Three Ways AI is Set to Disrupt Fashion and Retail

By Aarthi Ramamurthy, CPO at CommerceHub

Artificial intelligence. The hot topic on everyone’s mind. With large language models like Chat GPT and Baird moving AI from science fiction to part of our everyday lives, the next question is how it will impact our places of work…

For the fashion sector, AI has the potential to be transformative. From trend prediction to product mapping and inventory management, AI can increase efficiency and reduce waste, having a direct impact on a brand or retailer’s profit margin.

Skinny jeans or flares? 

One of the key ways in which AI is set to transform fashion and retail is by acting as a merchandiser and analysing patterns and trends. Will skinny jeans come back into fashion? Or are flares here to stay? AI algorithms can review millions of purchases and predict future trends by analysing customer preferences, providing a whole new set of possibilities for product design that could reduce the risk of creating pieces which do not sell. 

This has great potential to reduce waste and unwanted stock, a major issue for the industry. Unsold stock is not just a problem for retailers in terms of profits, it is also a huge environmental issue. 

However, there are downsides. By following AI predicted trend patterns and only producing stock which they think will sell, retailers risk becoming indistinguishable from each other. Without creative freedom in design which differs between brands, there is a risk of fashion becoming homogenised. Ultimately, AI tools should be used to augment creativity, not replace it. 

Machine learning managing inventory

AI has the potential to transform inventory management. One great example is in the process of onboarding new suppliers. AI algorithms can be used to solve inconsistencies such as colour descriptions, for example a supplier may describe a t-shirt as red, whilst the retailer calls it coral. 

Updating product descriptions can end up being a long-winded manual job, however a simple AI algorithm can process this information for a number of products at speed, allowing retailers to onboard suppliers much faster and ultimately get the products to market earlier. On the other side of the coin, AI will also be able to help brands and suppliers connect with a greater number of retail channels and marketplaces with less friction.

Trend prediction can also come into play, by discovering which products will be popular in the coming season and predicting the level of stock needed. This saves retailers valuable time by taking care of the administrative tasks, and it’s great for consumers too, enabling them to receive notifications when a desired product is back in stock. 

AI enabled personalisation 

Another area where AI has had a significant impact is customer experience. Chatbots are being used by multiple online retailers to help solve customer queries quickly and efficiently, avoiding the dreaded telephone queues to talk to a customer service rep. This allows retailers to answer questions and issues quickly at the time of purchase – as opposed to during office hours, improving customer satisfaction. 

Additionally, through a combination of AI and content marketing, retailers are now able to provide hyper-personalisation for their customers, presenting them with content, products and services which match their precise preferences. Beyond just tailored adverts based on your search habits, adverts could also be based on influencers or celebrities that you frequently like the pictures of on social media. A form of this is already becoming possible, with the ability to use a picture of your favourite celebrity and then shop their look. This is the new era for fashion retailers, being able to provide the personal shopping experience through a screen.

There’s no doubt that AI is set to revolutionise fashion and retail, those who embrace and integrate these new advances will be the ones to stay ahead of the competition. AI has the potential to improve the industry, both for retailers and for consumers, with new levels of efficiency, trend prediction and personalisation. In a time when budgets are being squeezed, customer expectations are higher than ever and brands are being held more accountable for their waste, AI could really be the answer to the industry’s prayers.

Image by cottonbro studio via Pexels