What is Fashion’s next big trend is a three digit billion dollar question. It is however not a question, that, personally, I thought I wouldn’t have much to contribute to, given that I work in a technology company, where the biggest trend seems to be goofy meme t-shirts. So, naturally, our approach to fashion trends is completely non-traditional and does not rely on our own fashion expertise (which is probably a good thing).
Traditionally, trend scouting starts by closely following high fashion designers and fashion shows, which may be picked up later by the mainstream fashion industry.
Other trend sources can come from films and TV series, influences from YouTube and the blogosphere. To determine exactly what will sell in the next seasons used to be a question only industry experts, with decades of experience, could determine. Then, it was more of a guessing game, when a trend wave would pick up and how long it would last before slowly ebbing out or being completely consumed by another trend.
At Lokad, our data scientists have developed algorithms to revolutionize this trend scouting process, allowing for large scale reliable and accurate sales predictions based on prior seasons’ sales history. Furthermore, while trend-scouting may be the holy grail of purchasing decisions for fashion organisation, identifying statistical noise is equally important and usually completely overlooked. Excluding noise in demand, that is observed “links” between products that are happening at random without any particular trend connection, can boost the effectiveness of any buying decisions.
To find out what actually drives sales, that is what attributes of a product make customers buy a product is somewhat elusive. Defining a product for now is more of an art than a science. At Lokad, our quantitative approach allows us to study precisely what has triggered sales, may it be a fancy product name, a combination of price, value of material or may be a certain visible accessory, which made a customer choose one product over other similar products.
In particular, Lokad can leverage similarities between products to predict sales quantities of products that have never been sold anywhere by comparing it to sales of other products in the past. To look for similarities between products, Lokad analyses not only product attributes such as materials or colours, but also envisions leveraging the selling history of customers.
Identifying early trend adopters within a customer base allows Lokad to obtain a next season “preview”: for example, imagine you have that one very fashionable colleague who always wears a certain colour before everyone else does. With big data crunching tools, Lokad can identify this colleague and through their current shopping habits can pick up what many others will want to buy next season.
However, in the end, there is no way around a team of fashion experts who can distinguish the mega trends from the “ordinary” ones. However, with Lokad, this expert group can leverage their insights on a much higher scale with high statistically sound computational power – minimizing costs for any brand or market place. This is what we refer to as augmented human intelligence, putting the enablement of the expert group as the ultimate goal of our work.
This article was first published on LinkedIn on October 14, 2017.
Disclaimer: Katharina currently works as a supply chain scientist at Lokad.