Ever since Shein became the world’s most popular online shopping destination, influencers have been posting “haul” videos on social media to show off their purchases, and how they’re transporting their vast array of products. There are questions as to whether they are still being produced. Dizzying speed. The answer: AI-powered algorithms enable companies to understand changes in customer demand and interests and adjust their supply chains in real time. As a result, Shein reportedly has 600,000 products listed on its online platform at any given time, selling to customers in more than 220 countries and territories around the world.
But the company has also long come under scrutiny for its poor track record on environmental sustainability, and will be fashion’s biggest polluter by 2023. Factory workers at manufacturing plants in southern China have reported grueling 75-hour shifts, and supply chain investigations have uncovered serious labor rights violations. It will take several weeks to meet demand.
Schein argues that AI is also the answer to solving these problems. At a retail conference in Berlin in January, Peter Pernot-Day, head of global strategy and corporate affairs at Shein, said that more than 5,000 Shein suppliers have recently started using AI to analyze customer preferences. With access to a software platform, the company said it used that information to analyze customer preferences. We produce small quantities of products according to supply in real time. “We use machine learning technology to accurately predict demand in what we believe to be state-of-the-art,” Peter Pernot-Day said. “The net effect of this is to reduce inventory waste.”
Shein is not the only fast fashion company touting the benefits of AI in transforming fast fashion businesses. Many of its competitors, such as H&M and Zara, are also turning to machine learning technology to analyze sales data and understand customer demand by predicting trends, tracking inventory levels, and reducing operational costs. Retail experts are similarly optimistic about the power of generative AI. A recent McKinsey report suggests that AI could increase operating profits by up to $275 billion in the apparel, fashion, and luxury goods sectors over the next three to five years.
“We are already seeing major changes in fast fashion with the use of GenAI,” said Holger Haleis, senior partner at McKinsey and co-author of the report. In the long term, Harrys said, this could make the fashion process more personalized, with “everything down to a semi-customized level of color, style and size, all enabled by genAI-driven processes. “There could be human intervention to focus where the emphasis is.” Humans add the most value. ”
But as Shein leverages AI to optimize its supply chain, environmental experts question whether these claimed efficiencies really improve outcomes. Lewis Perkins, president of the Apparel Impact Institute, a global nonprofit organization that measures the fashion industry’s climate impact, said: “There is a lack of strong ethical, social and environmental standards in place. , AI could easily encourage faster production and overconsumption.”
Companies pledge to reduce waste as consumption soars
Fast fashion is the world’s second-largest industrial polluter, emitting 1.2 billion tonnes of carbon dioxide each year, accounting for 10% of global carbon emissions, according to a study by the European Environment Agency. But no company has emitted as much in recent years as Shein. The company’s 2023 sustainability report recorded carbon dioxide emissions of 16.7 million tonnes last year, almost three times the emissions generated in the previous three years. Shein’s record has soared past even Zara, previously fashion’s biggest emitter, and is almost double that of companies such as Nike, H&M and LVMH.
Founded in 2008 by Chinese billionaire Sky Xu, Shein became the go-to destination for online shopping during the pandemic after listing around 600,000 items on its marketplace. According to EMARKETER research, Shein will account for 50% of fast fashion sales in the U.S. by November 2022. According to EMARKETER research, one in four Gen Z consumers now shop at Shein. 44% say they purchase Shein at least once a month. Shein reports that 61% of carbon emissions come from the supply chain and 38% from transporting goods from facilities to customers. In July alone, Shein airlifted approximately 900,000 packages to customers.
The sustainability report also highlighted how the company plans to reduce emissions. This includes moving production closer to customers, launching a $222 million circular fund to accelerate fiber-to-textile recycling, and setting a goal of reducing emissions by 25% by 2030. Includes setting. Mr. Shain did not respond to Time’s request for comment, but a spokesperson said: That’s because the company recently told Grist that it is increasing inventory in its U.S. warehouses and using cargo ships to deliver to customers. The company also reiterated that AI will further help reduce waste, insisting that it “does not believe that growth is the opposite of sustainability.”
Read more: Shein is the world’s most popular fashion brand and the cost is great for all of us
There is new research that may support these claims. A study by the NSW Climate Risk and Response Institute found that businesses can use AI-powered technology to combat climate change, analyze their carbon footprint and devise strategies for improvement.
“In short, AI will improve a company’s entire value chain in ways that help companies avoid, reduce, or offset the environmental impact of their products, services, and processes,” says my colleague Sha. said Harrier and study co-author David Grant. actor. Grant added that many of these tasks can be performed much faster and more accurately with AI than with humans. “The benefits to the environment are far greater than would be achieved otherwise, especially with regard to climate change,” he says.
But still, the study’s authors warned of the risks AI poses to fast fashion supply chains, particularly through “vicious cycles of overconsumption, pollution, and exploitation,” pointing to Shein’s ability to predict demand and produce clothing. Akhter said. Producing clothing in large quantities at “ultra-fast” speeds will put additional strain on factory workers.
Algorithms utilize copyrighted works
Generative AI risks extend beyond the supply chain. UNSW’s Akhtar added that the technology could also infringe on copyright and undermine the artistic quality of human creativity.
In April, Alan Gianna, a Connecticut-based artist and designer, sued Shayne in the Southern District of New York, alleging that the company’s use of AI, machine learning, and algorithms systematically infringed his copyrights. filed a lawsuit against. The complaint cites the artwork “Coastal Escape” that was posted on Shein’s website without permission or attribution, and uses a sophisticated electronic system that “algorithmically searches the Internet for the artist’s popular works.” It alleges that “widespread copyright infringement is built into this business.” It also said the breach likely affected “thousands or even tens of thousands of people” in the United States.
Mr. Schein has faced dozens of similar lawsuits alleging design theft in the past. In July 2023, three Chinese graphic designers sued Shein, accusing them of using “secret algorithms” to identify trends and copy their designs. The complaint goes so far as to say that the company’s copyright infringement is so aggressive that it amounts to “extortion.” In response, Shein told NBC that he takes all claims of infringement “seriously” and added, “When a complaint is brought by a legitimate intellectual property owner, we act quickly. ” he said.
NSW’s Akhtar said AI-based generative design “could lead to copyright infringement and put businesses in questionable situations”, urging fashion companies to rely on similar algorithms, saying: He added that this could lead to an “algorithmic monoculture.” You lose the creativity needed in fashion retail. It also says that AI-based marketing models can introduce algorithmic biases that extend to race, gender, sexual orientation, social class, religion, and ethnicity.
But despite these risks, many brands are investing significant budgets into AI. McKinsey’s Harais is optimistic about the company’s ability to optimize production and reduce waste, but added that companies still face major challenges. “For technology to add value, companies need to realize that it’s not just about technology, it’s about rewiring the entire organization,” he says.
The Apparel Impact Institute’s Perkins said AI can help bring about systemic changes in design, production and consumption, but that it will be driven by “responsible business practices, transparent supply chains, and reducing overall impact.” only when combined with initiatives.” It’s not impossible to imagine what this would be like. Perkins points to innovators like Made2Flow, which uses AI-driven data analytics to measure and optimize environmental impact across the fashion supply chain. Similarly, Smartex.Ai leverages AI to detect and reduce fabric defects and reduce material waste.
But if AI is used solely to speed up production and bring more products to market, Perkins warns that it could “fuel overconsumption.” “Until we see clear evidence that AI is being used to truly reduce the fashion industry’s environmental footprint, I remain cautious about how much of a positive impact this model actually has.” he says.
