UNBOXING ON-DEMAND FASHION AND WHY DOES IT MAKE SENSE?
Updated: Jan 3
Bespoke, made-to-measure, made-to-order, or customization/personalization represent similar concepts. They could be grouped under ‘on-demand’ and are frequently used interchangeably with the major difference being the depth of customization.
Bespoke is a high-end service where clothes are handmade by skilled tailors from start to finish, as per the unique specifications of the customers, and in the highest quality of materials and craftsmanship.
Made-to-measure (MTM) is not entirely handmade but still manufactured specifically for the customers based on the measurements, just by a factory and not a tailor. As a result, it follows some standardization in the manufacturing process.
Made-to-order (MTO) with customization allows the customer to choose from several pre-set options, for example, collar shape and color.
Made-to-order/Pre-order implies that the model is fully developed and will be manufactured as-is post order placement, with no customization or personalization.
Since the dawn of fashion, these concepts have been around - the customer enters the atelier, orders a garment, selects the fabric, gets his/her measurements taken, and comes back when the garment is ready. In all the concepts mentioned above, demand comes first and determines the quantity of the final product. While representing a sustainable approach to clothing manufacturing, on-demand fashion was slowly overshadowed by ready-to-wear sometime before WWII and was later almost replaced by fast fashion, bringing along standard sizing, assembly lines, and automation of processes.
Fast forward to present times, Covid-19 challenged the way we manufacture and consume. “When things came to a complete stop amid the Covid-19 Pandemic, something snapped. The business model of producing vast amounts of clothes and selling them in the fastest amount of time began to fail. A pileup ensued.” These critical circumstances force companies to reach new levels of creativity. Here’s a breakdown of how brands have been coping with excess
Keeping basics in-house to resell later. This approach is not ideal. “This is not like a wine that gets better with age. Your inventory gets worse,” said Emanuel Chirico, chief executive of PVH Corp.
Passing the stock on to the retailers at a discount.
Reselling on the secondhand platforms.
Accelerating investments in digital, ranging from technologies that offer inventory visibility to state-of-the-art solutions that offer an immersive online experience.
The latter is indeed the most effective to date, and, according to McKinsey, those developing digital capabilities historically perform better than any other strategy.
But these measures have minimal effects that are not enough to truly weather the more massive underlying issue: “Covid-19 has exposed a fundamental weakness in the traditional fashion system: matching supply and demand.” More and more brands realize that a solution that could truly work has to foremost challenge these very fundamentals that brought us here as a society. Therefore, more brands look to eliminate the mismatch, reconsider manufacturing practices, and potentially introduce on-demand into their business model.
The full breadth of benefits for brands does not end on minimizing unsold stock. If done right, on-demand could be Aladdin’s magic carpet and open a whole new world of efficiency and savings for the environment and the fashion brands of tomorrow.
The benefits of manufacturing on-demand:
1. Cost and environmental savings:
By not having to estimate demand, brands do not have to stock up on fabrics and haberdashery: minimum work-in-progress inventory, and, as a result, minimum, if not negative, a working capital requirement because of the prepaid nature of orders. Let’s state the obvious: finished unsold inventory should ideally disappear altogether. “By making only what’s ordered by consumers themselves, [a New York-based fashion designer] Autumn Adeigbo is able to purchase her materials in limited quantities and maintain very little
2. Supply chain simplification:
This benefit is more conditional on the localization of the production. To be efficient and provide minimum lead times for on-demand fashion, the brands would have to work with local factories and suppliers. This may be easier said than done, but the ultimate cost of shipping, customs, and warehousing is comparable to locally manufactured goods. Here is an important case in point: “When you look solely at the manufacturing cost per unit, you are only getting part of the picture. You also have to consider other factors, like warehousing, shipping, and the risks associated with the value of time. When all of this is taken into account, I am not sure the cost of manufacturing in Asia is really lower. Covid-19 has brought this all into focus.”
So, where is the benefit? It is in bringing the customer local product, minimizing environmental cost, hyper agile supply chain or ‘demand-chain’, and reducing manufacturing cost.
3. Supplier and end consumer relations:
Being oceans away, the relationship between suppliers and manufacturers is often neglected in current manufacturing practices. This is a shame, as while ‘know your customer’ is an important aspect, ‘know your manufacturer or supplier’ is becoming increasingly imperative. Simplifying and localizing the manufacturer will help build the necessary trust and transparency. Manufacturers will become a value-addition and gain well-deserved recognition in contributing to the final product. Brands will be able to be fully transparent for the end consumer. Consumers, in turn, will understand where and how the garment is manufactured, gaining the desired level of comfort and trust with the brand.
4. Perseverance of the craftsmanship:
On-demand is an opportunity not only for ready-to-wear (RTW) brands. The right digital tools will also help empower smaller made-to-measure brands and factories that hold the knowledge of savoir-faire to keep up with the times of digital. It will help small traditional brands step into the future, preserve a heritage of craftsmanship, and continue sharing, if not shaping, tomorrow’s fashion.
5. New shopping experiences:
Producing on-demand implies the creation of 3D images of design collections, easily ‘manufacturable’ by the factories. It also means that once 3D is ready, there are virtually endless opportunities to create new exciting shopping experiences leveraging augmented reality (AR), virtual reality (VR), and other gaming technologies.
3D model of a women's blouse showcasing customisable design options
6. Reallocation of digital resources:
Digital efforts currently spent on demand prediction could be rerouted into AI-based prediction of trends. Further developing new designs in 3D, giving the consumer what they want even faster, without having to manufacture an entire collection first, or as The Fabricant and DressX proved, never at all.
7. Art and quality over speed:
Manufacturing on-demand, localizing suppliers, delivering perfectly fitting garments only makes sense for higher quality items, bypassing the fast fashion market. Such an approach will trigger brands to manufacture higher quality items that the clients would want to invest in, keep for longer, and resell in the secondhand market.
8. A whole new level of ‘know your customer’:
Having aggregated data on what customers want takes predicting trends, personal shopping, and convenience to a whole new level. Brands will know what is in your wardrobe, pre-configure new styles based on your taste and measurements, and deliver to the door.
So if it's so great, why haven’t we done it already?
For starters, developing and implementing such technology from scratch requires significant investment in developing technical capabilities, including upgrades, tech support, and maintenance. All these fall too far from the core of the business for most brands. Second, for years, the fashion industry was quite slow to change the supply chain, focusing instead on delivering convenience and lowering the cost for the final customer. This resulted in exploitation by bigger brands upstream and midstream of the value chain, while small traditional brands had to pass on the price to their final customer. Even though fashion is changing as we speak, “retail has experienced more change over the past 5 years than in the prior 50”, it is fair to say that the industry kept its guard and was overall insusceptible to large technological transformations in the supply chain. We just started seeing a willingness to invest and adopt such radical concepts as on-demand fashion.
Overall, industry reluctance to change, high price points for developing it in-house, and introducing non-core capabilities have kept the brands away from manufacturing and selling on-demand. The system simply seemed to be okay with functioning as-is.
Authors: Rahul Verma & Julia Chinakaeva