CFO World

Getting under the cloak of Woolmark's digital and innovation efforts

Global head of digital and innovation talks to CMO about how AI is informing fashion tech development, retail's evolution, plus the impact of voice and connected devices on fashion and customer engagement


AI-powered research, voice-based care instructions, ‘adjacent possible’ marketing principles, augmented reality on farms and eco-storytelling in immersive retail stores – they’re all in a day’s work for the innovation and digital team at The Woolmark Company.

Global head of digital and innovation, Damian Madden, recently caught up with CMO to share ways he’s fostering innovation, from the technologies being tapped into, to the cultural and mindset shifts required as the marketing body for Australia’s woolgrowers works to change how people perceive wool.

Madden will speak about artificial intelligence (AI) and the role of innovation in Woolmark’s unique form of “ingredient marketing” at the ADMA Global Forum in Sydney later this month.

“There is a large traditional and steady growth portion to our market that will always be there in terms of fashion, such as jumpers and suits. But what we want to drive is more growth and opportunity for wool and we find we achieve that through innovation,” Madden told CMO.  

“That’s about finding ways to innovate in terms of the fibre, through new wools or new ways to produce wool, right back to the farm level. This could be helping farmers manage the farms, animals or shearers, through to processing, such as new ways to create and spin wool. Then it’s about new forms of marketing; working with brands in interesting ways to create new uses for wool.”

Efforts are also increasingly tying into new ways consumers shop in mixed digital and physical retail environments, as well as how they engage with brands and garment care via connected devices and the home.

Fashion tech and AI

To help, Woolmark has been investing in AI research to better understand the position and needs consumers have around emerging fashion tech. Madden described fashion tech as the gamut of smart textiles, smart farming, home automation, the care piece around goods, AI reporting and even virtual reality.

“A key thing is reshaping and rethinking how we look at fashion tech. It’s not about machines getting smarter, it’s about making us smarter,” he said. “We use a lot of AI research and find it really valuable because it gives us insights we couldn’t get from focus groups. It identifies customers, products, opportunities and allows us to test how we’re marketing, how we’re presenting and using what terms.”  

One initiative has been tapping insight around the purchase funnel. What’s clear, according to Madden, is the traditional marketing funnel and linear approach to customer insight and engagement no longer works as customers split their journey between funnels.

“If I’m a fashion brand, I’ll do all this awareness campaign work to bring people in to find out about a new collection I’ve got. However, when those people get to the point where they want an item, they’ll go to an online retailer and complete this part of the purchase in their funnel. Once they have the product at home, they come back into my [fashion brand] funnel in terms of care and use,” he said. “Often as Woolmark, we miss the inbetween information. What we’re doing is using AI to fill that gap and get insight into what that customer journey looks like.”

Woolmark is also looking to AI research to understand if colour is the top key consideration, versus price point, size, or the way products are presented in-store. “When we’re talking about wool, we can see what people are aware of before they even know what they want,” Madden continued.

“We know ‘merino’ has a much stronger emotional affect than wool. So if we talk about merino denim, instead of merino wool, the change in customer perception is dramatic. And we can feed that straight back into our partners.”

Related: CMO interview: Marketing the wool off a sheep’s back

As an example, Madden pointed to AI insights informing Woolmark’s partnership with a US activewear brand by identifying opportunities where wool could fill clothing gaps in specific sports and meet the needs of participants better. Another example is research into the US outdoor hunting sector. In this instance, Woolmark found a groundswell of hunters talking about the benefits of wool as a natural fibre.

“We try and find opportunities to then innovate in those spaces so it amplifies the technology they’re after. That opens up new wools and markets for us,” Madden said.  

A big area of fashion Woolmark is focused on is sneakers. “People are much more willing to innovate and experiment with innovation in their sneakers as consumers, and that’s the place to play in,” Madden said.

It’s these insights that triggered Woolmark’s work with Adidas and saw it developing different knitting techniques and fibres to create new sneaker types.

Omni-channel retailing

Outside of working with fashion brands, retail is another important customer base for Woolmark and a big area of innovation. Madden said his group and partners are working to bring customers into the start of the innovation and product development process to create a continuous loop.

“This is a big change in fashion, which is traditionally led by a creative. AI looks to the market to a degree, but it’s also about reorienting around what a customer wants in the product then infusing products with that insight,” he said.

When it comes to omni-channel retailing, there are a number of AI-informed and tech-driven projects in the works, too. These largely focus on education of consumers on the story behind wool and post-purchase care.

“If I get into a completely connected environment – that new retail store of the future – how am I going to tell someone this wool-based garment is better than the other one? That’s our challenge and a lot of our projects are driving back to that,” Madden said.

Several projects, for instance, focus on evolving technology in the tag itself. “It’s our opportunity to talk to you. But also in that retail environment, how do I connect up with you?” Madden asked. “Are there learnings we can apply from the online world, such as customised experiences based on previous buying patterns, in a physical environment? Can I change tags, prices and retail displays based on the person in front of them?” 

Another area Woolmark is investigating in the activewear space is interactive retail design.

“If I stand in front of a screen in a store, and everyone is giving off data. What data could then influence the display I’m seeing? Is it my fitbit, phone, my connected jacket? If I know you do X or Y, then I can show you what you should be wearing. And that’s when I can also tell the wool story,” Madden said.

With next-generation consumers applying what they do online to the physical store environment, Madden claimed retail is on the cusp of further transformation.

“These consumers are more interested in the information behind those visual designs and products. But while online you can scan and see data presented, it’s not the same in the physical retail environment,” he said.  

“What we also know is marketing today is about bonding, not branding. This comes back to that retail piece too. Customers aren’t stepping into that brand’s world anymore. It’s more around wanting a piece because it says something about who I am.”

What’s more, the next generation of consumers want to hear the eco story – a key selling point for wool.

“We did a comparison of fibres through the AI software of 10 different fibres and the natural fibres came out 1-5 in terms of decision factors people buy with. That next generation of buyers are already seeking out those natural fibres,” Madden said.

“We need to double down on the education piece of what you do when you’ve got it, but also beforehand, why it’s beneficial, the story behind it, and what benefits it supplies to the activity you’re trying to do.”

Up next: What it takes to change business perceptions around innovation

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Changing business perceptions

Whether it’s in retail, the product or on a farm, true innovation means changing perceptions internally and fostering a strong appetite for risk, Madden continued.

“True innovation is a mindset: You need to be able to be much more open, and it’s much riskier,” he said. “Too often, people are so focused on not failing, they don’t focus on succeeding. That’s been a key shift for my team as we looked to embed a culture of innovation.”  

A principle Woolmark is embracing around marketing to help innovation is the ‘adjacent possible’, a complexity theory. This is about stepping away from a linear-based approach to achieving innovation or a business goal, and embracing different branches of activity, teams and adjacencies.

“The idea with an adjacent possible approach is you have to shift the mindset to embrace these elements spinning away and realise they’re all working towards getting to the larger goal, even if they’re working over in another branch or adjacent area,” Madden explained.  

In the case of sneaker innovation, for instance, Woolmark had one team working on the technology to knit, then another on blending fibres.

“One team was talking about the ways the knitting was possible; as soon as that happened, they were talking to another branch, which said this fibre would work perfectly, and we started joining up the dots,” Madden said.  

Another area this ‘adjacent possible’ approach is helping is with utilising voice-activated devices to improve product care information delivery.

“I could send a team off to look at how people could voice for care instructions. But there are other elements too, such as a connected home. How do I work in that connected home environment, in and out of their wardrobe? Are there wardrobes, laundries, and how do I engage with people in those spaces?” Madden asked. “So I split the teams off. One is looking at the fundamentals of how we can get care instructions into the voice channel. You can now ask Google Home how to wash your garments and it’ll give you an answer.

“But for someone focusing on what a smart wardrobe looks like, there’s so many other ways to think and partner. For example, we are working with a company in HK that takes your delicate garments and stores them in an eco-sensitive environment. On your app, you just order what you want to wear tomorrow and it comes back to you.

“That’s another branch [of innovation] and if you can start looking at how to link those, you’re opening up a completely different avenue for garment care.”

This branched innovation approach requires executives to constantly remind their teams of what the key business goals are, Madden said. It’s also about reassessing against wider business goals. For Woolmark, these key outcomes include whether projects will benefit wool growers, educate customers, and open up opportunities for wool sales.

“We watch the price of wool as a key metric. So we tied back the price to the use of wool in sneakers, for example. That was the result of 6-7 streams of work,” Madden said. “If you looked at the ROI on each of those, some were more apparent than others. But if you tied them all back to the overall piece of work… we’ve produced an innovative garment and we can see the associated benefits of it.”

Woolmark’s in-house development team is also working on smart farming technologies, such as wearables on animals, plus augmented reality.

“By opening it up and making sure everyone understands the broad-level goals we’re defining, you foster better innovation,” Madden said. “So if you know the smart tags link up to some kind of automation, and to voice so a farmer can open and shut gates, you better understand how smart farming shapes the future.”

Madden agreed having a remit across both digital and innovation has helped foster a strategic innovation mindset at Woolmark. Embedding his team across marketing, trade and fabric-based innovation and down to the farm level has been another big win.

In addition, digital and innovation increasingly act as a centralised support function for global teams, a structure Madden said better empowers satellite offices to find partners and opportunities in their respective markets.

“Coming back to the voice example, we have chatbots in Korea, a consumer-facing care campaign, tickets and labels, our relationship with washing machine manufacturers, and new types of wool we’re communicating to partners about. That represents 4-5 different teams that previously necessarily wouldn’t have worked together.”

Check out more of our reporting on how to foster innovative thinking in your organisation:

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