McKinsey & Company, a management consulting firm, recently released the 64-page State of Fashion Technology Report 2022.
According to the report, in 2021, fashion companies invested 1.6 to 1.8 percent of their revenue in technology, which is expected to grow by 3.0 to 3.5 percent by 2030, to keep pace with digital natives and create a competitive edge.
McKinsey’s analysis shows that fashion companies have embedded AI in their business models, and could see a 118 percent increase in cash flow by 2030.
According to the report fashion’s five key technology themes like- metaverse reality check, hyper-personalization, connected stores, end-to-end upgrade, and traceability first.
Global spending on virtual goods reached more than $100 billion in 2021, more than doubling the total in 2015, with around 30 percent of revenues attributed to virtual fashion assets.
More than 60 percent of fashion executives believe creating integrated digital processes throughout their organizations will be their top five areas for digitization as they look to 2025.
Similarly, as per 50 percent of fashion decision-makers, traceability will be a top-five enabler of reducing emissions in their supply chains, though many brands currently have visibility over only direct supplier relationships.
Actually brands are increasing their focus on traceability through their supply chains, helping them address demands from regulators, investors, and customers for greater transparency.