We’re back with part three of our five-part blog series expanding on our Digital Maturity research. As a refresher, our five key insights from the research are below:
Barriers to Digital Product Creation (DPC): Retailers must overcome barriers to DPC adoption, such as insufficient organizational support, funding and talent.
External vs. Internal Resources: Retailers can use different types of resources for 3D assets and materials, from internal teams to third-party vendors.
Maturity: There has been a rapid increase in maturity since 2020, which will continue through 2024, albeit at a slower rate.
Investment: To support the rapidly increasing maturity level, we will see huge growth in DPC investment over the next two years.
Technology Adoption: Despite high maturity and planned investment levels, there is substantial room for increased adoption of key underlying DPC technologies.
For this blog, we sat down with several Kalypso subject matter experts to better understand DPC’s current maturity in the market. In addition to the below article, we invite you to watch a recent interview with Kalypso subject matter experts on the same subject: Digital Product Creation’s Teenage Years.
Contextualizing the Data
There is no doubt that digital product creation is rapidly maturing in the RFA industry. Just as digital tools such as Adobe Illustrator and Adobe Photoshop augmented and largely replaced physical sketches, DPC tools like smart 3D renderings have begun to supplant their 2D predecessors, with their applications not limited to design, but expanded into manufacturing and sales. Survey results suggest that many companies have already applied DPC solutions company-wide, with an average maturity ranking of 4.05 out of 5.
But wait, does that mean that digital product creation is already mature? Will Yester, global digital director at Kalypso, explains why that isn’t the case.
“When we talk about maturity in the research, I think the term is a little misleading,” says Yester. “What we are really talking about is how mature the initial adoption of DPC tools is among industry leaders. Companies have recognized the value that digital product creation brings to the table, and most of them have already adopted it, but that doesn’t mean they are mature in it.”
Brendon Marczan agrees, citing some of the reasons the survey data may be confusing to some and offering clarification. Marczan explains that it's hard to grade maturity because DPC has multiple applications and multiple axes for comparison and growth. It’s more of a capability than a solution, and capabilities don’t have an end of life in the same way a solution does. Even after a solution ends, a digital product creation capability goes on, continuing to improve and grow increasingly interconnected with other processes throughout the product’s lifecycle.
In the Market
With these insights in mind, understanding DPC’s maturity in the market becomes more complicated than a simple rating scale. Companies assessing their own DPC capabilities will need to not only consider how DPC technologies are implemented in one instance, but across their entire value chain, from Design to Make and Sell. Additionally, they will need to understand how well these technologies work with one another and other existing digital solutions.
“We view DPC as an end-to-end digital process,” says Alison Coddaire, senior manager, weighing in on the market maturity assessment. “In that respect, the market is still very much in its teenage years.” Despite the market’s adolescence, there is no doubt that the adoption of DPC has accelerated remarkably in the last few years, due in large part to the effects of the pandemic.
Esteban Garza, adds, “Covid definitely made clients realize the value and intention of DPC. All the luxury brands with operations in Asia and Italy were hit hard and early. Leadership felt the need to go 100% into some of their DPC capabilities, or else be left without a means to sell their products.”
This pushed some clients to adopt DPC almost overnight. “All the sudden, the physical showrooms where they typically brought their wholesale buyers were completely shut down," Will Yester explains. That was a critical part of some companies’ business models, so immediately a digital showroom went from an interesting concept to a real business need. Covid was the big push for DPC. "It made it real, and it made it valuable to the business overnight."
Looking to the Future
Given Covid’s role in DPC’s accelerated maturity, company leaders are likely now considering how DPC will be used in a post-pandemic market. Coddaire says it's going to start looking different because companies are no longer in emergency mode. They will start focusing on how to optimize this technology and use it in different parts of their business models.
Jacqueline Collins adds another market consideration into the mix. “We also have to think about the current state of the economy,” says Collins. “Some companies are focusing on optimization as opposed to investing in new types of tools as they start to experience some of the early impacts of an economic downturn.”
In response, Marczan outlines why this wait-and-see strategy could prove detrimental to a company’s long-term strategies. “The fashion industry is always going through some kind of recessionary issue, but that doesn’t mean you don’t invest in things,” says Marczan. “It depends on the leadership team. Some think they need to cut, cut, cut down on costs, but others see investment as an opportunity to survive and thrive by implementing technology that automates processes and increases efficiency.
Even if companies agree to invest in technologies like the foundational ones that enable DPC, their overarching strategy and implementation are going to have a profound impact on the ultimate ROI.
Instead of investing in isolated capabilities, Garza recommends companies:
Define collaborative bonds between brands and vendors
Build out a render pipeline
Connect assets between systems
Create experiences for both internal and external users
Organizations need an overarching implementation strategy that requires a vision of an end-to-end complimentary process instead of a specific capability. Regardless of business strategy or current market conditions, all data and professional opinions support that DPC is on the rise. Even in its teenage years, DPC has shown its proof of value, from providing new design capabilities to enabling digital showrooms when physical ones were impossible.
Any company uncertain about whether to invest in DPC may want to ask themselves, If DPC is this capable as a teenager, how valuable will it be when it reaches adulthood?
Will's experience with high tech research and development ignited a passion for a career in new product development and innovation. At Kalypso Will is active in both the P&PM and Business and Innovation Strategy practices at Kalypso. He focuses on helping clients improve the way they make decisions and manage innovation initiatives using gated development models and portfolio management. Will has deep experience implementing P&PM software and can advise clients on system selection, process design, implementation approach, governance and sustaining activities.