Importance of Trend Forecasting in Fashion - A Seminar by Dhruv Tripathi
About the Speaker:
Mr. Dhruv Tripathi is the CEO and Head of Trend in F-Trend. He has previously worked as head of Snapdeal trend and head of Levis Men's denim department.
He has experience of over 11 years in trend and design with internationally recognized figures. His views were also published by The Daily Beast - a big US publishing house lead by Hillary Clinton.
On the 12th of June, 2021, Mr. Dhruv Tripathi conducted a seminar on Why Trend Forecasting is important for the Fashion Industry, and what follows is an extensive summary of the seminar.
Why We Need Trend Forecasting?
You have the data of the past and now, but when we talk about the data that is important for the future So, the future could not be predicted based on that data. The reason is that it's only going to help you predict the future, but we need to have a holistic approach. So, we need to follow a trend management system or trend mapping system that reads these three crucial needs for modern business because it is designed to navigate complexity and Assist organizations in managing the overload of data and insights.
How can we avoid the complexity? How can we become more creative? How can we help the consumers to support their life?
So, trend forecasting is like a check and balance system. This method of checks and balances enables brands and organizations to imagine and test out theories and ideas before translating them into business or innovation strategies.
So, there comes emotional forecasting because everybody is connected to their personality on an emotional level. So, we need to not use only just the data, since data is all about facts. Instead, In this case, we need to forecast based on the feeling.
In a fast-moving field such as clothing, food, interior paints, cosmetics, and retail marketing. Wherever you need creative insights, there is always a demand for a more emotional kind of feeling.
This approach is also extensively used by the automotive and technology sectors where CMF strategies are developed to create an emotional consumer bond. To put it in simple words, to make us fall in love with the product. So, until and unless your product is not communicating with consumers on an emotional level, the consumers will not be able to fall in love with your product.
For example, let us say you are trying to build a brand of your own, but you are not able to connect with the consumer on emotional levels, you then must advertise the product to the consumer. But, when they do not connect with your product emotionally, they will start a lookout for other brands that can support their emotional requirements. This where the power of branding comes to play.
Lifecycle of Products:
For most of the products, the life cycle is generally composed of four phases as below.
The Launch or the Implantation
But, in Fashion Industry the life cycle of products is normally quite short, especially when compared to their long supply process.
Differentiating the nature of products based on their life cycle:
As for the clothing products, each product needs to be differentiated based on the nature of the products. Here are some of the examples to help you understand better.
Basic clothing items such as denim and plain white T-Shirts can be sold throughout the year.
There will be some fashion items which are sold punctually in a short period are not replenished.
Best selling items are sold each year with slight modification based on the fashion trends and these kinds of products can be replenished during the season.
The Hight variety of products generates a strong difference in terms of the lifecycle. It would be wrong of us to believe that every product has the same behavior & a similar life cycle. In terms of forecasting basic items and bestselling items are taken into account in the sales forecasting system. Please bear in mind that there is a difference between sales forecasting and fashion forecasting.
As for the one-shot supply, they are normally not considered in the traditional forecasting process. As a matter of fact, these kinds of items fall under the fashion category and are used by such fast fashion brands. These kinds of products have specific forecasts designed for them especially for the allocation of stocks in the stores and management of shelves.
Supply Chain Management and Fashion Forecasting:
The clothing industry needs support from a lot of other companies for its smooth running. It's like a machine where all these other companies act as important parts of the machine. These companies range from spinning of the fabric to distribution which is involved from the transformation of the fiber until creating the end product. The creation of the garment itself is a long and complex process that involves many manufacturing steps.
The irony is that while these fashion products have a long and daunting manufacturing process, the end product itself is transient and short lived-in nature. However, the major role in this process is played by the distributor who is downstream of the process. It makes orders for the upstream companies and supplies the consumer with its products.
These different stages with quite a long and fluctuated manufacturing times involve management based on a push flow strategy which makes the supply chain overly sensitive to the bullwhip effect.
In this context, fashion forecasting emerges as a key success factor of supply chain management.
Forecasting Systems must take the particularities of the clothing itself into account as well:
Garments and Weather are in a never-ending relationship which makes the garments very seasonal. The problem with it is that seasonal data provides generic trends, but the unpredictability of weathers involves significant peaks or hollows.
Sales are distributed by many exogenous variables such as end-of-season sales, sales promotion, the purchasing power of consumers, etc.…
Fashion trends provide very volatile consumer demands. The design and style should be always up to date and most of the items are not renewed for the next collection. Consequently, historical sales are often not available since most items are ephemeral.
The product variety is huge. Indeed, Items are declined in many color alternatives to meet the fashion trend, and in various sizes which should match with morphologies of the target consumers.
All the above constraints make the sales forecasting for apparel companies very specific and complex. Therefore, the implementation of such forecasting systems requires not only a strong background n the field of forecasting, but also full and precise knowledge of the operations and challenges of the fashion industry and in the supply chain.
The fashion industry as a whole is a mixture of a variety of products and this variety is one of the biggest constraints. The fashion trends involve various styles & colors. Not just that, fashion also defines the personality of the consumer. When you combine the colors and styles with various sizes, the product variety becomes huge and makes the Stock Keeping Unit very complex.
To help you better understand, let us take a look at an example of a Fashion eCommerce site like Myntra. If you have ever shopped on an eCommerce portal, you will notice that there is always a filter where you can filter out clothes based on color, size, brand, style so on, and so forth.
So, From the point of view of sales forecasting, this wide variety in products, the short lifespans, and the reference changing for each collection requires the companies to aggregate all of this information. As a result of such an extensive range of information, you will start seeing a large number of aggregation levels. All of this contributes to the complexity of fashion and fashion forecasting. The main issue here is to select the right level and criteria for aggregation.
Aggregation is always a very challenging thing to do since there are too many variables in play. For example, if you are not defining the age of the consumer, then the product a brand is trying to vary is not defined based on the age and it makes the process complex. So, in order to bring a tad bit of order in the chaos of all this data, certain classification methods are implemented. These classification methods are based on quantitative and qualitative attributes. But, the companies or the brands prefer to conveniently aggregate their data from a hierarchical classification of the topology of products.
The suitable level for sales forecast based for instance on time series techniques is the lower level which enables the company to get historical data of the several years. The historical data again adds to the complexity since the data involves what an age group might like and dislike, what kind of Shirts or T-Shirts were people choosing, and a lot more of such data. On the other hand, the data in the lower levels are ephemeral and no historical data is available.
These other techniques based on data mining and classification should be implemented.
Use of Data Vs Intuition:
You can see there are Sales of graph A and Graph B. Sales A is related to the basic items like Undergarments. Each year, you can find a similar pattern whereas, in B which are Shirts, T-Shirts show that there is a gradual year on year decline in sales The decline is mainly because the brand saw that the number of sales was great in year 1 and 2 and hence, they offered the same Shirts and T-Shirts in the year 3 as well. Hence, we need to analyze where the mistake happened that led to the drop in sales.
One key factor that most people forget that people demand newness in their lives. The best example is that if you keep eating the same vegetables every day, you get bored of them.
Understanding Human Brain:
To understand everything clearly mentioned in the previous section, we first need to understand how the human psyche works. Because, in every business, the fundamental thing to do is understand the consumers, and to understand them we need to understand how the human brain works.
Everything we feel, every choice that we make we make it because our brain tells us to do it. Hence it is crucial for us to understand Brain Mapping. There are two kinds of brain right and left. The left brain is all about logic, facts, and a pragmatic approach while emotions and feelings dictate the right-side brain. For example, if I come up to you and tell you a story and if you are a left-brained person, you will ask me for proof, logic, and factual information on the story. On the other hand, if you are a right-brained person will believe and start imagining the story that you just said based on how they feel about it.
A right-brained person would imagine how they would look in a particular attire and that dictates their decision of whether to buy the product or not. A left-brained person on the other hand looks for things such as the quality, features of the product.
In trend forecasting, we talk about four dimensions which are as follows.
Scientific Macro Trends
Social Macro Trends
Emotional Macro Trends
Spiritual Macro Trends
Social, Emotional & Spiritual are dictated by the right brain where are scientific are dictated by the Left brain.
Fashion Industry and Its Requirements for Forecasting:
Normally Brands require 18-24 months of the forecast, the reason being that the brands want to create something new for every season. The forecasts help them create their products early. This will also enable them to test the products & their designs thoroughly and address the issues in the products or any flaws in the designs. It will also give them enough time to work on marketing these products. Suppose if they ignore the forecast, then the brands will have very little time to work on their products and designs.
The decision-making process takes a lot more time than the time taken to manufacture the products.
Usually, the decision process in the fashion company starts with the definition of budget for the collection and/or the sourcing. When designers have selected the items, which should be included in the collection, the mix of budget and sales forecasting enables managers to launch the purchases or the production in the fashion industry, it is commonly known that consumer demands are very volatile.
The price of the product dictates the selection of consumers and in that way, consumers are indeed very unfaithful. To tackle this issue, Companies try to reduce their production costs by keeping a high service level.
That is the reason why most of the companies manufacturing processes take place in low-cost countries. This strategy leads to an increase in the lead time and the lot size of supplies. Consequently, the supply chain management has to be optimized to avoid delay, out of stock, and unsold and to keep the right inventory level.
Therefore, many supply chain management tools have enabled companies to improve scheduling and synchronizing of material and information flows. Most of these tools can be customized to the specific constraints of clothing retailing, however, their efficiency is mostly dependent on the accuracy of sales forecasts.
Where Trend Forecasting is Useful:
Marketing: Because marketing helps provide an emotional trigger to the consumers. Fashion forecasting will help companies to strategize their marketing as well as branding campaigns and decide on marketing channels.
Fashion: Fashion forecasting will help fashion brands and companies in the development of new products or seasonal products.
Campaign Planning: Communication is the key to everything, and you need to communicate your product in the most balanced and in a way that the message you are trying to communicate is not lost.
Human Development Planning: Forecasting is not limited to just the Fashion Industry. Governments and other organizations use forecasting for their plans for Human Development planning.
Future of Thinking: You can use the tricks of forecasting to have a forecast of your future and make the changes necessary in the present to achieve whatever it is you want to achieve in the future.
Corporate Structure Planning: If you go to any company where you want to work, you will see that the company is planned based on the age groups. So, to keep engaging new entrants and young people activities need to be held.SO, based on Psychoanalysis and other techniques, companies can forecast their future and plan the structure of the company accordingly.
We must know where the future is heading
Everything is required to be measure for the success in business and policy development
Why Fashion Forecasting?
Understanding what might happen in the future is important, even though we cannot predict the exact future, having an idea of where we want to be and forecasting what might prepare us for the circumstances and creates ways. Without it, we are sure to get lost.
Creative Industries such as Fashion requires Consumer’s emotional analysis rather than artificially measured. The fashion industry at the end of the day is more about feeling than facts. It is all about defining one’s personality based on their attire. If the consumer does not feel good or confident about the product, we will surely lose the market.
Decoding Society & Human Behavior:
Future forecasting is a relatively new and developing field, we believe in the fact that everything can not be perfect and hence the field itself is ever developing and improving day by day. We try and analyze the amount of perfection itself.
Having said that, in recent decades, fashion forecasting has become a widely accepted decision-making tool for accessing societal influences, economic drivers and ultimately in boosting sales to increase revenues and reputations.
You might ask why revenue and reputation? Let us answer that question with an example. Suppose you are at a retail store and see that the products there are not up to your personal expectations. This affects your perception of the brand itself and the store in a negative way which leads to a loss in reputation and by extension sales itself. So, it is necessary for brands to understand consumer's ever-changing expectations and improve them.
To understand the future better, it is imminent for us not just to understand the sociology of people, but also to factor in the sociology of things – technology in particular. We all know that technological development plays an important role in the interpretation of how global economies and cultures connect. This is another key reason why multidimensional trend mapping is fundamental for imagining the future.
For example, think of yourself as a fresh forecaster who is just learning the ways of the field and your focus is on factual things such as what colors are being liked and what styles are trending, etc… Then you are sure to get lost in the wrong information and your forecast will be inaccurate. That is why it's important to observe every aspect and everything that is going on in society along with understanding the psychology of colors, clothing & fashion. Do not focus on one thing, instead widen the focus and try to consume everything that is going on around you.
Every decade or so, you will see that a big change is imminent. If you take the example of the 21st century, we can see that 5G technology is coming, Artificial Intelligence is being used more than what we had expected, and the inception of Virtual Reality or Augmented Reality into the technological markets. Consumers grow intellectually and emotionally with time and that means the consumers today are far more emotionally and factually intelligent than the consumers years ago and we need to appreciate that change while creating the forecasts.
What all of this means is that the brands need to be able to find the consumer expectations in order to solve the requirements of tomorrow.
We must analyze the key drivers changing human behavior and by extension society as a whole.
The whole purpose of sociology is to develop a scientific understanding of the factors affecting group behavior, as well as understanding the interpersonal relationships occurring within those groups. Collective behavior is one of the several broad subdivisions within the overall discipline of sociology.
Analyzing social movement or the emergence of new forms of social order which encompass fashion change is a primary focus of the study of collective behavior.
It is especially important to more than from the study of collective behavior, the original theories of fashion emanated; consequently, it is an exceptionally important perspective from which to consider fashion change.
Retail & Fashion Forecasting:
There are a number of different retail formats through which fashion is sold within and outside India. Department stores such as Marks & Spencer, Shoppers Top Pantaloon, Debenhams, House of Fraser, John Lewis, Color Plus, Raymond, and British Home Stores(BHS) develop their own-label ranges and dominated the clothing marketing. These stores provide a variety of price ranges concentrating on the mass to middle-market price bracket.
Department stores employ buyers to develop in-house ranges which be sold under the store’s own name or under another label. For instance, If you go to the Pantaloons store, you will see that the shop has a Pantaloons brand and an assorted mix of other brands.
High street retailers usually develop garment ideas in conjunction with clothing manufacturers, liaising mostly with their designers and sales representatives. The vast majority of clothing sold in the UK is imported, though many garment suppliers have a UK-based design and sales team using Overseas production.
Fashion Multiples can be classified into several categories such as specialist fashion multiples indicated by price levels. These are broken down into the lower mass market such as H&M, Primark and Matalan, the middle mass market, The Arcadia group, Next, River Island or the upper mass market – Coast, Hobbs, and Jigsaw.
Supermarkets offer value clothing which gives a high volume of sales. Discount retailers such as T.K. Maxx stock a variety of brands or end-of-line ranges at the discount process. Outlet stores stock a diverse range from the mass market, middle-market to designer labels, prices being offered lower because they are from a previous season.
Fast Fashion’s Impact on Forecasting:
The rapid turnover and generation of new concepts and trends have been apparently driven by several factors; the rise of more immediate communication networks such as the internet; the increasing demands driven by celebrity culture, and consumers who want to dress like their favorite celebrity finally the emergence of fast fashion, which responded in part to the consumer cult of dressing like a celebrity, demanding high fashion, straight of the catwalk looks as quickly as possible.
For the suppliers, manufacturers, and retailers involved in the fashion industry supply chain, trend analysis and subsequent rapid development of commercially successful trends is a strategic part of their seasonal planning process and one which is increasing steadily in pace.
Rapidly moving trends and the philosophy of fast fashion, to essentially produce a facsimile of designer catwalk trends and launch them in store as quickly as possible, has changed the nature of some aspects of color trend development.
Traditionally, color trends were researched over 2years ahead of the season and developed by the forecasters, ready for publication eighteen months to two years ahead of the season. Clearly, with fashion timescales such relatively relaxed and lengthy critical paths are not now possible for those retailers engaged in fast fashion.
Seasonal Fashion Set Up in the Retail Sector:
The advanced selling seasons depend heavily on the textile industry, the designers, the manufacturers, and the retail buyers. This dependency on various industries makes the process a bit more complex and time-consuming. The entire cycle of manufacturing fashion products and those products going to the consumers for actual purchase takes at least 18-24 months.
We need to separate two types of retailers – basic retailers and fast-fashion retailers. Fast fashion retailers require frequent development of new retail products since the fast fashion’s lifecycle is relatively lesser. On the other hand, basic retailers wait for the trend to settle in the market. If you walk into a Lewis store and a Zara store, you will see the difference. Lewis waits for the trend to settle or even change and hence you won’t see mind-boggling products in Lewis’s store. But, in Zara, you will get to see every type of product. Keeping this in mind, the marketing strategies raises issues such as product lead time for manufactures and product buying cycles for retailers since fast fashion retailers will have a shorter product buying cycle when compared to that of Basic or classic retailers.
It has been observed that conventional timescales required by industry to produce fabric and garments and sell them to retailers mean that forecasters work two years ahead.
Changes in consumer lifestyles and constraint demand for newness have exerted pressure on the established supply chain format. Trying to predict what consumers would buy in the next 6,12 or even 18 months is one of the biggest challenges for fashion retailers and manufacturers.
When the forecasts are not done, the whole process gets delayed. You can check out the below Seasonal retail buying sequence to understand better.
Trend Mapping Process:
Here is a list of the things that go into the Trend Mapping process.
Frame: Understand all the challenges are a company or brand is facing and frame those challenges.
Ideate: Brainstorm ideas on what will your product be and how it going to look like etc. For this, you need to have talks with the creative teams, the team of fashion designers, and management.
Observe: Observe the Behavior of consumers & understand the context.
Research: Field research & Online research.
Synthesis: Understand the key Risks & Opportunities, Do a SWOT analysis.
Report: Create a Summary & Concept of the report.
Action: Strategy & POA
Trend Spotting Clues:
When we want to spot new and emerging trends, we can start by looking at the trend characteristics that have been covered in this module:
It’s the people who create trends, Hence, trend spotting is more about watching people who are creating trends or are preoccupied with new and innovative styles.
Trendspotting is possible because the key element in the development of any trend is observing, either in real life or in the media. What the trendsetters observe, we can also observe.
A new trend has almost always been simmering for some time before it starts blowing out.
If a new, innovative style is visible in two (sometimes more) industries at the same time, it is likely to be a trend.
A new trend is often a reaction to what has become mainstream or what has been n the market for years.
Change in style often goes from one end of the style spectrum to the other.
To be a successful trend spotter, you must watch out for discrete signs of change and then put them into the analytical framework that is presented in this model.
Trend Forecasting Key Guidelines:
We must separate trend forecasting methods based on right-brain and left-brain personalities. We must separate products based on whether it’s affecting the left brain or right brain personality.
Example of left-brain products are products which are fact-driven and these mainly falls under technological products such as mobile phones and other electronic gadgets. While packaging and aesthetics design must decide based on the right brand personality.
For right brain personalities, we should implement VALS which means we should implement transfer and Freud theories. As for the left-brain personalities, we can use the PVP model. PVP model is the model that Trends has developed for its clients.
What makes Fashion Forecasting Amazing Career Choice:
I am not going to discriminate since I am from Fashion Forecasting. But still, I love forecasting and you all will also love forecasting. The reason is that it also provides amazing choices like you get celebrity status and get recognized as an expert in the fashion industry and get photographed as well. It is what most people think of when they start off their career in this field. A Fashion Forecaster is also a designer, but he is not designing, but he understands how designing works. As a designer, he will know what part of the design will work and which part of it might not.
Apart from all of these, you can also become a famous journalist which gives you the opportunity to visit new places, meet industry leaders, celebrities, and lots of new people while you are reporting amazing things happening in the industry.
As a fashion forecaster, you will have the knowledge of how and where the fashion industry is moving and every bit of news that is impacting society and humanity.
The best part of it all is that you will not have to hustle through a 9-6 job.
So, that was all the things discussed during the seminar, if you are looking to become a fashion designer or a fashion forecaster, check out various fashion designer courses offered by us. IIFT is regarded as one of the best fashion designing colleges in Bangalore because of its knowledgeable faculty and excellent placement records.