Artificial Intelligence in Fashion Retail: Opportunities, Challenges and Governance

Abstract

Artificial Intelligence (AI)'s rapid expansion has changed the process of garments design, logistics processes, and advertisements in the fashion industry worldwide. From forecasting trends and tailored advertising to machine-based stock optimisation, AI is forcing apparel businesses to make radical gains in operations efficiency and competitive success in the marketplace, while creating unprecedented potential. However, this rapid remolding of operations has brought an innumerable number of issues. As apparel businesses rely increasingly on decision-making based on AI, issues concerning fairness in implementing AI, safeguarding their information, and consumer confidence have gained worldwide attention. Infrastructure gap in AI between large and small- or medium-sized companies in the fashion industry impedes equal adoption of AI heavily and expands the distance between large companies in fashion and small- or medium-sized companies. Moreover, a failure in a governing framework of laws at the same time compels fashion companies to reach a compromise between innovation in technologies and meeting stakeholders' rising expectations for ethical accountability and governance. This research aims to explore broader ethical, technical and legal problems caused by new applications of AI which are reshaping the value chain in fashion. Based primarily on qualitative research, it reviews recent findings and reports in the industry in an attempt to map cutting-edge applications of artificial intelligence in the fashion industry. It marks an imperative for developing transparent guidelines for collaborative mechanisms in governance and thereby offers business professionals in the fashion sector a modern-day overview for balancing competitiveness versus responsible use of AI in the sector.