Generative AI: Unlocking the future of fashion (Guest blog by McKinsey QuantumBlack)

Guest blog by Holger Harreis, Senior Partner, Düsseldorf; Roger Roberts, Expert Partner, Bay Area; Kimberly Te, Business Analyst, Digital; and Theodora Koullias, Senior Engagement Manager at McKinsey QuantumBlack #AIWeek2023

While still nascent, generative AI has the potential to help fashion businesses become more productive, get to market faster, and serve customers better. The time to explore the technology is now.

As this season’s fashion weeks wrap up in London, Milan, New York, and Paris, brands are working to produce and sell the designs they’ve just showcased on runways—and they’re starting next season’s collections. In the future, it’s entirely possible that those designs will blend the prowess of a creative director with the power of generative artificial intelligence (AI), helping to bring clothes and accessories to market faster, selling them more efficiently, and improving the customer experience.

By now, you’ve likely heard of OpenAI’s ChatGPT, the AI chatbot that became an overnight sensation and sparked a digital race to build and release competitors. ChatGPT is only one consumer-friendly example of generative AI, a technology comprising algorithms that can be used to create new content, including audio, code, images, text, simulations, and videos. Rather than simply identifying and classifying information, generative AI creates new information by leveraging foundation models, which are deep learning models that can handle multiple complex tasks at the same time. Examples include GPT-3.5 and DALL-E. (For more on generative AI and machine learning, see “What is generative AI?”1 and “Generative AI is here: How tools like ChatGPT could change your business.”2)

While the fashion industry has experimented with basic AI and other frontier technologies—the metaverse, nonfungible tokens (NFTs), digital IDs, and augmented or virtual reality come to mind—it has so far had little experience with generative AI. True, this nascent technology became broadly available only recently and is still rife with worrisome kinks and bugs, but all indications are that it could improve at lightning speed and become a game changer in many aspects of business. In the next three to five years, generative AI could add $150 billion, conservatively, and up to $275 billion to the apparel, fashion, and luxury sectors’ operating profits, according to McKinsey analysis. From codesigning to speeding content development processes, generative AI creates new space for creativity. It can input all forms of “unstructured” data—raw text, images, and video—and output new forms of media, ranging from fully-written scripts to 3-D designs and realistic virtual models for video campaigns.

These are still early days, but some clear use cases for generative AI in fashion have already emerged. (Many of these use cases also apply to the adjacent beauty and luxury sectors.) Within product innovation, marketing, and sales and customer experience in particular, the technology can have significant outcomes and may be more feasible to implement in the short term compared with other areas in the fashion value chain. In this article, we outline some of the most promising use cases and offer steps executives can take to get started, as well as risks to keep in mind when doing so.

In our view, generative AI is not just automation—it’s about augmentation and acceleration. That means giving fashion professionals and creatives the technological tools to do certain tasks dramatically faster, freeing them up to spend more of their time doing things that only humans can do. It also means creating systems to serve customers better. Here’s where to begin.

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