AI Is rebuilding fast fashion from the ground up

Fast fashion retailers move faster than their traditional counterparts. They compress production cycles and turn out up-to-the-minute designs. And shoppers love a new look. With fast fashion, they get it quickly and cheaply. Consumers treat the lowest-price garments as nearly disposable, discarding them after only seven wears. For every five garments manufactured, three end up in a landfill or are incinerated each year. The environmental cost is significant. The total greenhouse gas emissions from the production of textiles is 1.2 billion tons a year—that’s more emissions than all international flights and maritime shipping combined.

Which brings us to the question: How can the fast fashion industry give itself a sustainable makeover? The answer lies in technology — tools that move the needle on lowering emissions. To adopt the right tools, it’s important to understand what specific problems fast fashion companies can solve for a sustainable future.

Over-production, heavy markdowns, rinse, repeat

In the 1960s, the fashion industry started speeding up production and cutting back costs to make clothing. It accelerated in the early 2000s, and today, fast fashion brands create clothing for 52 microseasons per year. They have a new collection every week because they are competing with the consumer demand for freshness, cost-effectiveness and endless options.

Stores are always highly stocked with clothing. Since the year 2000, clothing production doubled from 100 to 200 billion units per annum. Companies and consumers are wasting unprecedented amounts of clothing, placing a heavy tax on the environment. Fast fashion is not sustainable — for the fashion industry, for the consumer, and for the planet.

While the environmental impact is massive, the prevailing model isn’t sustainable in terms of profitability either. With new styles hitting the stores every week, fast fashion retailers are forced to markdown products to clear inventory, shrinking their margins dearly.

Fashion retailers aren’t powerless in this cycle of new styles, markdowns, rinse and repeat. Companies can effectively address the crisis by reducing waste, driving growth, and increasing profit margins with the right technologies.

Technology is the fabric for fast fashion’s makeover

The move to a sustainable future begins with simple but effective steps. A great place for fashion retailers to start is adopting AI-powered solutions that confront the industry’s issues head on. Tapping into real-time reporting for smarter business decisions is critical.

Retailers must leverage algorithms to pinpoint slow-moving fashion pieces in every store and send them to other stores where they are selling at a faster speed. They won’t have to markdown products to simply clear inventory or liquidate them altogether. By effectively managing inventory, fast fashion retailers can cut back on production costs, and minimise markdowns as AI helps them manage existing inventory more effectively.

Smart allocation helps these businesses make short-term predictions to determine what styles will become popular in the near future. Retailers can focus on producing those styles and delivering them to stores in time to optimize sales.

Inventory optimization software is another crucial piece of the puzzle. It is now a necessity to accurately monitor the actual demand of each SKU at each location where merchandise is placed, and then react in real time to guarantee the optimal inventory target at all times. It will pave the way to make necessary adjustments like production management, early liquidation, and lifecycle extension.

When paired with responsible business practices, transparent supply chains, and a commitment to reducing overall environmental impact, fashion retailers can minimize overproduction, overstocking and wastage. A smart inventory management system incorporates merchandise and supply chain constraints, while continuously learning demand patterns at the SKU level.

This changes the nature of how inventory is managed as AI allows companies to have a much greater impact on the flow of inventory throughout the product lifecycle – like optimizing size consolidations and liquidation.  

The benefit of using cutting-edge technology is clear: Fast fashion can do their part to curb waste, improve their bottom lines, and live up to their ESG goals. The solution is clear — technology is the harbinger of the much-needed change in the fashion industry. It is a much needed change for the industry’s profitability and our planet’s future.

By Eli Purian, VP of R&D, Onebeat