Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design

Page created by Allan Lucas
 
CONTINUE READING
Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design
Deep Dive
                                                                                                               January 19, 2021

                                         Deep Dive
                                         Innovator Intelligence: Leveraging AI To Enhance
                                         Creativity, Sustainability and Efficiency in Modern
                                         Fashion Design
                                         In this report, we analyze the evolving fashion design industry and discuss opportunities for
                                         brands and retailers to improve the efficiency, inclusivity, creativity and sustainability of their
                                         design processes. We also explore the Savitude platform, an AI (artificial intelligence)-
                                         powered design technology for designers of all levels that can help brands better design for
                                         the modern consumer and positively impact their bottom line in the process.
                                         This report forms part of our Innovator Intelligence series, which focuses on emerging
                                         technologies that are disrupting traditional retail and fueling innovation across the retail
                                         value chain.

                                             • On-demand manufacturing and consumer-driven fashion cycles are forcing fashion
                                               brands and retailers to reduce lead times by nearshoring and using digital design
                                               technology.
                                             • The fashion industry is beginning to design more inclusively, both by expanding the
                                               plus-size market and designing for body shapes other than the hourglass shape.
                                             • Sustainability is likely to be a lasting trend in the fashion industry, as investors,
          Deborah Weinswig                     employees and consumers—particularly millennials and Gen Zers—demand a greater
                CEO and Founder                focus on environmental efforts.
              Coresight Research
                                             • Savitude’s AI-powered digital design platform enables brands, retailers and designers to
  deborahweinswig@coresight.com
                                               work creatively and efficiently, designing quickly for multiple body types and reducing
                                               waste.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                              1
Copyright © 2021 Coresight Research. All rights reserved.
Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design
Deep Dive
                                                                                                                                                                   January 19, 2021

CONTENTS
Introduction ........................................................................................................................................................... 3
The Shifting Design Landscape: Three Challenges ..................................................................................................... 3
    1. On-Demand Manufacturing and Consumer Driven Fashion Cycles Require Greater Design Speed and Flexibility . 3
    3. Sustainability is Emerging as a Key Value Proposition ....................................................................................... 8
        Consumers ....................................................................................................................................................................9
        Investors .................................................................................................................................................................... 10
        Employees.................................................................................................................................................................. 11
Savitude: Optimizing Design Efficiency and Creativity ............................................................................................. 12
Key Competitive Advantages ................................................................................................................................. 12
    1. Enabling Designers, Influencers, and Brands to Incorporate Trends, Inspirations and Brand DNA Seamlessly .... 12
    2. Promoting Designs Tailored to a Multitude of Body Shapes ............................................................................ 14
    3. Improving Design Efficiency and Reducing Waste ........................................................................................... 15
Upcoming Announcements ................................................................................................................................... 15
Coresight Research’s View ..................................................................................................................................... 16

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                                                                2
Copyright © 2021 Coresight Research. All rights reserved.
Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design
Deep Dive
                                                                                                                        January 19, 2021

                                                Introduction
                                                The world of fashion design has changed rapidly as brands and retailers have
                                                been forced to adapt to shifting consumer behavior and demand. Consumers are
                                                increasingly demanding a wider assortment of products to be delivered to them
                                                with higher frequency, leading to the rise of fast fashion and an ongoing struggle
                                                to reduce fashion lead times.
                                                At the same time, calls for sustainability and inclusivity in apparel have pushed
                                                back on the fast-fashion model, due to the associated waste and the one-size-fits-
                                                all mentality that fashion designers with extremely limited timeframes have come
                                                to adopt.
                                                As a result, fashion brands and retailers have begun to explore creative solutions
                                                to adhere to sustainable practices while also designing quickly for a multitude of
                                                body shapes and sizes. Advanced analytics and digital design and ideation
                                                technologies will likely become must-haves for retailers in the fashion industry
                                                moving forward.
                                                In this report, we examine the current pain points and areas of opportunity for
                                                fashion brands, retailers and designers to improve the efficiency and creativity
                                                with which they design. We profile Savitude, an AI-driven digital fashion design
                                                solutions provider that helps designers leverage their creativity to ideate and
                                                design quickly.
                                                This report is sponsored by Savitude.

                                                The Shifting Design Landscape: Three Challenges
                                                Almost every area of the fashion industry is undergoing rapid change, from
                                                production to distribution to marketing, but perhaps the most pivotal change in
                                                the fashion industry is occurring at the very first step in the fashion cycle: design.
                                                We explore three key trends that are shaping the ways in which fashion brands
                                                are designing their products and are consequently affecting the industry as a
                                                whole.
                                                    1. Consumer-driven fashion cycles require greater design speed and flexibility,
                                                       along with data driven insights

  With the help of analytics, the                   2. Consumers and designers are reducing their focus on the hourglass shape
  most pivotal change in the                           and are increasingly emphasizing designs for multiple body types, aided by
  fashion industry is occurring at                     advances in design technology and analytics.
  the very first step in the fashion
  cycle: design.                                    3. Sustainability is emerging as a key value proposition, propelled by advances
                                                       in analytics and stakeholder demands.

                                                1. Consumer-Driven Fashion Cycles Require Greater Design Speed and
                                                Flexibility
                                                Advances in consumer data analytics have made it possible for retailers of all
                                                kinds to more accurately predict what consumers prefer to buy in the near future
                                                and make changes to their inventory, pricing and supply chain accordingly.
                                                Project Verte, which we profiled in our Unified Commerce for the Channel-
                                                Agnostic Consumer deep dive, enables brands and retailers to access real-time
                                                inventory and sales data, and adjust their supply chain and fulfillment networks
                                                almost instantaneously. Centricity, whose business we outlined in our Decoding
                                                Customer Data report, uses big data and AI to help retailers and manufacturers

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                3
Copyright © 2021 Coresight Research. All rights reserved.
Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design
Deep Dive
                                                                                                                        January 19, 2021

                                                understand shopper demand in real time and make proactive SKU (stock-keeping
                                                unit)-level assortment decisions.
                                                However, long design, production and shipment lead times can make it difficult
                                                for many fashion brands to take advantage of the increasingly accurate,
                                                predictive consumer behavior data that they have access to.

A 2018 McKinsey survey indicated                Some apparel companies are responding to this challenge by changing the
that 60% of apparel procurement                 physical location of production—and therefore aiming to reduce shipment times.
executives expect to nearshore at               A 2018 McKinsey survey indicated that 33% of apparel procurement executives
least 20% of their total sourcing               were already nearshoring at least 20% of their total sourcing, and 60% in total
by 2025.                                        expected to be nearshoring this proportion in 2025. While nearshoring can
                                                reduce transportation times, it does not reduce design times, which for many
                                                fashion brands can make up a significant proportion of total lead time.
                                                As consumers continue to expect new designs and products with increasing
                                                frequency, many designers have struggled to keep up. The fashion design
                                                industry shrank at an average annual rate of 3.0% in the five-year period leading
                                                up to 2020, according to market research firm IBISWorld (it is worth noting that a
                                                significant portion of fashion design is done in-house and is not included in this
                                                estimate). However, many manufacturers are increasingly hiring outside fashion
                                                designers to help keep up with rapid fashion cycles and changes in consumer
                                                demand.
                                                At the same time, apparel markets worldwide have seen small, but existent,
                                                growth: The global apparel market saw sales grow from $1.38 trillion in 2014 to
                                                $1.41 trillion in 2019, prior to shrinking in 2020 as a result of the pandemic. This
                                                growth may not be spectacular, but it indicates that the fashion design industry
                                                need not be shrinking at the pace it has been. Figure 1 illustrates the dichotomy
                                                between the growth in the apparel market overall and the shrinkage of the
                                                design industry.

Figure 1. Global Apparel and Design Market: YoY % Change

    5%                                  4.3%                     4.3%
    4%

    3%

    2%

    1%                                                                                                   The fashion design industry
                                                                                        0.0%
                                                                                                           has shrunk even as the
    0%
                                                                                                          apparel market has seen
  (1)%                                                                                                         modest growth
              (0.6)%
  (2)%

  (3)%
                       (3.0)%                   (3.0)%                   (3.0)%                (3.0)%
  (4)%
                    2016                     2017                     2018                 2019

                Global apparel sales growth              Global fashion design industry growth

Source: IBISWorld/Statista

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                  4
Copyright © 2021 Coresight Research. All rights reserved.
Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design
Deep Dive
                                                                                                                    January 19, 2021

                                                While fast-fashion brands that focus more on speed than complex, novel designs
                                                have been able to leverage real-time consumer data effectively, many higher-
                                                end, design-focused brands have found it more challenging to effectively leverage
                                                real-time insights, hampered by long lead times and intensive physical, non-
                                                digital design processes. The delays caused by long design processes matter: A
                                                2019 survey by Salesforce revealed that 40% of global consumers are willing to
                                                pay more for a product or service that is first to the market.
                                                Along with nearshoring production, digital design and ideation in the fashion
                                                industry will likely be necessary for these brands to make the most of the growing
                                                library of consumer analytics that can inform inventory and design decisions.
                                                These analytics can be paired with new product creation technologies throughout
                                                the entire design process to optimize the modern design journey, illustrated in
                                                Figure 2.

Figure 2. Components of the Modern Design Process

Source: Savitude/Coresight Research

                                                3D design and other digital design and ideation technology can help brands get
                                                their products to market significantly faster, enabling them to cater to
                                                increasingly demanding consumers and leverage inventory, sales and consumer
                                                behavior insights. Despite the advantages, many fashion retailers have yet to
                                                embrace these technologies- potentially to their detriment. 3D design remains
                                                something of an outlier in the fashion world: Only 2% of retailers worldwide are
                                                currently using 3D design, according to Sean Coxall, President of Supply Chain
                                                Solutions at Li & Fung, one of the world’s largest supply chain management
                                                companies. However, Coxall expects this proportion to grow rapidly in the near
                                                future, with 25% of retailers using 3D design by 2023, as depicted in Figure 3.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                            5
Copyright © 2021 Coresight Research. All rights reserved.
Innovator Intelligence: Leveraging AI To Enhance Creativity, Sustainability and Efficiency in Modern Fashion Design
Deep Dive
                                                                                                                         January 19, 2021

Figure 3. Estimated Proportions of Retailers Worldwide Using 3D Design

                    2020                                             2023E

                        2%
                                                                                        25%

                                                                                                                By 2023, 25%
                                                                                                                  of apparel
                                                                                                               retailers could
                                                                                                                 be using 3D
                                                                                                                    design

                                                     75%

                    98%
                                                      Using 3D design       Not using 3D design

Source: Li & Fung

                                                Li & Fung estimated in 2020 that 3D design tools can reduce design labor costs by
                                                68% and reduce waste by 55%, but 3D design tools can only be fully effective
                                                when combined with ideation technologies that enable designers to ensure
                                                product details and fit throughout the creation process Combined with AI-driven
                                                product-ideation software—which can use consumer data to help suggest
                                                potential new designs to designers—we anticipate that digital and automated
Li & Fung estimates that 3D                     design and ideation technology will continue to become more prevalent in the
design tools can reduce design                  fashion industry. It will likely be imperative for brands and retailers to use
labor costs by 68% and reduce
                                                ideation and 3D technology in tandem with advanced analytics that can help
waste by 55%.
                                                them analyze designs not just for fit, but also for suitability in different regions of
                                                the world and in the context of different trends.

                                                2. Consumers and Designers Are Reducing Their Focus on the Hourglass Shape
                                                and Are Increasingly Emphasizing Designs for Multiple Body Types
                                                In recent years, inclusive fashion has become more mainstream, with brands and
                                                retailers targeting and focusing on numerous specific body types, such as plus-
                                                size, petite and tall, not just those who fit the traditional hourglass shape. The
                                                plus-size market in the US had seen solid growth in recent years, before declining
                                                along with the rest of the US apparel market in 2020. However, the plus-size
                                                apparel market has weathered the pandemic slightly better than the market as a
                                                whole: We project the plus-size market to have declined by 11% in 2020 from
                                                2019, a slightly smaller decline than our projected 12% decline in the total US
                                                apparel market.
                                                There remains further opportunity in the US plus-size market. The rate of obesity
                                                among adult women (aged 20 and above) in the US is around 41.9%—
                                                approximately 52 million women—according to the Behavioral Risk Factor
                                                Surveillance System at the Centers for Disease Control and Prevention (CDC). That
                                                number has grown substantially over the last several decades, and it is likely that
                                                the pandemic will lead to a continued rise in obesity rates, as consumers have
                                                been confined to their houses and rates of alcohol consumption have climbed.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                 6
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                     January 19, 2021

                                                In the US, the plus-size market is well developed. Elsewhere around the world,
                                                there remains greater space for expansion in women’s plus-size apparel. Figure 4
                                                illustrates the projected growth of the global women’s plus-size apparel market
                                                from 2019 to 2025.

Figure 4. Global Women’s Plus-Size Apparel Market (USD Bil.)

  $250                                                                                     $229.9
                                                                                  $220.4
                                                                 $211.3
                                                $202.6
                               $194.3
  $200        $186.2

  $150                                                                                                  The global plus-size
                                                                                                     women’s apparel market is
                                                                                                      expected to reach nearly
  $100                                                                                                  $230 billion in 2025

   $50

     $0
               2020E            2021E            2022E           2023E            2024E    2025E

Source: Acute Market Reports

                                                Across the world, more than 1.9 billion adults were overweight in 2016—more
  In the US, we estimate that the               than 25% of the global population—and worldwide obesity has almost tripled
  plus-size clothing market
                                                since 1975. The market for plus-size apparel remains underserved. In the US, we
  comprises 20.7% of the total
  women’s clothing market, in a                 estimate that the plus-size clothing market comprises 20.7% of the total women’s
  country where 41.9% of                        clothing market, in a country where 41.9% are obese. There is room for
  consumers are obese.                          expansion, as indicated by the nearly 20 percentage point gap between the
                                                obesity rate and plus-size market penetration in the US.
                                                Designing inclusively is not just about size inclusivity– it is also about designing
                                                with different body shapes and fit preferences in mind. In Coresight Research’s
                                                November 2020 survey of US consumers, we found that four in 10 consumers had
                                                returned an unwanted purchase in the past 12 months. Of those consumers,
                                                51.5% indicated that they had returned a clothing purchase in the past 12
                                                months—more than twice the returns rate of any other product, as shown in
                                                Figure 5.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                             7
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                               January 19, 2021

Figure 5. US Consumers That Had Returned Any Unwanted Purchases in the Past 12 Months: Product Categories They Had
Returned (% of Respondents)

                            Clothing                                                             52%

                         Electronics                                22%
                                                                                                                 More than twice as many
                                                                                                                   consumers reported
                                                                                                                 returning clothing in the
                          Footwear                          15%                                                  last 12 months than the
                                                                                                                   next highest category

 Home-improvement/DIY products                            14%

Base: 169 US respondents aged 18+ that had returned a product in the past 12 months, surveyed in November 2020
Source: Coresight Research

                                                Poor fit is one of the leading reasons for apparel returns—the wrong size as well
                                                as the fit of a product not suiting a consumer’s body shape. Returns sparked by fit
                                                issues come at vast expense to retailers: According to estimates from IHL group,
                                                retailers lose more than $600 billion worldwide each year to returns. Consumers
                                                with less traditional body shapes likely return products more often, as it has
                                                traditionally been difficult for designers to create clothes that fit well on certain
                                                body shapes. The lack of analytics available to help designers ensure they can
                                                design for multiple body types makes it difficult for brands and retailers to
                                                produce clothes that fit well across consumers of different shapes and sizes. As a
                                                result, these consumers can be the toughest for fashion retailers to convert.

  Retailers lose more than $600                 Furthermore, during the pandemic, many consumers have preferred to return
  billion worldwide each year to                items through the mail. Some 42.6% of US consumers reported preferring to
  returns.                                      return online orders by mail, versus just 25.4% who prefer to return them in
                                                store, according to our November 2020 consumer survey. Combined with the
                                                increased penetration of online shopping, this preference puts further strain on
                                                already taxed retail logistics networks. ShipMatrix Inc. estimates that the total
                                                holiday shipping capacity of US logistics providers in 2020 between Thanksgiving
                                                and Christmas was 79.1 million parcels per day. That is a 21% increase over
                                                2019’s 65.3 million parcel capacity, but still not enough to handle all of the 86.3
                                                million parcels looking for space daily—a 27% increase over the number of
                                                packages looking for space in the 2019 holiday season.
                                                All retailers are increasingly understanding the importance of reducing returns. In
                                                fashion, they can do so in large part by leveraging technology to design for a
                                                more diverse array of body shapes and sizes.

                                                3. Sustainability Is Emerging as a Key Value Proposition, Propelled by Advances
                                                in Analytics and Stakeholder Demands

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                        8
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                      January 19, 2021

                                                Fashion accounts for 10% of the world’s emissions, according to data from the
                                                Intergovernmental Panel on Climate Change. For long periods of time,
                                                consumers, investors and employees have been willing to shrug off the harmful
                                                effects fashion design, manufacturing and consumption have on the planet, but
                                                the increasing evidence of fashion’s impact on the natural world has led all
                                                stakeholders to pay more attention to sustainability. Although fast fashion
                                                remains a large subset of the market, more brands are becoming aware of how
                                                their decisions and actions impact the world around them. Advances in analytics
                                                that help fashion retailers optimize the sustainability of their design process and
                                                operations have opened up a new frontier of possibilities for companies to make
                                                more of an impact with sustainability initiatives.
                                                As part of efforts to promote sustainability, Coresight Research has introduced
                                                the EnCORE framework, a methodology to help retailers and brands frame their
                                                sustainability efforts. The EnCORE framework is made up of five key components:
                                                    • Being environmentally engaged: Retailers should start with understanding
                                                      how their own operations and supply chain impact the environment along
                                                      with peer standards and industry shifts.
                                                    • Adopting circular models that minimize the environmental impact of
                                                      products and maximize the circulation of materials back into use.
                                                    • Optimizing operations through resource-efficient infrastructure and
                                                      decarbonization technologies.
                                                    • Creating and maintaining a responsible supply chain that includes processes
                                                      that are less resource-intensive and provide transparency to the customer.
                                                    • Committing to excellence in reporting and communicating about
                                                      sustainability, including stakeholder engagement and being a role model
                                                      within the industry.

  56% of global consumers report                In fashion, searches for trends, inspiration and designs can often come at the cost
  being willing to pay, on average, a           of emissions produced by travel and waste generated by physical design
  35% premium for sustainably                   processes powered by trial and error. Below, we outline how consumers,
  made products.                                investors and employees appear more focused on sustainability and likely in favor
                                                of reducing unnecessary waste in the design process.
                                                Consumers
                                                Consumers are often critiqued for their willingness to buy and quickly discard
                                                cheap, unsustainably made products without regard to their environmental
                                                impact. That portrait of the consumer, however, seems to be out of date: 56% of
                                                global consumers report being willing to pay, on average, a 35% premium for
                                                sustainably made products, according to a 2020 survey by the NRF.
                                                Furthermore, while some may have expected the pandemic to cause consumers
                                                to deprioritize all but their most immediate needs, our research suggests that the
                                                current crisis has actually made many people more conscious of how their
                                                decisions impact the environment. A Coresight Research survey conducted in
                                                August 2020 found that 29.0% of US consumers felt that sustainability has
                                                become more of a factor for them when shopping since the start of the
                                                pandemic, compared to just 15.7% who say the pandemic has made them
                                                consider sustainability less when shopping, as shown in Figure 6.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                              9
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                     January 19, 2021

Figure 6. Whether the Pandemic Has Made Sustainability More or Less of a Factor for US Consumers When Shopping (% of
Respondents)

                                                            Don't Know, 8%
                              Less, 16%

                                                                                                      Nearly twice as many
                                                                                                    consumers reported that
                                                                                   More, 29%         the pandemic has made
                                                                                                     them more conscious of
                                                                                                    sustainability than those
                                                                                                    who reported it has made
                                                                                                       them less conscious

                   No Change, 47%

Base: US Internet users aged 18+
Source: Coresight Research

  In our August survey, of the US               Increased consumer consideration of sustainability has been driven by the
  consumers who said the crisis has             growing understanding of how behaviors affect the world. Of those in our survey
  made sustainability more of a                 who said the crisis has made sustainability more of a factor, 45% told us that it
  factor, 45% reported that it was              was because the lockdowns had showed them the immediate impact that
  because the lockdowns had                     changed behaviors can have on the planet, citing how fewer cars on the road,
  showed them the immediate                     grounded flights and closed factories had immediate positive impacts on
  impact that changed behaviors                 environmental factors such as air quality. Furthermore, over 42% said they were
  can have on the planet.
                                                more concerned about sustainability because they now had a greater awareness
                                                of global risks and threats.
                                                Fashion retailers are already beginning to capitalize on consumers’ preference for
                                                sustainability. The North Face has seen success with its “Renewed” program,
                                                where the retailer takes a damaged or returned product, cleans it, fixes it and
                                                then sells it. In a recent webinar with Coresight Research, Dan Goldman, then
                                                Head of Strategy at The North Face, indicated that the company believes
                                                sustainability will be the next great feature of apparel that consumers will want
                                                to show off, rather than flashy logos or name brands.
                                                Sales numbers support Goldman’s assertion: ThredUP, an online secondhand
                                                apparel retailer, maintained 20% year-over-year growth rate through the height
                                                of the pandemic (mid-March to May 31), indicating that sustainably focused
                                                fashion retailers can thrive even in crisis. Moving forward, we anticipate that
                                                consumers will continue to look to buy from brands that represent their values
                                                and have a positive impact on the planet.
                                                Investors
                                                Investors have also become increasingly conscious of the power they have to
                                                influence the fate of the planet. As of 2018, more than 25% of money under
                                                professional management was invested in sustainable assets, according to US SIF:
                                                The Forum for Sustainable and Responsible Investment, roughly triple the

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                            10
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                      January 19, 2021

                                                proportion in 2013. Furthermore, the coronavirus pandemic has illustrated how
    As of 2018, more than 25% of                important it is to have a resilient supply chain capable of withstanding major
    money under professional
                                                global shocks, be they health related, political or environmental. Just as
    management was invested in
                                                consumers are now increasingly aware of global threats, investors have a
    sustainable assets, according to
    US SIF, roughly triple the                  heightened awareness of the volatility of assets without a sustainable model.
    proportion in 2013.                         Over the course of the current crisis, investors’ preference for sustainable
                                                companies has become more apparent than ever. Through 2020, the ESG S&P
                                                500 index (a sub-index of the S&P 500 cataloguing the performance of companies
                                                that are committed to environmental, social justice and governance values)
                                                consistently outperformed the overall S&P 500 index, as shown in Figure 7.

Figure 7. ESG S&P 500 and S&P 500 2020 Performance, Indexed to January 2, 2020 = 100

  115

  110

  105

  100

   95

   90
                                                                                                            The ESG S&P 500
   85                                                                                                       outperformed the
                                                                                                          overall index by nearly
   80
                                                                                                               2% in 2020
   75

   70

   65

                                                     S&P 500 ESG Index             S&P 500

Source: S&P Global

                                                Indexed to 100 at the start of 2020, the ESG S&P 500 grew to 114.43 as of
                                                December 2, while the overall S&P 500 index grew to 112.62—a difference of
                                                almost 2%. Investors are putting their money where their mouths are and
                                                investing increasingly in sustainable assets, making it more vital than ever for
                                                fashion retailers—long considered among the least sustainable retailers—to
                                                appeal to the environmentally conscious.
                                                Employees
                                                As the workforce continues to become dominated by millennials and Gen Zers,
                                                sustainability is becoming an increasingly important factor that employees
                                                consider when choosing their career/employer. A Fast Company survey of 1,000
                                                employees at large US companies in 2019 found that 40% of millennial
                                                respondents indicated that they had chosen a job in the past because a company
                                                performed better on sustainability than the alternative. More than 10% of all
                                                employees in the survey also indicated they would be willing to take a $5,000–
                                                $10,000 pay cut to work at a company more focused on sustainability.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                               11
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                     January 19, 2021

                                                In fashion, we expect companies that embrace design, manufacturing and
                                                distribution models that focus on sustainability—by relying on digital design
                                                technology and circular models—will have a distinct advantage in attracting
                                                millennial and Gen Z employees.

                                                Savitude: Optimizing Design Efficiency and Creativity
  Savitude is a digital design                  Savitude is a digital design solutions provider that pairs analytics and efficiency
  solutions provider that pairs                 with creativity to enable designers and brands to streamline the design process
  analytics and efficiency with                 while maintaining strong aesthetics and creativity. The company’s software offers
  creativity to enable designers and            designers the ability to create personalized designs based on more than 700
  brands to streamline the design               body-type templates. Savitude’s solutions enable designers to incorporate
  process while maintaining strong              different trends, inspirations and body types simultaneously while designing,
  aesthetics and creativity.                    speeding up the design process while still letting designers do what they do best.
                                                The image below outlines Savitude’s solution.

                                                Source: Savitude

                                                Key Competitive Advantages
                                                Below, we highlight three of Savitude’s key competitive advantages, focusing on
                                                how the company optimizes the design process and helps address numerous pain
                                                points along the fashion supply chain.
                                                Enabling Designers, Influencers and Brands To Incorporate Trends, Inspiration
                                                and “Brand DNA” Seamlessly
                                                Savitude uses AI to help designers ideate even more creatively and efficiently by
                                                enabling them to simultaneously incorporate the latest trends, their own
                                                inspiration and what Savitude calls “brand DNA” (the unique look and feel that
                                                runs through all of a brand’s products) into hundreds of instantaneously
                                                generated designs. The Savitude online portal provides end-to-end solutions for
                                                designers to go directly from inputs (inspiration, trends, brand DNA) to first
                                                patterns. For their inspiration and trend images, designers can simply upload
                                                sketches or photos to the portal, as shown in the image below.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                            12
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                      January 19, 2021

                                                Adding inspiration images to the Savitude platform
                                                Source: Savitude

  Savitude enables sketches,                    As indicated by the image above, designers have ample latitude to input
  pictures from nature and other                inspiration of all kinds. Patterns, pictures from nature and other images can all be
  images to be uploaded and                     uploaded and integrated seamlessly into the ideation process. When designing a
  integrated seamlessly into the                particular garment, users select which they would like the AI design feature to
  ideation process.                             take into account when generating customized designs. The effect each of the
                                                three inputs—inspiration, trends and brand DNA—has on the output designs can
                                                be adjusted using a slider ranging from 0 to 100. Designers can then also
                                                integrate brand identity into the automatically generated designs by uploading
                                                similar sketches or images of the brand’s previous designs or archive. The
                                                designer can also select what percentage of the collection they wish to be printed
                                                vs solid. The printed portion will be inspired by the actual inspiration images.
                                                Finally, the designer can choose a primary and secondary color that they wish to
                                                be featured in the AI-generated designs.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                             13
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                                 January 19, 2021
                                           Adjusting sliders for inspiration, trends and “brand DNA” prior to generating AI-created designs on the
                                           Savitude platform
                                           Source: Savitude

  With Savitude, brands working            The Savitude platform’s ease of use and seamless installation at the corporate
  with influencers or celebrities can      level makes it possible for non-designers to also create unique, inspired designs.
  allow them to design products            Savitude democratizes the fashion design process, making it easy for people who
  entirely on their own, reducing          may not be design experts to create their own professional-quality designs. Ease
  costs for the brand and enhancing        of design is an especially valuable feature of Savitude’s platform today, when
  the creative abilities of the            non-fashion brands are increasingly branching out into their own lines of apparel,
  celebrities that are the face of the     and celebrity mashups are more prevalent than ever. With Savitude, brands
  products.
                                           working with influencers or celebrities can allow them to design products entirely
                                           on their own, reducing costs for the brand and enhancing the creative abilities of
                                           the celebrities that are the face of the products.
                                           Promoting Designs Tailored to a Multitude of Body Shapes
                                           Savitude enables designers to easily create products that will fit all body types,
                                           not just the traditional hourglass shape that fashion has long, almost exclusively,
                                           focused on. After creating designs based on inspiration, trends and brand DNA
                                           input, Savitude shows users hundreds of AI-generated designs to select from. The
                                           user can then choose on which of the nine body types they wish to understand
                                           the fit of their design. Once a body type is selected, the Savitude software
                                           enables the user to view how well each generated design fits on the selected
                                           body type, as a percentage (with 100 being a perfect fit), as shown in the image
                                           below.

                                           Viewing fit analytics on AI generated designs on the Savitude platform
                                           Source: Savitude

  While existing design ideation                    This enables designers who use Savitude to focus on a variety of different body
  alone usually takes between two                   types and ensure that their designs fit well on all potential customers, not just
  and 12 weeks, Savitude estimates                  those with the traditional hourglass shape. Savitude estimates that only 20% of
  that its ideation process takes
  designers as little as five minutes
Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                 14
  and a©maximum
Copyright             of five
           2021 Coresight     days.All rights reserved.
                          Research.
Deep Dive
                                                                                                                         January 19, 2021

                                                women have the stereotypical hourglass shape, leading many consumers to be
                                                unsatisfied with the fit of products that are designed for this shape. This can lead
                                                to high rates of returns, which, as we discussed earlier in this report, can come at
                                                great expense to brands and retailers, along with large quantities of unusable
                                                excess inventory when products are designed only to fit a small segment of the
                                                population.
                                                Improving Design Efficiency and Reducing Waste
                                                By giving designers access to a powerful AI platform in their ideation process,
                                                Savitude can not only help them design better, but enable them to work faster
                                                and less wastefully. Savitude reports that its software generally saves designers at
                                                least four weeks, a crucial amount of time in a fashion world that is increasingly
                                                defined by on-demand fashion and short lead times. While existing design
                                                ideation alone usually takes between two and 12 weeks, Savitude estimates that
                                                its ideation process takes designers as little as five minutes and a maximum of
                                                five days.
                                                The Savitude platform can generate hundreds of designs in a matter of seconds,
                                                all based on customized parameters for inspiration, trends and brand DNA input
                                                by the designer. This not only reduces the time associated with the usual design
                                                trial and error process, but also the waste. By designing fully digitally, designers
                                                who use Savitude can visualize huge quantities of designs without ever leaving
                                                anything on the cutting-room floor.
                                                Upcoming Announcements
                                                Savitude will be adding the following features in the first quarter of 2021:
                                                      •     Custom asset libraries—When a new brand adopts the Savitude Design
                                                            Studio, the first action will be to upload the brand’s archive. The Design
                                                            Studio will automatically “disassemble” the design details in the earlier
                                                            designs and form a unique library for this brand only. From that point,
                                                            the brand will be working with familiar design details, in the hands of its
                                                            own design team. This will greatly expand the details available and add
                                                            familiarity for users.
                                                      •     Unique design details—A new capability will look at inspiration images,
                                                            extract patterns that will look like design details and reinterpret the
                                                            pattern into cloth as an original design.
                                                Savitude is also collaborating with Gerber Technology's New York City Innovation
                                                Center on a data workflow from seamless design to production. Besides
                                                sustainable design and accelerating the design process, it is increasingly
                                                important to create personalized garments that fit. Savitude's front-end design
                                                plugging into Gerber Technology's on-demand product development and
                                                production ensures that personalization and fit in design carry all the way
                                                through to the finished garment.

                                                In November 2020, Savitude was selected for the five-month Startupbootcamp
                                                STAR virtual program in Milan, Italy with Prada, Valentino and Accenture as
                                                partners.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                                15
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                                       January 19, 2021

                                                Coresight Research’s View
                                                Digital design is likely to continue to grow rapidly as designers strive to find the
                                                perfect balance of efficiency and creativity, all while aiming to design for multiple
                                                body types and remain sustainable. We identify three areas of opportunity for
                                                brands and retailers to improve their design process:
                                                    • As fashion design moves toward automation, it will be imperative for
                                                      designers to balance the efficiency offered by design automation systems
                                                      with the personal touch of designers. Savitude can offer brands a
                                                      streamlined digital solution that maintains an emphasis on designers’
                                                      creativity.
                                                    • Inclusivity will continue to become mainstream in the fashion world, making
                                                      the ability to design for a wide range of body types more important than
                                                      ever.
                                                    • We expect fashion brands to continue to focus more on sustainability for
                                                      the foreseeable future. Savitude’s digital design suite is one solution
                                                      designers can use to promote sustainable practices without sacrificing other
                                                      elements of the business.

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                                              16
Copyright © 2021 Coresight Research. All rights reserved.
Deep Dive
                                                                                                    January 19, 2021

      Deborah Weinswig, CPA                                    Owen Riley
      CEO and Founder                                          Research Analyst
      Coresight Research
      deborahweinswig@coresight.com                            Steven Winnick
                                                               Senior Analyst

                                     New York • Hong Kong • London • Mangaluru (India) • Shanghai
                                                            Coresight.com

Deborah Weinswig, CEO and Founder, Coresight Research | deborahweinswig@coresight.com                           17
Copyright © 2021 Coresight Research. All rights reserved.
You can also read