The Effects of COVID-19 on the Adoption of “On-the-Shelf Technologies”: Virtual Dressing Room Software and the Expected Rise of Third-Party Reverse-Logistics

The fashion industry is adapting to the new situation caused by the COVID-19 pandemic by changing the structure of its supply chain, much like other industries that experience exogenous shocks. The pandemic affected conditions of apparel retailers: downstream among consumers and upstream among suppliers. It induced retailers to accelerate the adoption of technologies to make their supply chains more flexible and resilient. Before COVID-19, the apparel industry had gradually adopted virtual dressing room (VDR) technologies and crowd wisdom software, both of which reduce the risk associated with online purchases. Apparel retailers also altered the structure of their supply chains by outsourcing product turns via third-party logistics providers. This article analyzes how changes in market demand and supply conditions following the outbreak of COVID-19 accelerated the adoption of VDR technologies. The analysis is based on a conceptual microeconomic model of adopting technologies and changes in the supply chain. We support our theoretical findings with business cases. Understanding the nonlinear relationships among changes in demand, supply chains, and retail technology adoption triggered by exogenous shocks is essential for managers and affects the quality of service.