In this post, we will analyze the landscape of the fashion industry. First, we will provide an overview of some of the most important long-term changes that have affected the fashion industry.
These are global and interconnected forces that will drive and shape trends in the years ahead.
Globalized economy
Economic growth is shifting from developed countries in the west to emerging markets in the south and east. This is because major markets in developed countries are facing stagnating sales and profitability prospects and must seek new growth outlets.
In addition, the emergence of disruptive technologies such as advanced robotics, mobile internet, advanced analytics, virtual reality and artificial intelligence are transforming entire industries.
Changes in the consumer
Digital adoption by the conventional consumer and online sales of clothing and footwear are growing rapidly. New technologies are making the consumer’s shopping process easier, more informative, more convenient and faster.
Many consumers expect perfect functionality and immediate support from brands at all times. E-commerce is growing, especially for fashion companies that aspire to provide an even more premium experience.
With information and ease of comparison, consumers are becoming less loyal to the brand and more demanding. In addition, much of the purchase decisions are influenced by social media.
Changes in the business
With the increase in online sales, companies are closing unprofitable stores and innovating their concept: making them more modern, connected and attractive to the public. Part of this innovation is due to the increase of the omnicanal integration, which seeks to offer the consumer a more consistent experience and ease of purchase between the different channels.
The creation of innovative business models based on fast fashion is revolutionizing the fashion industry. This “need for speed” is due in part to social networks that are spreading fashion trends to more consumers at a faster pace than in the past. Analyzing customer perspectives allows them to better meet needs and improve responsiveness.
The performance of technology has opened the door to the use of big data. While the benefits of leveraging data can be significant, new challenges also arise, such as protecting customer data and privacy.
Fashion industry trends
Predictable unpredictable
We are facing a world dominated by geopolitical turmoil, economic uncertainty and unpredictability. Companies in the textile sector must be aware of the changes that may affect them and be able to adapt to a constantly changing environment.
Those companies that are agile and innovative, taking into account the changes, will achieve success in the fashion industry.
Globalization restart
Despite the rise of nationalism and isolationist rhetoric, globalization will not stagnate and will continue to spread. We will face a new phase of globalization characterized by the absence of borders, connectivity and the exchange of digital data. This has improved the transparency and efficiency of global markets, reducing the costs of international communications and transactions.
This growing global connectivity is increasing the competitive intensity in the fashion industry, as it allows access to customers around the world without the need for a significant physical presence.
Asian Pioneers
In Asia, they are 2/3 of the largest online sales operators worldwide. As a result, more than half of the world’s electronic sales occur in Asia. These companies are expected to continue to gain market share and innovate.
Many Asian companies are investing in Africa to develop new garment supply centers to take advantage of the low labor cost and proximity to raw materials and consumer markets in the West.
Customization
Personalization becomes a very important factor for the client. Fashion shoppers prefer brands that are aligned with their values, demanding more and more authenticity and distinction in their garments.
Consumers are also becoming more demanding: this increases the demand for more original and exclusive items, and products with higher quality, better prices, exclusivity and authentic and attractive stories. Brands should aim to offer personalized experiences to their customers and involve influential people.
Platforms first
Consumers are increasingly relying on online platforms to conduct early searches for their fashion products, attracted by the convenience, relevance and wide variety of offerings.
These platforms will continue to grow this year, as will their use, becoming one of the most important sales channels. Brands will have no choice but to collaborate with them.
Obsessed with the mobile phone
As consumers’ obsession with mobile devices grows, smartphones are becoming an indispensable tool for online shopping. Brands must adapt to this reality and enable their portals to facilitate easy and secure sales through them.
Consumers turn to their mobile phones for information, from inspiration to price comparisons, spending an average of 6 hours per week researching fashion trends on their phones.
Artificial Intelligence becomes real
The possibilities in the fashion sector derived from the application of artificial intelligence (AI) are immense, increasing the value of companies.
The sophistication of this technology goes beyond the traditional areas and allows a new and more creative interaction between client and brand. AI provides significant speed, cost and flexibility improvements throughout the fashion supply chain.
Sustainability – Credibility
Sustainability takes on a key role in corporate social responsibility, becoming part of a comprehensive and planned system in which the circular economy, transparency and business ethics are a priority.
More and more brands are planning their production of fashion items, betting on reuse and recycling, thanks largely to the technological advances developed in recent years in this area. Sustainability is a competitive advantage for fashion companies that adopt it completely.
Discount prices
Although the luxury industry continues to grow, opportunities for other segments with a lower price range will multiply. Excess stock in a saturated market and slow economic growth are encouraging the emergence of low price fashion chains, especially in the United States, Europe and Asia.
Today’s buyers continue to demand lower prices and want a scavenger hunt experience. At the same time, discount pricing offers brands and retailers a channel to quickly eliminate excess inventory.
Entrepreneurial spirit
Due to an urgent and intense need for innovation in the industry, a growing number of fashion companies will seek to emulate the qualities of startups, such as agility, collaboration and openness.
Traditional companies will be forced to open their minds to new types of talent, new ways of working, new types of partnerships and new investment models.