Building a digital atelier: How fintechs are disrupting the fashion industry and combating waste

If every potential author has at least one book in them, then every potential entrepreneur has at least one great disruptive idea in them. In my case, when inspiration struck, I knew exactly which big picture I wanted to disrupt. The fashion industry has long been operating on a push model; centred almost entirely around what designers and brands want to sell rather than what consumers want to buy.

The fashion industry has long been operating on a push model.

But the most cursory glance around the world today can confirm that this model is rapidly losing ground.

In many walks of life, consumers increasingly value their individual expression more highly than conformism to mainstream ideals; and fashion is no different. What’s more, while once customers only cared about if they like the product, today they care much more about the environmental and societal impact of their choices and their favourite brands’ practices. The time is ripe for a transition to a textile system that delivers better economic, societal, and environmental outcomes; and it was against this backdrop that Gonçalo Cruz and I founded PlatformE.

Once we honed our idea, we knew getting funding would hold the key to taking us from concept to reality on the scale we were looking for. To that end, we recently received $12 million of Series B funding, which will help us continue to power ahead with the expansion we have in mind. Fashion is a global business, with lines rapidly blurring between in-store and online – and our product aims to match that scope – so working with our investors was about networking in order to meet that ambition, as much as it was about funding.

We wanted to address one of the industry’s biggest challenges – that of waste through overproduction.

Our recent round of funding will be instrumental in the operational developments we will be making across fashion, footwear, accessories industries to tackle overproduction; but it also positions us clearly for the future as we continue to work to progress the world’s transition to waste-free and full sustainability, in line with initiatives such as the G7 Fashion Pact.

UK citizens discard around a million tonnes of textiles per year. Charity shop donation rates are high, but around three hundred thousand tonnes of clothing still end up in household bins every year, with around 20% of this going to landfill and 80% incinerated. The Ellen MacArthur Foundation estimates that the fashion industry loses over $400 billion a year in unsold stock and waste, representing 15% of all products.

While many governments and household names in the fashion industry have made their own pledges and commitments to tackling this phenomenon through initiatives for collection, reusing and recycling, the need for further disruptive thinking and action is very clear. For example, globally, hundreds of thousands of tonnes of fabric are wasted at the design and production stage before clothing reaches the customer. When garments are cut out as patterns, for instance, as much as 15% of the fabric can end up on the cutting room floor. And once the production runs are set up, the norm is almost always to over produce (risking wastage) rather than underproduce (risking sales revenue).

What if we could interrupt these cycles of waste, using new technology?

But what if we could interrupt these cycles of waste, using new technology, built on age-old wisdom. Made to order (MTO) fashion is not actually a new concept. Quite the opposite. From the heyday of tailors, dressmakers and cobblers, for the majority of its history, the fashion industry has been focused on customisation and bespoke production. And even today, there is a significant value placed on personalised products – which are far more likely to worn and kept for longer than an off-the-rack purchase. What could the modern-day bespoke fashion experience look like at scale?

Technology exists which allows brands to launch rich made-to-order experiences on digital and retail channels (e-commerce, social media or in-store), adapting to specific brands’ needs and being easily integrated into existing systems. Technology can also enable the end customer to be part of the (co) product creation process, giving them the chance to combine different materials, colours, accessories and the possibility of creating millions of combinations before finishing their MTO production request.

In commercial terms, the potential is significant. According to Deloitte research, one in three consumers surveyed were interested in personalised products, with 71% of those prepared to pay a premium for such embellishments. Moreover, focusing on the fashion sector, 15% of those asked are prepared to pay a substantial mark-up – more than 40% over the asking price – for such items.

For retailers, the opportunities abound. We are trying to help fashion, footwear and accessories brands transition to digital collections and MTO, where they can expect the customised products stream to account for an estimated 10-20% of total business generated.

In practical terms digitalisation of the customisation process means drastically reducing the millions of sample products created and discarded. It can also significantly streamline large production runs, minimising the amount of unused clothes which end up in landfill or even burned.

Ultimately the fashion industry will have to make a lot of changes across the board, including innovation in the materials, energy sources and production methods currently in use. But for now, MTO technology can significantly reduce the march of overproduction – while still offering customer satisfaction, brand engagement and opportunities to increase sales.

ByBen Demiri, CEO & co-founder, PlatformE