Where is fashion and what is really relevant in 2025?

Artificial intelligence (AI) is dominating conversations – including in retail, but where are the actual areas of application in fashion retail apart from the big visions and promises? In an interview, Ulrich Spaan, technology expert at the Cologne EHI Retail Institute, talks about the status of AI in fashion retail, homework in omnichannel and which investments are important even with a limited budget.

AI

Artificial intelligence has been on the agenda for several years, but it now dominates retail like no other topic before. In conversations with retail decision-makers, 95 percent say that artificial intelligence will transform the industry in the coming years, said Spaan during a presentation in Rotterdam ahead of the Eurocis retail technology trade fair. “It’s not surprising, but it is true.”

Generative AI is the really new development that has gained momentum in the past two years with the “birth of Chat GPT”. A distinction should be made from the “more classic” artificial intelligence, which has been used in the area of ​​data analysis and sales forecasts in the fashion industry for several years.

“This is already mature in many organizations,” says Spaan. Many companies, including in the fashion industry, are “pretty good” at analyzing data and seeing how it affects sales and revenue. These analyzes are also used to design ranges and collections.

Own AI solutions

Generative AI is helping retailers immensely to optimize and simplify processes that previously took a lot of time, said Spaan. This allows employees to concentrate on the important tasks. “This is something that is still in its early stages, but where everyone has already started,” says Spaan.

Retailers are already developing their own solutions and not just using Chat-GPT. For these own applications, however, data must first be organized internally, which is then brought to the users in a “compressed and coherent manner” by the AI, explains Spaan. A currently very specific area of ​​application is the summary of information such as manuals and documents for store employees in an accessible form.

According to Spaan, there is an incredible amount of information in a company that employees can access more efficiently with the help of AI – they can read it faster and also get more information. Examples range from operating the cash register system to replenishing inventory. For example, instead of calling colleagues, you can question internal chatbots that have been fed the relevant documents. In combination with chatbots, Spaan sees “high potential” for this area of ​​application, and many companies are already working on it.

“Some are still at the beginning and haven’t organized it that way yet and only use Chat-GPT, which they have just integrated,” says Spaan. “Others have already developed things for themselves. We’re seeing a lot of movement in the market.”

“So far we are talking about internal processes, the next question is how this can be used towards end customers,” says Spaan. The AI ​​can use chatbots to help customers with questions and also to personalize offers. The topic of image generation is not yet very advanced in practical implementation, but it is one of the most important future fields in marketing – for example in the creation of images for the online shop, for advertising and for the point of sale (POS). “It’s still early days, but it can happen quite quickly,” expects Spaan.

Point of Sale

In the next ten years, the proportion of printed receipts will decrease “significantly,” predicts Spaan. Payments with cash will continue to decline in the future, even in Germany.

During the payment process, there continues to be a shift from store employees to customers. Technologies such as self-service checkouts and self-scanning have been on the market for years. In the last three to four years, autonomous stores without employees have also become more popular in retail. There are two reasons for this development, says Spaan. On the one hand, this makes the payment process more efficient and convenient, and on the other hand, the technology also helps in view of the shortage of skilled workers, which will only increase in the future. This is also the reason why retailers are already testing a lot today.

However, these cashier-free to-go stores are less interesting for the fashion retail sector because the convenience aspect does not play such a big role, says Spaan.

RFID

However, the aspect of efficiency plays an important role. The so-called RFID (Radio Frequency Identification) technology can help here. It helps ensure that items no longer have to be scanned individually and manually. Items tagged with RFID tags can be scanned much more quickly at self-service checkouts.

In the sports sector, for example, according to Spaan, the retailer Decathlon has long since provided all items with an RFID tag. Customers only have to place their purchase in a box; it is recorded immediately, making the check-out process “extremely simple,” says Spaan. “This will become established in many places in the fashion trade. This is not yet well implemented everywhere.” It works best if it runs via RFID and article surveillance is also part of it. As soon as customers have to remove the item security themselves, it becomes cumbersome.

RFID tags can increase efficiency and reduce the need for staff, which is becoming scarce. But their disadvantage is that they are mostly used by vertical fashion companies that control their entire value chain. The use of RFID is much more complicated for multi-brand stores because they have many suppliers.

Omnichannel

Most fashion companies have already fundamentally implemented the topic of omnichannel. Click & Collect, reserving items in the store or viewing store stocks are already possible for most of them. However, there is still a need for optimization in cases where a product desired by customers is not in the store. Companies must work to provide in-store information about product availability or offer options such as ordering from the store.

“The step towards a completely uniform database, towards a truly channel-independent view of customers – there is still a certain way to go,” says Spaan. If the systems are not sufficiently integrated, it is often not possible for store employees to view customers’ online shopping history at a glance and act based on that. This information about customer preferences can lead to further sales and increase satisfaction.

When using technology to find out which customers are in the store, retailers must also be mindful of privacy. That’s why most companies don’t bother with things that are theoretically possible, such as identifying people by their cell phones without them noticing, says Spaan. They try to find other touchpoints in order to recognize as early as possible, with the consent of the customer, when they are in the store. Companies can create incentives for people to, for example, identify themselves in the store via an app and then receive benefits. In a consultation-intensive industry, employees can also ask whether a person is a member of the loyalty program and view information by scanning cards or apps.

Investments

Most companies are currently looking at costs in many areas, says Spaan. But it is risky to save on the use of technology. Despite the difficult market situation, companies surveyed by the EHI want to make important investments in the technology sector. “We still see a very high willingness to invest and budgets that are still increasing,” says Spaan. Filtering out and prioritizing projects is important and is becoming more important.

“Some say: We can no longer see the forest for the trees because there is so much that could be done,” says Spaan. Which topics should definitely not be neglected, even for companies with limited financial resources, and which are more suitable for organizations with deep pockets?

“You have to deal with the topic of AI, but it is not an end in itself. “I have to look at where it can actually be of benefit,” says Spaan. Topics such as AI in stores with cameras or smart shelves are less pressing.

“When it comes to omnichannel, you shouldn’t stop optimizing and improving,” says Spaan. “It is important to be clear about what your target group and what your customers want and expect.