How ”boring tech” will save fashion in 2024
Observations on the need for software in the textile ecosystem.
20 Dec 2023
Dr. Hanna Grabenhofer, Associate Partner, McKinsey & Co, at Fashion Talks in Antwerp.

How “boring tech” will save fashion in 2024

It’s easy to dangle with the visionary things. When big problems emerge – like the realization that the textile industry accounts for 8-10% of all global emissions – people naturally gravitate towards radical ideas. 

We need to change the way we produce! 

We need to change the way we consume! 

Every new solution becomes sexy, as we have witnessed in the last few years in the fashion industry. 

From material innovations like Spinnova and Infinited Fiber Company to new business models like renting, reselling, and upcycling to recycle innovations Renewcell, Rester, and OnceMore. 

Even seemingly outlandish ideas, like merging the fashion industry with gaming and other virtual worlds, get presented as viable ways forward by fashion councils and trade organisations. 

I know this because I’ve covered all of them in our newsfeeds and at our conferences. But I’m starting slowly to realise that real change will come from deep within the fashion system, it will happen incrementally, and it will be with the help of boring and unsexy technologies. 

Don’t get me wrong, we need visionary things. But assessing the latest sustainability trends, it’s obvious that none of them are going to create an impact at scale:

Gaming: I too see the potential of migrating some of our need for novelty and identity into gaming and “the metaverse”, but it probably won’t have any significant impact on the wider fashion industry for at least a decade, when Generation Alpha grows up to be consumers. 

Resell: Of course, we need to be more aware of how we consume. I applaud the younger generations that have a much higher tolerance, and even preference, for vintage than Gen X: ers and boomers. I am personally obsessed with vintage Levi’s and decades-old field jackets. But the rise of second hand seems to me to be an inevitable consequence of a market flooded with products. 

Rental: We may need rental services to be a part of the fashion ecosystem, but so far no one has cracked that code. Rent The Runway is constantly struggling with profitability and almost all of the fashion rental startups in Sweden have gone bankrupt. 

Materials: Innovations in fibre technologies and recycling practices are crucial for the potential of a circular fashion system, but many of the current players are now faced with the challenge of scaling their business models, and the struggle is real. 

We need something more immediate and concrete. 

Show any person working in tech how the current fashion system works and they will be appalled. Ask any person working with car manufacturing to compare the regulations on vehicles versus garments, and they’d be shocked. 

A staggeringly large part of the fashion system is still based on analogue decision-making, with a complete disregard for data on customer behaviour and product performance.

What we need is to tweak the current fashion system. We need to decrease gut-feeling decisions and increase accountability. We need to implement new kinds of software that will help us sharpen supply chains, streamline operations, increase sell-through, minimise overproduction, and reduce waste.

In our latest podcast, Dr. Hanna Grabenhofer, Associate Partner at McKinsey & Co, talks about how many fashion companies are struggling with excess stock. This is both a challenge and an opportunity. Repurposing products for future seasons could break fashion’s narrow-minded seasonal thinking. However, redistributing goods from one retailer to another is a laborious task without the right tools. 

Right now, in the next couple of years, especially ahead of the upcoming EU legislations that by all accounts are going to come into effect in 2026, it’s the SaaS companies that are looking like fashion’s saviours. 

There is an interesting rise of data-driven companies up to the task. Last week I wrote about Natasha Frank and her company EON. At Scandinavian MIND Agency, we are involved with two companies that will make a mark in 2024: the data operator IOXIO and the product tracking retail interface Impulso (which we hosted Retail Tech Talks with at CIFF in Copenhagen earlier this year). 

And more are coming. I constantly get pitched new variations of Digital Product Passport solutions, and attentive VCs are sensing opportunities in the wake of legislation. 

This is good. If we could cut fashion’s 30% over production to 15%, we have made a huge contribution to a more sustainable fashion system. And the upside for brands is that this means a more sustainable business on two fronts: you simultaneously get less waste and more profit. 

Now, that’s a pitch that will get the industry’s attention.