The coronavirus has forced the world to hit the pause button, as health agencies and government officials scramble to mitigate the pandemic. But while public health is, and must be, the priority, it is far from the only concern.
Financial markets have been left in tatters by the outbreak, with trillions of dollars in losses. According to analysis by management consulting firm McKinsey & Co., there are three potential outcomes: a fast recovery, a worldwide slowdown and a pandemic-fueled recession. Analysts and investors are fearing the worst of those scenarios.
Add the downturn in traffic for public spaces, and there’s plenty of cause for concern. And the effects may not be all that temporary.
For Laura Schaack, vice president of strategy at digital tech firm Majestyk, virus response may wind up being an accelerant of change that has been long in coming. In fact, she told WWD, she believes the crisis is forcing revelations that could “spur an entirely new decade for the fashion tech industry.”
Majestyk works with brands pursuing everything from mobile apps and web sites to emerging tech, such as augmented reality, artificial intelligence and machine learning. The firm counts major players, including Citibank, IBM, Chick-fil-A, Pepsi, Chevrolet, AirBnB, Adobe and Goodyear as clients, as well as beauty and fashion clients, such as Kybella, Astarte and Label B.
Schaack broke down some fundamentals: “Very, very few people are eager to be in physical settings and physical places, which is just going to be a rapid increase in them being online,” she elaborated. “I think that’s going to have an exponential increase in e-commerce, which is going to force [retailers] to innovate.
“Why do people buy in person, rather than online? There are all of these boundaries,” she continued. “What is the fabric like? How does that fit? Now really, really quickly, the fashion-tech sector is going to have to innovate overnight, essentially, to react to that.”
She identifies technologies like augmented reality as a crucial tool to “combat the fact that, maybe, people aren’t going to be there in person.”
Her insights are born out of her work in fashion and early-stage tech companies. She used to work with Nicole Miller, and prior to joining Majestyk, she was a director at luxury fashion start-up WearAway, as well as other companies.
Schaack sees other tools, such as 3-D printing, potentially getting another look — and perhaps investment and more development — particularly as traditional sourcing and production appears to be at risk.
“The U.S. relationship with China hits both [fashion and technology], so China has a significant role in both of those industries,” she added. “China is, technologically speaking, the U.S.’s number-one competitor. From a manufacturing perspective, it’s obviously wildly relying on it. So the fashion-tech industry — at the intersection of all that — is hit extra hard, even compared to other industries.”
She’s also keen to note another player that could challenge China’s production dominance: Saudi Arabia.
The kingdom recently unveiled details for the launch of a fashion commission, as outlined in a plan by the Ministry of Culture. The group is tasked with overseeing the country’s growing design scene. And its Future Investment initiative, a key player in the country’s Vision 2030 goals, is expected to help transform the region into a global fashion technology hub.
“Even though oil is their main trade, we’re going to eventually move away from those types of resources, to more sustainable types,” said Schaack, which helps explain some of Saudi Arabia’s newer priority.
The change could be tectonic for the fashion business. “It’s essentially like having all these new players, which reduces the monopolization that China had on the industry globally, and really democratizing fashion and innovation on an international level,” she added.
And that appears to be happening during the downturn in consumer trust for goods made in China.
“That’s going to be a long-term reverberation,” she said. “[There are already] consumer trust issues with products from China, because of human rights issues or other political issues, because of estranged relationships politically between the U.S. and China in the past.
“No one’s debating buying products from Italy,” she added. “No one’s debating buying Louis Vuitton, are they?”