The Role of Brands in Digitalizing the Apparel Industry

Brands have a vital role to play in shifting the apparel industry’s focus to digital transformation.

May 2021 , by Alexandra Santiago

As the global apparel industry focuses on its digitalization—especially in the light of difficulties and the limitations arising because of the COVID-19 pandemic—apparel brands have a vital role to play in making sure this shift moves the industry forward. In fact brands, especially those with factories and suppliers based in China, are taking the lead in encouraging traditional-minded manufacturers to adopt digital practices to reduce costs and increase efficiency. 

The white paper Digital Transformation in the Apparel Industry: How to Improve Efficiency in Apparel Factory Supply Chain, co-authored by professionals from YCP Solidiance and Brother Machinery (Asia) Limited, explores the various ways apparel manufacturers and brands have embraced digital solutions like automated sewing machines and factory tracking systems. 

Different Levels of Digitalization 
When it comes to digitalization, apparel brands have very different needs—a fast fashion brand, for example, is considered a “low DX” supplier and would be focusing more on short-term partnerships that offer order-based digital solutions. A “mid-DX” brand would be a larger fast fashion company (e.g. H&M) that is more open to bigger and “riskier” digital solutions as long as costs are kept down and flexible options are introduced. 

On the other hand, bigger suppliers like the Shenzhou International Group, which manufactures some of the world’s most famous brands, are considered to have a “high DX” level since it can afford to source and apply large-scale digital solutions, like automated factory production processes, on its own. Larger brands and suppliers find this approach more cost-efficient in the long run. 

For example: Uniqlo, which is a Shenzhou brand, is renowned for its own Supply Chain Management software, G1 or Global One, which completely covers the supply chain process from raw materials to delivery and inventory. Uniqlo requires all its suppliers to adapt the G1 Model, which has encouraged more manufacturers to shift to digital applications and methods.  

Opportunities in the Apparel Industry’s Digitalization 
The different needs of brands present abundant opportunities for manufacturers and businesses to create solutions that will address the issues present in these four areas:  

The COVID-19 pandemic has reshaped how players in the apparel industry see their businesses, with brands taking the lead on pushing for digital acceleration. The different processes in the supply chain provide ample opportunity for those with hardware, software, and IoT services to partner with apparel brands and manufacturers for specialized solutions that promote efficiency and lower overall costs. 

To take an in-depth look at the different processes in the apparel supply chain, as well as the different needs of brands based on their current level of digitalization acceptance, read our full report here

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