Eye on AI - April 1st, 2022
Welcome to Aigora's "Eye on AI" series, where we round up exciting news at the intersection of consumer science and artificial intelligence!
This week, our focus turns to fashion AI as we delve into new ways data and NFTs are accelerating the industry’s transition toward a digital future.
Enjoy!
How Nike Uses Data to Better Target Customers
Most people recognize Nike as a leader in sports science and retail. While that’s true, according to Bernard Marr’s recent article “How Nike Is Using Data to Sell Directly to Customers,” behind that image is a well-laid, data-driven plan to sell more effectively.
“In 2011, DTC sales accounted for 16% of Nike brand revenue (or $2.9 billion of the total revenue of $18.1 billion),” writes Marr. “By the end of the 2020 fiscal year, DTC sales had grown to 35% of overall sales, or $12.4 billion. This bump in DTC sales is driven by Nike’s new formula for growth, which focuses on building a data-centric organization that can compete with existing e-commerce giants like Amazon.”
In the same way, Amazon uses the flywheel approach, Nike’s D2C data plan works to share, consolidate and sort through massive amounts of data in order to make informed product and service decisions and recommendations. Also similar to Amazon, Nike has a treasure-trove of 1st party data resources at its disposal. Fitness apps. Sales resources. In-store and digital. To sort through that data, Nike acquired two predictive analytics companies between 2018 and 2019, which now help run Nike’s personalization initiatives.
“Nike can now anticipate consumer demand and determine what products they should produce and where those products should be sold,” continues Marr. “Nike's hyper-local approach to inventory management ensures the customers can always find what they need and be able to purchase the items they're most interested in.”
Big brands all seem to be leaning into predictive analytics to add to their growing D2C capabilities, either through in-house development or acquiring predictive companies. Amazon purchased DataRow, a data exploration platform, in 2020. Apple purchased its own data-focused company in 2015. McDonald’s acquired predictive analytics startup Dynamic Yield, which it recently sold piece-mail to Mastercard. The goal is always to develop data analytics in-house; easier said than done. For those brands looking to better utilize their data without the resources of Amazon or Nike, vendors are still an effective way to get started.
Tommy Hilfiger Releasing NFT Collection at Metaverse Fashion Week
Speaking of data, ever heard of these strange new virtual worlds called metaverses? Probably. So too have fashion retailers, so much so that for the first time in history Fashion Week took place inside a metaverse this week (Decentraland). To capitalize, smart retailers like Tommy Hilfiger created specialized NFTs just for the occasion.
“Reportedly, Tommy Hilfiger has partnered with Boson Portal, a metaverse marketplace located in Decentraland,” writes NFT Evening contributor Reethu Ravi. “Basically, it’s a Fashion District not unlike Paris’s legendary Avenue Montaigne. Here, brands can virtually sell both their digital and physical items via NFTs. Tommy Hilfiger’s own digital store too will be located within Boson Portal.”
What makes the Tommy Hilfiger NFT store unique is that NFT buyers have the option to redeem the NFTs they purchased at the event for physical products. Tommy Hilfiger isn’t the only fashion brand that hoped to take advantage. Dolce & Gabbana, Franck Muller, DressX, Roberto Cavalli, Coach, and over fifty others joined in. Event attendance was free (so long as you signed up for Decentraland’s metaverse), though users needed to bring their digital wallets to purchase items. Interesting concept. Tons of potential. A validating event for both NFTs and the concept of the metaverse.
Other News
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