Since the turn of the century, digital innovation has precipitated a significant shift towards consumer -centric business models, creating more demanding customers and increasing competition in the sector. Furthermore, amid the pandemic, the fashion industry has be¬¬¬¬en severely impacted. There has been a massive alteration in consumer behaviour, which businesses have res¬¬¬ponded to by utilising innovative in-store and online technologies to provide a better customer experience to meet customer demand, acquire new consumers, and increase sales.
The introduction of Industry 4.0 in the fashion industry has transformed the dynamics of fashion retailing. Emerging technologies such as the Internet of Things, Artificial Intelligence and Augmented Reality can create an immersive customer experience that influences the consumers' intellectual and affective purchasing behaviour, maximising customer satisfaction and brand loyalty. Meanwhile, innovative technology allows retailers to provide a seamless multi-dimensional experience in online and brick-and-mortar retail environments by unifying multiple customer touchpoints.
Technology is now one of the most critical determinants of purchase behaviour. The innovative Combination of the physical and virtual world has certainly grabbed lots of attention in the fashion industry. For e.g., Digital clothing is getting very popular; luxury brands like Louis Vuitton are introducing digital wardrobes.
This ‘phygital’ association between in-store experiments and enhancing purchase behaviour.
These technological changes can be a boon for fashion brands but implementing such infrastructure requires enormous capital and securing the considerable funding can be very difficult for many growing brands.
How to secure additional funding?
The UK government provides support to companies developing products, materials and methods such as new methods of garment construction. These methods don't need to be new technology; they can even be an innovative product or service even if it's been developed by another company but is not publicly known or available.
So, what does it mean for the fashion business?
Most fashion brands are unaware or underestimate whether they would qualify for such claims. Yet, the fashion and luxury goods sector routinely breaks new ground in innovative garment construction, textile manufacturing and production methods which involves overcoming technical challenges. These methods don't need to be a scientific innovation, routine tasks performed on a daily basis can be claimed under the R&D tax scheme.
How can a business claim these credits?
Every year, tax credits can be claimed by submitting a report outlining qualifying activity alongside the business’s corporate tax return (CT600), or, if a company is claiming for the first time, it can be two financial years. However, despite the availability of these tax credits, the claiming process can be tedious as the company needs to adhere to strict guidelines set out in the tax code.
How does Invennt expedite the process for these brands?
Unlike other tax credits, the R&D scheme requires significant technical knowledge as well as tax and accounting expertise to compile and formulate a compliant claim, which is why Invennt employ experts with specialist knowledge in the field. Furthermore our approach is consciously informal and exploratory using a streamlined four-step process. This helps our team to unlock innovation that businesses didn’t know existed and ensure that brands receive every penny they are owed.
Written by Ankita Lakhotia