What is servicification and how will it change fashion?
Most major fashion brands are currently pondering one question crucial to their survival: How can we continue growing revenue while increasing sustainability?
To this end, the fashion industry is undergoing a process of servicification.
But what does servicification mean? And how will it affect the way we consume clothing?
What is servicification?
Broadly speaking, servicification means either turning something into a service or adding a service to it. This is done to create more revenue streams for the company, more value for consumers, or both.
Traditionally, it has usually involved adding services to non-service sectors of an economy or industry.
The three-sector model has long been used as a way to explain how industrial economies are structured:
- Primary sector — raw material extraction
- Secondary sector — product manufacturing
- Tertiary sector — services
Essentially, the primary sector extracts the resources (e.g. cotton) from which the secondary sector makes the products (e.g. textiles/clothing) for the tertiary sector to distribute and sell.
But what if a primary or secondary sector business takes control of their own distribution? In other words, what if they deliver their goods to the next sector themselves, instead of outsourcing to a tertiary sector business?
Then they have servicified their role in the supply chain.
Opportunities for servicification aren’t limited to extraction and/or manufacturing. Services can also be added to the products themselves, and we’re starting to see this emerge in fashion.
How are fashion products being servicified?
Sales is a service. Without sales, products lose their economic purpose. It’s possible to improve that service, and even to add more services to it (e.g. in-store style consultants), but what if you could improve a product by building services into it?
Subscription services, for example, are often built into digital products. Rather than buy a product outright, you might pay a recurring fee to access it for as long as you need to, often including upgrades to improved editions.
But how might services be built into clothes? Perhaps a fashion subscription service isn’t so far-fetched, but there are other servicified fashion products on the horizon that might not be quite as niche.
Let’s start with adding value. The most obvious example might be in the customization field, with companies such as ours enabling brands to produce clothing on demand. Here, value is created through unique and personalized products. A consumer may choose to pay a premium to change the style of collar, for example, or upgrade to a more luxurious fabric. However, given that sizing is a major pain-point for fashion consumers, they might simply want their favourite products made to their own individual body measurements.
Product servicification can generate additional revenue in other ways too. For instance, rental and resale models can effectively generate multiple sales from a single product. Many mass-market brands and retailers are already starting to consider such models as ways to increase revenue per product, especially having seen the popularity of resale platforms like DePop and Vestiaire Collective.
Finally, servicification could also play a vital role in fashion’s sustainability revolution. In-store repairs, such as those offered by Nudie Jeans, are a good example of how services can help extend a product’s lifespan, but brands also need to think about what happens at the end of that product’s life — in other words, when it’s beyond repair or resale.
Brands that take responsibility for recycling their own product, whether through in-store drop-points or pick-up services, will not only be popular with eco-conscious consumers, but also take a huge step towards circular production. To reach such an ambitious target, one of the great logistical challenges will lie in retrieving “dead” products in order to cycle them back into the supply chain.
For all these reasons, we can expect the servicification of fashion products to be the unsung hero in the fashion industry’s drive towards sustainability.
