We’re back with the next part of our five-part blog series expanding on our 2022 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 discuss the driving forces behind the projected growth in DPC investment over the next two years, what companies need to consider, and what it means for companies that are choosing not to invest.
Considerations When Looking at Results
As we look at the results of our 2022 survey, it’s important to first contextualize the environment for companies at the time these survey responses were gathered.
Time of Survey
Kalypso manager Brendon Marczan notes that companies were still emerging from the height of the COVID-19 pandemic and the metaverse was being hyped by the media and a newly rebranded Facebook (now Meta). Tech companies were quickly hiring Mixed Reality (MR) talent, sometimes without even interviewing new employees. Many fashion retailers felt this pressure and were shaken by the early engagement from some high-profile sportswear and luxury brands.
When the 2022 survey was launched, there was no MidJourney, DALL-E, or ChatGPT. Instead, we had plenty of noise around NFTs and Web3.
Taking the survey results as relevant for a 2023 audience can lead to some out-of-date perceptions. Just think about how differently the industry is treating the Metaverse and the post-Covid shopping surges compared to a year ago.
Definition of Investment
It’s also important to note that the types of DPC investments organizations were planning to make at the time of this survey varied. Kalypso manager Sophia Lara points out that the DPC investments an organization makes depends on where the business fits in the market. “Luxury brands were leaning harder into investments in the metaverse and e-commerce, while mainline brands may be focusing more on elevating their website and customer experience.”
Nevertheless, investment continued to touch on people, process and tools, and included:
Expanding foundational technology such as 3D creation, DAM, or PLM
Integrating different tools or functional teams
Expanding connected data through product ecosystem
Training, upskilling, and onboarding
Upscaling teams to increase capacity
Hiring new talent, sometimes from unfamiliar industries
Conducting pilots into challenging product categories
Visioning and delivering on an end-to-end digital thread implementation
Evolution of Digital Technology
Digital creation technologies and their use in the fashion industry continues to grow and evolve. Every day there are new pop-up software solutions and more opportunities to bring ideas to life. Organizations are taking advantage of the data-heavy assets they have available to innovate in a collaborative way across business functions and with their supplier network. With that increase in collaboration, comes fresh ideas and problem-solving, blurring the lines between ‘product’ and ‘content’ creator.
We are seeing the fashion industry shift in both traditional operational and digital ways. The evolution of both process and solution is changing, which in turn affects how people do their jobs.
Alongside that, the industry is faced with a huge influx of new software features, applications, and vendors. While some edge-case applications like Adobe Substance have now become commonplace, new niche solutions are being born, aiming to simplify and automate a digital creation and content pipeline.
The rapid expansion of DPC investment during the pandemic has encouraged solution vendors to expand their reach. The fashion technology space, previously hyper-regional, has become global with new software and hardware presented from South East Asian innovation hubs. Retailers and their suppliers are now juggling more tech than ever before.
In the past year, it is not uncommon for major retailers to be considering:
Adding or shifting to an entirely new apparel simulation tool
Augmenting their product visualization with more complex 3D apps like Blender, Maya, and Cinema4D
Implementing and scaling a material management platform
Breathing new life into existing solutions by creating proprietary plugins
Launching virtual collaboration asset hubs to work faster with suppliers
Connecting their existing applications with integrations, providing data continuity and specification automation
Importance of Change Management
“As you invest in technology, you must think about the impact on how an organization currently functions”, adds senior consultant, Andrea Bell. “With potential organizational changes brought about by new technology investments, leadership must insure there is an investment in training and other resources needed by the people that will be impacted by the change.”
Investment in digital tools should always be coupled with analysis of its effect on people and process, regardless of whether it is a huge foundational platform or a discrete integration between two existing applications.
Technological change affects how people work, the speed they can achieve their goals, and the relationship between automation and job security. It takes time and nurturing to ensure that a pattern maker who is now working in 3D can appreciate the value they continue to add, despite their tech pack process being partially automated.
Keeping momentum throughout the long-term implementation of DPC is a key role of leadership. “For a lot of businesses, they must upkeep the change management conversation. Leadership has invested in DPC applications and solutions, but now there’s a push to keep the momentum going. It takes true leadership alignment to make sure the progression and scalability keep moving forward,” Lara adds. Creating both capital and expense initiatives are needed to drive meaningful, long-term change.
Brands that have invested early and challenged themselves, by investing in innovative technologies, continue to thrive. Those that don’t, fall behind in both DPC and in physical product creation. Marczan points out that leading brands seem to be the leading DPC retailers as well. “If you take away the “digital” of DPC, it’s just product creation and you can’t continue to succeed without innovation. Innovation in your products, your customer experience, and your operations to get there,” he adds.
Digital production creation has been around for a long time, specifically 3D tools, so what is the next big shift and how do you prioritize? Brands are at the edge of the cliff, and they need to make the jump into the unknown. This includes daunting changes like investing in custom, sometimes complex, software integrations and the inclusion of software engineers in traditional business structures. Companies find themselves suddenly becoming a ‘tech company’. That can be scary and risky, but immensely rewarding.
“For retailers and suppliers with less experience incorporating computer programming methodologies across their functional landscape, there is an urge to go from zero automation to a fully automated workflow,” remarks Marczan, “and I would caution that it’s destructive. You’re setting yourself up for a huge investment and a big crash. What is more important is to have that full automation as a vision and then iterate towards it in a flexible and engaging way, pivoting as your needs and the tech landscape change”.
Companies find themselves suddenly becoming a ‘tech company’.
That can be scary and risky, but immensely rewarding.
In the coming few years, we’ll see more experimentation as new recruits come into the workforce with some basic python scripting knowledge and less anxiousness about creating a flexible, digital pipeline. If you want to be able to compete, you need to invest in the right product, ecosystem, and talent. As an organization moves through the digital thread, they need the correct IT team that will support the growth of their digital journey.
Kalypso’s most advanced DPC clients are taking the leap, are you ready?
In the last part of our series, we’ll dive deeper into the core foundational product technologies necessary to enable DPC and areas of growth we anticipate in the future
Sophia is a senior manager for Kalypso's Retail, Footwear & Apparel sector of the Consumer practice and specializes in Digital Product Creation. She's based outside of NYC and can usually be found tinkering on her computer with her mug full of black coffee by her side.
Brendon Marczan is a leader in Kalypso’s international Digital Product Creation (DPC) advisory team. Born and raised in Sydney, Australia, Brendon moved to London 8 years ago after being approached by cycling sportswear leader, Rapha Racing, to head up their Team Sky ‘Tour de France’ kit development. He went on to spend 18 months traveling with Bradley Wiggins and seeing Team Sky take the UK’s first Tour de France win.