Mckinsey & Company, a management consulting firm, has issued State of Fashion Technology Report 2022.
As per the 64-page long report, in 2021, fashion companies invested between 1.6 and 1.8 per cent of their revenues in technology. By 2030, this figure is expected to rise to between 3.0 and 3.5 per cent to keep up with digital natives and create a competitive edge.
The operational potential of technology is becoming ever more apparent. McKinsey analysis shows that fashion companies that now embed AI into their businesses models could see a 118 per cent cumulative increase in cash flow by 2030.
The report reads that fashion’s five key technology themes include metaverse reality check, hyperpersonalisation, connected stores, end-to-end upgrade and traceability first.
On the base of McKinsey Apparel CPO Survey 2021, the report says that more than 60 per cent of fashion executives believe creating integrated digital processes throughout their organisations will be amongst their top five areas for digitisation as they look to 2025.
Similarly, more than 50 per cent of fashion decision-makers say traceability will be a top-five enabler of reducing emissions in their supply chains, but many brands currently have visibility over only direct supplier relationships.
