companies and it will become a major game-changer.Five Forces FRameworkWhat does the bargaining power of suppliers in the industry look like? Large number of substitute inputs; When there is a large number of substitute inputs, suppliers have less bargaining leverage over producers. This is due to competition among substitutes. This is an easy qualitative factor to overcome, so the investment will not have to spend much time trying to overcome this issue. High competition among suppliers; This is positive for the clothing industry, because it reduces the prices of products; The high competition among suppliers has a positive impact for companies. Diverse distribution channel-The more diverse distribution channels become the less bargaining power a single distributor will have. This affects the industry positively Low cost of switching suppliers the easier it is to switch suppliers, the less bargaining power they have. Volume is critical to suppliers-When suppliers are reliant on high volumes, they have less bargaining power, because a producer can threaten to cut volumes and hurt the suppliers profits. High supplier power when the product is unique;What does the threat of new entrants within the industry look like? Strong brand names are important-If strong brands are critical to compete, then new competitors will have to improve their brand value in order to effectively compete. Customers are loyal to existing brands-It takes time and money to build a brand. When companies need to spend resources building a brand, they have fewer resources to compete in the marketplace. Industry requires economies of scale-Economies of scale help producers to lower their cost by producing the next unit of output at lower costs. When new competitors enter the market, they will have a higher cost of production, because they have smaller economies of scale. One trend that started over a decade ago has been a decreasing number of independent retailers. Walk through any mall and you'll notice that a majority of them are chain stores. While the barriers to start up a store are not impossible to overcome, the ability to establish favorable supply contracts, leases and be competitive is becoming virtually impossible. Their vertical structure and centralized buying gives chain stores a competitive advantage over independent retailers. The Clothing industry has huge capital requirements for plant & machineries, land, raw material and advertisement endorsing and startup losses. Government policies are friendly for the industry Conclusion: Relatively easy entry if your finances are good.What does the bargaining power of customers in the industry look like? The product is important to the customers -When customers cherish particular products they end up paying more for that one product. Large number of customers-When there are large numbers of customers, no one customer tends to have bargaining leverage, which helps the industry.What does the bargaining threat of substitutes within the industry look like? The tendency in retail is not to specialize in one good or service, but to deal in a wide range of products and services. This means that what one store offers you will likely find at another store. Retailers offering products that are unique have a distinct or absolute advantage over their competitors. There is not really a substitute for clothes, so rivalry is intense. However, there is a substitute to retail chains and its e-commerce. Many companies have their own websites which they use for selling their products.

What does the competitive rivalry within the industry look like? Direct competition. High. It is the main factor in the industry. In the modern market it is really hard to attract new customers. Advertizing costs a lot and furthermore, it is hard to create really attractive advertizing, to create something really new. There are a lot of brands existing in the market. They try to differentiate themselves in order to find their niche and decrease competition, but nonetheless in every niche there are 3-5 direct competitors of different size, but in some locations there are only 1-2 firms and so these locations are quite attractive to the new entrants. Competition primarily based on the customer image that firm created and quality, price is the second thing (I mean +-15% of the price, of course difference in several times makes sense). E-commerce also forces competition because it seriously increases availability of the product in any location.[footnoteRef:2] [2: http://improject2012.blogspot.com/2012/03/porters-five-forces-analysis.html]

Fast industry growth rate (Clothing Industry)-When industries are growing revenue quickly, they are less likely to compete, because the total industry size is also growing. The only way to grow in slow growth industries is to steal market-share from competitors. Exit barriers are low (Clothing Industry)-When exit barriers are low, weak firms are more likely to leave the market, which will increase the profits for the remaining firms Large industry size (Clothing Industry)-Large industries allow multiple firms and produces to prosper without having to steal market share from each other. Retailers always face stiff competition. The slow market growth for the retail market means that firms must fight each other for market share. More recently, they have tried to reduce the cutthroat pricing competition by offering frequent flier points, memberships and other special services to try and gain the customer's loyalty.[footnoteRef:3] [3: http://www.investopedia.com/features/industryhandbook/retail.asp]

Top industry playersCountriesTextile production is more capital intensive than clothing manufacturing and therefore tends to have higher exit barriers and longer establishment lead times. The cost structure of the industry and the capital intensity of the manufacturing approach means that minimum orders are relatively large. Manufacturers have limited ability to swiftly adjust production to consumer tastes. The capital intensity of textile manufacturing has risen significantly over the past 20 years, as has firm concentration. However capital intensity is still generally much less than that of manufacturing as a whole. For clothing, China is the biggest exporter, followed by the European Union (including intra-EU trade) with a 35% share of world garments exports. Overall, Asia accounted for 57% of world clothing exports in 2010. The major importers of clothing are the EU and the US, with Japan trailing in third place. Over the past two decades or so, China has gained a dominant position in textile and apparel manufacturing at the expense of manufacturers in more developed countries those based in nations such as U.S. and Canada in particular have suffered a long period of decline. To consumers in Europe and North America however, the dominance of China as an exporter of low cost but competitive quality goods as meant lower ination, lower costs of living and higher living standards. Long the manufacturing base for the developed world, Chinese businesses are now being squeezed from many angles. Costs, particularly wages, are rising quickly while the appreciation of the Yuan has reduced protability. Though shipping costs are well their highs, factor in the impact of rising oil prices on freight costs, and China appears to be fast losing its competitive advantage.Organizations American Apparel and Footwear Association (AAFA): was established August 2000 through a merger of the American Apparel Manufacturers Association (AAMA), Footwear Industry America (FIA) and the Fashion Association (TFA). The national trade associations combined membership currently accounts for more than $225 billion in annual U.S sales.

American Apparel Producers Network (AAPN): They are an international group of companies that produce for the American market. Since 1981, a private sector, non-profit, members-only, business network of over 600 company owners and senior executives organized industrially worldwide to produyce apparel for the US market from North America, Mexico, Caribbean, Central America, South America, Europe, North Africa, South Asia, Southeast Asia.

The Association of the Austrian Clothing Industry: is an independent organization within the Austrian Economic Chamber. The association acts on bnehalf of the interests of its member in contact with national and EU authorities, within the Austrian Economic Chamber, versus unions, up-and down-stream parts fot he textile chain and other national and international professional associations. Providing an extensive range of services the Association of the Austrian Clothing Industry strengthens the competitiveness of its member companies. Members of the association of the Austrian Clothing Industry are also related industries like the bedding industry, industrial laundries and dry cleaners, industrial manufacturers of buttons and flags as well as automotive textile companies.

Association of Textile Clothing and Leather Industry (ATOK): the foremost enterprise association in the Czech Republics textile, apparel and leather sector the mouthpiece of Czech producers towards the countrys public and government institutions and organizations abroad and important platform for dialogue and formulation of social attitudes and needs of Czech textile manufacturers.

Apparel British Columbia Association: is a self-sustaining, member-driven association with the mandate to enhance and strengthen the viability of the British Columbia apparel industry in a competitive and global environment through advocacy, marketing, education, mentorship, liaison and the setting of ethical standards.

Clothing Manufacturers Association of India (CMAI): CMAI of India is the oldest and one of the most representative association of the Apparel Industry in India. With a Membership of over 20000 Manufacturers and Retailers. The Association has branches in Pune / Bangalore / New Delhi. Established over 40 years ago, The Clothing Manufacturers Association of India has been acting as catalyst of change, collaborating with the Government in matters of policy that impacts the future of the Apparel Industry. It has been making representations in matters of Sales Tax, Octroi, Entry Tax, VAR etc. for the Domestic Sector and in matters relating to Export Policy, procedures etc. for the Export Sector. The CMAI also acts as a Guide for its Members on meeting various Government Regulations.

CONTANCE: The Confederation of National Associations of Tanners and Dressers of the European Community (COTANCE) is the representative body of the European Leather Industry. It is a non-profit organization established in order to promote the interests of the European tanning industry at international level. Apart from representing European tanners and dressers, it also has the mission of promoting European leather both in the European and international markets. COTANCE is the only qualified interlocutor representing the views of the European Tanning Industry. It has gained a wide recognition both internally and externally as the reference body for the European leather industry. COTANCEs activities and policies focus on promoting the economic growth and sustainable development of the European tanning and clothing industry.

Bulgarian Association of Apparel and Textile Producers and Exporters (BAATPE): business to business web site for the apparel industry of Bulgaria. Associated with Italian web site ItalianModa.com: Promotes Bulgarian apparel and Textile Exports.

Companies H&M - Hennes & Mauritz AB (H&M) is a Swedish multinational retail-clothing company, known for its fast-fashion clothing for men, women, teenagers and children. H&M exists in 55 countries with 3,500 stores and as of 2013 employed around 116,000 people. The branding consultancy Interbrand ranked the company as the twenty-first most-valuable global brand in 2009 and 2010,[63] making it the highest-ranked retailer in the survey. Its worth is estimated at $1216 billion. The full company name Hennes & Mauritz was rebranded to H&M to simplify worldwide perception of the brand.

Zara - Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortega and Rosala Mera. Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain, designing, manufacturing, and distributing its products. There are over 2000 Zara stores located across 88 countries. Some Zara stores operate as Lefties stores instead of Zara, a brand for low-cost fashion.

Calvin Klein - The company is headquartered in Midtown Manhattan, New York City and is currently owned by Phillips-Van Heusen. The most visible brand names in the Calvin Klein portfolio include: Calvin Klein Collection (black label, upscale top-end designer line) Calvin Klein, Calvin Klein Sport, Calvin Klein Jeans, Calvin Klein Home, The Khaki Collection, Calvin Klein Golf, Calvin Klein Underwear, CK one Lifestyle brand, Calvin Klein Watches + Jewelry.

Industry information disseminationHow does the industry get information out to members & publicThe ways in which the clothing industry gets information out to members and the public are through social media, magazines, both fashion and non-fashion websites and bloggers, who they use to promote their products. Some websites concerning the clothing industry: -http://www.fibre2fashion.com/news/apparel-news/-http://apparel.edgl.com/news/top-6-tech-trends-in-the-fashion-industry94135-http://www.businessoffashion.com/-http://www.economist.com/topics/textile-and-clothing-industry-http://www.textile-platform.eu/-http://www.just-style.com/insights/-https://www.fitnyc.edu/6829.aspBusiness of FashionThe Business of Fashion has gained a global following as an essential daily resource for fashion creatives, executives and entrepreneurs in over 200 countries. It is frequently described as indispensable, required reading and an addiction. Founded in 2007 by Imran Amed, a fashion business advisor, writer and digital entrepreneur, The Business of Fashion began as a project of passion, aiming to fill the void for an informed, analytical and opinionated point of view on the fashion business. Today, the website has grown to leverage a network of savvy writers and fashion insiders in style capitals around the world, delivering fashion business intelligence on emerging designers, disruptive technologies and global brands that are making their mark on the industry at a time of unprecedented change.

Just-in-Style:Just-style.com is the online news, insight and research portal for the apparel and textile industry.Since 1999, just-style has provided independent, authoritative and forward-thinking textile industry information. The media identifies and evaluates the clothing industry's major milestones and trends, and is recognized by the apparel sector as the essential business tool for clothing professionals worldwide. Apparel and textile executives can pay a membership fee and receive exclusive apparel and textile content. Also, the website offers paid research reports about the apparel and textile industry. Just-in-style also offers extensive information on the new technologies that emerge in the clothing industry and have specific rubrics dedicated to the largest clothing giants like H&M, Nike, GAP, Zara, etc.

Past Industry Technology/IS/MISWhat was trendy in 2013?MobileSusan Reda, executive editor of STORES Media, writes, The year just concluding will be remembered as the one in which mobile became embedded into the lives of consumers and thus into the hearts of retail businesses large and small.Mobile developers agree. According to a survey by Appcelerator and IDC , 93 percent of mobile developers anticipate that it is likely to very likely that most retail companies will have enabled mobile commerce in 2013 as consumers increasingly reach for their phones and tablets even while shopping in a physical store. Consumer behavior continues to underscore this transformation. Appcelerator found that nearly two-thirds of developers also believe that consumers will make more purchases via their mobile phone than their credit card in 2013.IntegrationFounder of the direct-to-consumer shoe merchant Sole Society Brett Markinson tells FORBES the emerging direct-to-consumer E-commerce model recently being discussed as the Next Big Thing is only the beginning of the evolution pushing haute couture into the digital age. Building and distributing a successful brand in the Internet era is about addressing the new behaviors of an evolving customer base by leveraging the changing landscape and its new dynamics, he says.

Markinson believes the discussion has to shift from e-commerce vs. offline commerce to integrated commerce. The consumer does not distinguish. They want to buy cute, on-trend products at great values wherever they happen to be. They want to engage with cool brands that understand their interests and proclivities. The DNA of the web must be an intimate part of the fashion brands of the future.

Those retailers who find a way to integrate will have a killer brand. Says Markinson, One needs to be where the customer is, with both your messaging and your product. If you havent already noticed, consumers today are both online and offline, and sometimes bothonline while shopping offline. Online they are sharing, friend validating, researching, learning and developing a point of view. Offline there is touching, brand comparing and brand associating. All of this drives the brand of the future. Finding the formula to leverage that online/offline dynamic is critical.More and more socialRichRelevance, a company that powers personalized e-commerce experiences released some interesting findings about social medias role in retail. Namely, traffic from Pinterest has doubled in the last year while Facebook saw its share decline to just 90% (from 95% in 2011).Rich Relevances chief marketing officer Diane Kegley tells FORBES, We believe that social is going to have an increasing impact in 2013. We feel that the role of social media is to generate awareness, not direct sales. While traffic referred from social networks is low less than .5% according to our data it has grown 30% year-over-year.Kegley notes that retailers are getting smarter about how to use the social channels to generate customer delight. She points out how Target recently awarded gift cards to a number of customers who were tweeting about them over the Thanksgiving holiday weekend. Social media is one element in [retailers] arsenal of developing brand awareness across multiple channels. All of these elements, including social media, shape or form the way that a consumer hears about a brand or offering. This contributes not only to awareness, but actual product decisions.[footnoteRef:4] [4: http://www.forbes.com/sites/lydiadishman/2012/12/17/three-important-retail-trends-for-2013/]

Current industry technology trendsTrendsTodays media landscape is constantly changing: new cultural influences appear, innovative technologies changes the way people behave and emerging platforms make marketing richer and brand experience more inclusive. Here are some current sightings on whats happening right now in how fashion brands and retailers starts to embrace digital solutions.[footnoteRef:5] [5: http://morgenland.se/current-trends-within-fashion-retail/]

Are you on the list?The macro trend of recognizing loyal consumers and giving back is clear in several fashion marketing activities.Aside from offering quality in products, many brands also create impact to the offerings. Instead of giving the VIP treatment to supermodels & celebrities, focus are on the actual shoppers. If you treat your fans well, the rest will follow. There are a clear trend in lots of brands that are offering exclusive access and limited edition for fans only, thus making them strong ambassadors.Example: YSL Devoted to Fans. Net-a-porter secret sale for Facebook fans onlyGoodbye supermodelsThe macro trend of using consumers as influencers are also becoming clear in the fashion industry as consumers are even making their way up on the runways. The term Idolism will soon be obsolete in describing someones once fanatic worship of hot shots celebrities. No longer she will be dominated nor intimidated, she is now her own fashion stylist, designer, and journalist. Fashion brands have to be aware to stay agile in their marketing strategies as trends is now under the stewardship of consumers. With easy access to social media platforms, everyone can be a model and fans have fans too.Example: Choo247 shoes. Free People display consumers wearing items using Instagram APISHOP in, shop outAs physical and digital retail space converge the shopping experience finds more places. Now with the all-pervasive SCREEN CULTURE, everything from bus stops to TV programs can be an outlet, as consumers armed with smartphones or tablets embrace innovative new applications and technologies to browse your collection and shop from the subway and all the way home. Consumers browse, shop and share anywhere with everything from interactive displays, sharable mirrors, QR enhanced items helping them to a richer brand experience.Example: Stella Mccartney/Selfridges interactive storefront with cameras.Why is this happening?Brands need to understand the accelerating shift of power from brands to consumers. They have to keep up with the fast-changing technology options and constantly learn to cope with consumers fickle-minds changing-hearts. Shoppers expect better service, and enjoy all-rounding shopping experience in both physical and digital space. They are utilizing technology that many fashion brands are slow to adapt to.Digital retail has reached critical cost that interactive displays and mobile connected stores are now able to actualize at much lower cost. Mobile consumer screen displays like iPad has also bridged the threshold between consumers & businesses.As big and strong brands develop their online offerings, integration becomes intuitive and easier to access. Consumers are able to explore and select their shopping preferences, and decide how and where they want to put their money at.Future industry technology trends and forecastsIn the fashion industry, if you aren't moving forward, chances are you are falling behind. The world of fashion has the capacity to change faster than ever in the digital era, and those with an eye on what's happening right now and a feel for what's coming next are in a powerful position to gain a competitive advantage.Make no mistake, we still put our pants on one leg at a time. However, everything else about those pants -- from how they were produced and marketed, to the way we shop and purchase them -- is changing as a result of modern times.While it's impossible to say exactly where technology will take fashion in the coming months and years, we do know it pays for apparel manufacturers and retailers to remain in touch with what's cutting edge. If you are looking for ways your business might be impacted by technology, consider these six prominent tech trends in the fashion industry.Top 6 Tech Trends in the Fashion IndustrySmartphone commerceThe numbers are in, and by all accounts they confirm the obvious: consumers are increasingly using their smartphones (perhaps twice as much as last year) to shop and purchase. According to Branding Brand CEO Chris Mason, "Smartphones are redefining the way retailers are connecting with consumers, and it's clearly being reflected in the bottom line."From mobile-optimized shopping experiences complete with virtual showrooms, real-time customer service and feedback, social media integration, and personalized data-driven advertising, fashion retailers are rushing to develop a mobile experience that meets the demands of todays shoppers.Wearable TechnologyYes, Google Glass and the like have finally hit the market to marginal impact, but wearable tech (still in its infancy) is breaking through in tangible ways that are just beginning to resonate with popular culture. We're not just talking about watches that serve as miniature extensions of computers and smartphones, but of apparel people actually want to wear, such as the Misfit Shine, which marries function with fashion as an elegant activity tracker that doubles as jewelry and transmits data to your iPhone via Bluetooth connectivity.And that's just the tip of the iceberg. Imagine clothing fitted with solar panels that charge your mobile devices, smart fabrics that optimize wearer comfort by adjusting color or texture based on environment, or apparel that purifies the air, omits fragrances, or transforms appearance in reaction to mood or sound simply for fashion's sake. It's all coming and more.3d PrintingThe future world of George and Jane Jetson is finally at hand, as 3D printing turns things previously thought to be impossible into reality. We've already seen 3D-printed couture looks coming down the runway from the likes of Iris Van Herpen and many others, and this disruptive technology is opening new doors to designers seeking innovation in both materials and processes for designing and producing clothing.What's next? Perhaps see it, buy it, print it shopping, in which a consumer spots a must-have article of clothing, completes the checkout transaction in a matter of seconds, and sits back to watch as their personal 3D printer whips up a custom fitted version right in the comfort of his own home.Fashion shows as tech eventsThe runway has always been about creating a spectacle and pushing the cutting edge, but today more than ever before, designers and production companies are utilizing technology to elevate events to new heights. From models coming down the runways appearing submerged in pools of water thanks to holographic projections, to viewing the action remotely in 360-degree panorama, fashion shows are as much a technological extravaganza as they are a forum to unveil the latest creations out of New York, London, Paris, and Milan.That's not even mentioning what's going on behind the scenes and in the crowd. Bloggers and retailers broadcast live from events, and guests plug into social media to voice their impressions and influence purchasing decisions of buyers and shoppers in real-time around the world.Designing for onlineIn an environment where you can't touch and feel, how do you best create fashion that captures the fancy of consumers? One part of the equation is in the way you present and market your brand, and the other has more to do with the visual aspects of the product itself.As a direct result of an ever-increasing amount of virtual browsing, visually impactful prints and richly textured fabrics are coming to the forefront of emerging fashion - and for good reason. 3D printing and software tools provide tech-savvy designers the room to run wild with creativity when it comes to colors, patterns, and daring new perspectives. Plus, retailers are also able to use technology to collect data metrics and interact and observe shoppers on social channels as a means of reading public sentiment and identifying emerging trends. This allows them to make strategic adjustments for greater consumer success.[footnoteRef:6] [6: http://apparel.edgl.com/news/top-6-tech-trends-in-the-fashion-industry94135]

Tech in the physical spaceFrom proximity marketing, to contactless checkout and everything in between, in-store shopping is being revolutionized through innovations that are both creative and functional. By adding technological elements and capabilities to the physical location, retailers can cultivate a more satisfying experience that meets the heightened expectations of modern shoppers.Features such as virtual fitting rooms where you can "try on" fashions without ever undressing, visual signage social media tickers that tally "likes" of individual articles of clothing, and scannable QR codes that trigger detailed product information and carefully crafted marketing displays on handheld devices are just a few ways retailers are using tech to engage shoppers in brick and mortar locations.