Product Making Industry - SWOT Analysis

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Product Making Industry - SWOT Analysis

Key Takeaways

  • The Singapore government's investment in digital transformation will enable designers in the country to digitize the product-making process in the fashion and furniture industry.
  • According to a survey that was conducted by Dsg, designers in Singapore lack exposure and do not think at a global scale.
  • Examples of early adopters of digitization initiatives in the fashion and furniture product-making process include Republique and IKEA.

Introduction

The report below provides an analysis of the digitization of the product making/manufacturing process in the fashion and furniture industries.

Fashion

  • Fashion designers are using technology to recognize and predict market demand. They are also using technology to respond quickly to market demand with fashionable designs and customizable styles.
  • Artificial intelligence can be used to predict what consumers will want to wear. This can reshape how fashion products are designed and developed.
  • Fashion designers are using tools such as design software like CAD, AR, and 3D modeling.
  • Virtual design technologies are now used to supplement conventional design processes to save time, to have streamlined processes that are also resource-conservative.

Augmented Reality

3D Modeling

  • 3D Modeling is a computer graphics technique for creating 3D digital representations of objects.
  • 3D Modeling can help fashion designers to produce custom designs, change designs at any stage without wasting resources, and import specs to allow them "to see how fabrics move in motion."
  • Using 3D modeling, designers can send the designs to a manufacturing site for construction/manufacturing.

Furniture

  • The furniture industry has been relying on manual processes, however, increased demand for furniture and the need to reduce costs has led to digitization.
  • Digitization of the furniture-making process entails integrating the process from the e-commerce website to manufacturing in order to reduce delivery times, decrease mistakes, improve quality, and raise profitability.
  • The furniture design-to-production process has evolved significantly in recent years, shifting from mass manufacturing to mass customization.

Augmented Reality

  • Augmented reality allows designers to superimpose virtual objects on a user's real-world view.
  • For the furniture industry augmented reality applications help designers to "locate desired objects in a real space, giving a better sense of scale, color, and how the environment will look in the future."

Artificial Intelligence

  • Artificial intelligence in the furniture industry is used for generative design. This entails developing numerous iterations using instructions given by the user, to find the best solution.
  • For instance, Kartell's A.I. created a chair using artificial intelligence. The generative design was used to find a strong and good-looking chair.

SWOT Analysis

Fashion

Strengths

  • According to Janio, millennials form the fashion industry's largest consumer segment in Singapore. Additionally, during the COVID-19 pandemic, Gen Zs were the largest segment (39%) of shoppers who purchased fashion goods online. These groups of consumers are shaping the way brands operate by pushing for digitization in the fashion product-making process.
  • Millennials are generally seen as a driving factor for ESG investments. It can be deduced that this segment will contribute to designers being social and environmentally conscious.
  • Singapore launched its Smart Nation program in November 2014, with the goal of pursuing a nationwide digital transformation. It hoped to be the driving force behind Southeast Asia's digitization revolution. The government has also invested in digital infrastructure.
  • Additionally, the Singapore government launched the Smart Nation program to improve lives, the environment, and make the country competitive.
  • The Singapore government's investment in digital transformation will enable designers in the country to digitize the product-making process in the fashion industry.
  • The Singapore Government has also come up with initiatives to support its citizens to acquire digital skills. For instance, the government has partnered with Google through the Skills Ignition SG program to offer in-demand digital skills. These initiatives will help designers in the country to obtain the necessary skills for digitizing the fashion product-making process.
  • Global trends fueled by the COVID-19 pandemic are expected to drive digitization in the industry. Factors such as physical distancing and a contact-free economy are expected to lead to a higher level of automation in product-making.
  • Demand for a sustainable supply chain in the fashion industry will also accelerate the digitization of the fashion product-making process. Many consumers are looking for brands that can show sustainability and representation. According to Heuritech, "technological innovations are stepping in to create an industry that is more efficient, human, and sustainable."
  •  Technological advancements in the industry such as 3D modeling, artificial intelligence, and augmented reality are expected to contribute to the growth and digitization of the industry. According to Heuritech, digital solutions will also help the industry become "more eco-responsible, diverse, and inclusive."

Weakness

  • According to a survey that was conducted by Dsg, designers in Singapore lack exposure and do not think at a global scale. They also "had the tendency to design for experiences and contexts they were directly familiar with."
  • The high initial investment cost for digitization is a challenge to the digitization of the fashion product-making process. For instance, the crypto fashion demands significant investment and experimentation.
  • The culture within the industry limits digitization. According to Simon Butler, head of retail for Capgemini, "designers, buyers and product developers prefer to see the fabrics in person, match the design to the exact fabric color, and feel the quality and finishing." This makes digitization harder.
  • Lack of solutions in the market that bridge the gap between creative design and product development.

Opportunities

  • Designers in Singapore can take advantage of the existing government incentives to digitize the product-making process.
  • Gaming is increasingly becoming an "extension of the real world." This offers an opportunity to fashion industry designers to engage gaming platforms in designing virtual fashion assets. For instance, brands such as Ralph Lauren and Gucci have partnered with gaming platforms to create virtual fashion collections.
  • Additionally, fashion designers may use these gaming platforms to engage young consumers that are unlikely to connect with companies in physical formats.
  • The growing adoption of blockchain technology and NFTs offers an opportunity to fashion designers. NFTs can be used by designers for authentication purposes. For instance, Republique, a startup in Singapore founded by James Gaubert, a designer and stylist, designs digital garments and utilizes NFT to auction them.
  • The metaverse and NFT solutions employed by brands such as Republique are aimed at making "clothes more inclusive, ethical, creative, and sustainable."

Threats

  • The fashion industry is harmed by recurring Covid-19 outbreaks and subsequent shutdowns. For instance, in 2021, Covid-19 outbreaks in Vietnam caused the closures of numerous factories and affected the supply chain of companies like Adidas.
  • Technical challenges such as cybercrimes threaten the digital transformation of the fashion product-making process.

Furniture

Strengths

  • Factors such as fluctuating demand for furniture are expected to drive digitization in the industry.
  • Singapore launched its Smart Nation program in November 2014, with the goal of pursuing a nationwide digital transformation. It hoped to be the driving force behind Southeast Asia's digitization revolution. The government has also invested in digital infrastructure.
  • The government's investment in digital transformation will enable designers in the country to digitize the product-making process in the fashion industry.
  • Furniture consumers, including Singaporeans, are "more design and tech-savvy, health-conscious and affluent." They have higher expectations of the stuff they can afford. These consumer attitudes are expected to drive furniture designers to digitize their product-making process to fulfill this need.
  • The Singapore Government has also come up with initiatives to support its citizens to acquire digital skills. For instance, the government has partnered with Google through the Skills Ignition SG program to offer in-demand digital skills. These initiatives will help designers in the country to obtain the necessary skills for digitizing the furniture product-making process.
  • Technological advancements in the industry such as augmented reality and artificial intelligence are expected to contribute to the growth and digitization of the furniture industry. These solutions will also enable the industry to become more eco-friendly and inclusive.
  • According to Statista, as of 2019, about 40 percent of businesses in Singapore stated that they have invested in digitization.
  • Various organizations have also been launched in Singapore to promote digital transformation in the industry. Organizations such as Singapore Furniture Industries Council (SFIC) offer training opportunities to designers.

Weakness

  • According to a survey that was conducted by Dsg, designers in Singapore lack exposure and do not think at a global scale. They also "had the tendency to design for experiences and contexts they were directly familiar with."
  • The high initial investment cost for digitization is among the key reason cited by small and medium businesses in Singapore for not digitizing their product-making processes. A survey conducted by UOB bank found that 34 percent of SMBs "cited cost as a key reason for not going the digital route." Additionally, 26% of SMBs did not have the funds to continue with digital transformations.
  • Lack of digital skills is another key reason limiting digitization. The UOB bank found that 31 percent of SMBs "were worried about their employees' lack of necessary digital skillsets."

Opportunities

  • Furniture designers in Singapore can take advantage of the opportunities provided by Singapore Furniture Industries Council (SFIC). SFIC offers "an integrated training institute and design studio at Level 1 that encourages industry players to come together to innovate as well as upgrade their design capabilities. It also boasts collaborative and shared spaces that could host industry-sharing events such as design-led talks or provide an avenue for companies to showcase their brands to others."
  • The metaverse presents an opportunity for furniture designers to engage audiences by designing virtual products. For instance, designers such as Ezequiel Pini and Alexis Christodoulou have found a following for their virtual products. This has been fueled by the number of brands that are using virtual scenography for product advertisements.
  • These opportunities are also expected to enable the industry to become more eco-friendly and inclusive.

Threats

  • The COVID-19 pandemic has also had a negative impact on the furniture industry and in turn, affected designers.
  • Technical challenges such as cyber security hamper the digital transformation of the furniture product-making process. According to the UOB bank survey, 31% of SMBs were worried about cybersecurity.

Case Studies

Republique

  • Republique is a startup in Singapore founded by James Gaubert in August of 2020. James Gaubert is a designer and stylist who has worked with brands such as Chanel and Louis Vuitton. The company designs digital garments "with the aim of making clothes more inclusive, ethical, creative, and sustainable."
  • Republique enables consumers to look amazing" without leaving their homes by envisioning themselves as their own "real-life avatars."
  • Customers buy digital garments in the same manner they would buy clothing online, but with an additional step. They will be needed to upload a photograph of themselves after picking the clothing they wish to purchase.
  • Republique's 3D tailoring team then overlays the customer's image with their new digital clothing. Within 72 hours, the photograph is returned to the consumer, ready to be shared on social media.
  • Most of Republique's clients are Gen Z’ers and millennials. This is because the young generations respect their digital selves just as much as they do their physical identities.

Success Factors

  • According to KrAsia, the response to Republiqe's digital garments has been positive. The company was also able to sell more than 500 garments in the first six months.
  • Republique has also minted and auctioned off its NFTs in April 2021.

IKEA

  • IKEA is a private company that sells furniture and other accessories in more than 60 countries including Singapore.
  • The company began its digital transformation in 2017. It employs 3D modeling to help clients how to design and furnish a space within their budget. The company has a 3D model library with over 33,000 models and separate libraries for props, materials, and textures.
  • In 2021, IKEA revamped its AR offering to let users " design entire rooms using the LiDAR sensors in an iPhone."
  • The IKEA Studio app lets users capture 3D room plans complete with measurements. The app detects existing furniture and replaces them with white boxes on the plan. Users can then add furniture and additional decorations. These designs can be exported in 3D or 2D and shared with others.

Success Factors

  • The brand, like corporate giants such as Apple and Google, has a highly successful and profitable business.
  • During the COVID-19 pandemic when other retailers were struggling, the company's retail sales increased by 6.5% while online sales increased by about 50%.

Research Strategy

To provide an analysis of the digitization of the product making/manufacturing in the furniture and fashion industries, the research team reviewed various official reports and websites, interviews, industry reports, and expert blogs such as CB Insights, Furniture Today, and Janio. However, data on Singapore was limited at times. We expanded the scope to global for additional insights. Additionally, information was also somewhat limited regarding how the strengths, opportunities, weaknesses, and threats contribute to the triple bottom line and the future impacts of the identified factors.

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