Fashion Industry Embraces Innovative Product Discovery: A New Era
The fashion industry is undergoing a significant transformation as brands grapple with the challenge of overwhelming choice, leading to a decline in conversions and abandoned online shopping carts. A staggering 74 percent of customers are walking away from purchases due to the sheer volume of options available to them. In response to this trend, retailers are starting to rethink their strategies to increase relevance and reduce choice paralysis.
Asos, for example, has announced plans to streamline its offering by reducing stock intake by 30 percent in the first quarter of 2024, with a further 16 percent reduction slated for the end of the year. This move is aimed at providing customers with fewer but more relevant brand options to enhance their shopping experience.
Search Dominates Online Product Discovery
The primary mode of online product discovery continues to be through search, with 69 percent of customers heading straight to a retailer’s search bar when shopping online. However, a staggering 80 percent express dissatisfaction with the search experience, often leading them to abandon the site altogether. The main barrier cited by 41 percent of customers is the presentation of irrelevant search results.
Generative AI: A Promising Solution
Fashion brands are turning to generative AI as a potential solution to the challenges they face in product discovery. While these efforts are still a work in progress, some early adopters are reporting promising results. For example, Revolve has seen significant increases in customer engagement through its experiments with generative AI-powered search. On the other hand, Kering introduced Madeline, a ChatGPT-powered shopping assistant, only to later disable the feature after initial testing on KNXT.
Future Outlook: The State of Fashion 2025
In The State of Fashion 2025 report by BoF and McKinsey, industry experts predict a shift towards increased curation in search and discovery for customers in the coming year. Customer product discovery and search are expected to be the top-ranked use case for generative AI in 2025, as fashion executives recognize the growing demand for AI-powered shopping experiences.
Emerging AI Challengers
Several emerging AI-powered shopping platforms are reshaping the landscape of product search in the fashion industry. Companies like Daydream, Capsule, and Constructor are leveraging generative AI, machine learning, and computer vision to deliver highly personalized search results and enhance the overall shopping experience for customers.
Daydream, for example, has raised $50 million in seed funding and partnered with brands like Alo Yoga, Jimmy Choo, and Dôen to launch a beta version in Autumn 2024. Similarly, Capsule’s on-demand product discovery platform uses computer vision and deep learning to identify similar styles based on user-uploaded images, with a remarkable 99% match rate in its launch week.
Social Media’s Impact on Fashion Discovery
Social media platforms are playing an increasingly important role in how customers discover and purchase fashion. While brand discovery through social media is now as common as through search engines, social commerce has yet to reach its full potential in the US and Europe. However, with predictive algorithms and integrated shopping journeys, social media’s role in fashion discovery is expected to grow significantly in 2025.
As executives navigate this evolving landscape, it is crucial to prioritize building AI foundations, prioritizing value and accuracy, and managing risks and ethics to ensure a seamless and personalized shopping experience for customers. By embracing innovative product discovery methods, the fashion industry is poised to enter a new era of customer engagement and satisfaction.
This article first appeared in The State of Fashion 2025, a comprehensive report on the global fashion industry co-published by BoF and McKinsey & Company.