According to McKinsey, during 2022, the fashion industry will have the capacity to return to growth as changing category landscapes, discovering new digital frontiers, and emerging in advances in sustainability that continue to present opportunities for fashion businesses.
After almost two years of disruption, fashion businesses are once again finding hope, and companies are adapting to new consumer behaviors. The digital is providing a hope, and anchor for growth. Still, the industry faces significant challenges regarding supply-chain disruption, patchy demand, and persistent pressure on the bottom line. We are certain that growth will be a key priority in the year ahead, since many companies are struggling in obtaining profit.
McKinsey & Company kick off ten key themes for the year 2022 having in mind the complex impacts of the pandemic as it continues its unpredictable progress. Between all these challenges and changing dynamics, it is imperative for brands to be secure of their recovery. At the same time, brands and fashion business should be capable to adapt to the evolving consumer demand. And, of course ensure that they don’t ignore the opportunities that the digital world has to offer day after day.
As sustainability becomes, more and more, an urgent concern for people in general, but specially for brands that operate in the fashion industry, they need to maximize their efforts in a way that it reflects the customer values, and concerns about the future of our world. Finally, regarding rising competition for talent, fashion business also need to find new ways to attract the best professionals and softwares to cybersecurity.
Top 10 Themes:
The world is recovering from Covid-19, which makes the consumers market ver unstable, in this environment fashion players with international footprints will need to be very careful and precise on their investments.
The fashion industry is integrated in a global supply chain which is at this time under unprecedented pressure. Problems with logistics, shipping costs and shortage of many kinds are rising. This process will have to be rethought in order to keep products following customers demand.
Luxury players are very dependent of international turism. However, this industry will only recover in 2023/2024, so they should engage more with domestic consumers and their e-commerce channels.
After buying lots of loungewear and sportswear during the pandemic, consumers will shift and prefer more sophisticated and fancy outfits. So, to follow these new consumers lifestyle, brands should adjust their inventory mix accordingly and develop data-driven products.
As consumers spend more time online, the metaverse hype grows each day, specially in the young crowd. Brands should take this opportunity to explore NFT’s, gaming, and virtual fashion.
Social Commerce experiences are exploding nowadays. Brands, consumers and investors should have in mind that these type of channels unlocks many opportunities regarding perfect shopping experience, from the discover of the product to the checkout. So, fashion businesses should double-down on technologies such as livestreaming and augmented reality.
Circular textiles is one of the most promising levers of the fashion businesses. Closed loop recycling will reduce environmental impacts. This system will limit the extracted production of virgin raw materials and decrease the wasting of textiles. As these technologies evolve, companies will need to invest in the design phase of product development, while adopting large scale collection and sorting process.
Brands are starting to use Product Passports to store and share product information with both consumers and partners, in order to tackle counterfeiting. This will boost brands authentication, transparency and of course, sustainability.
Unfortunately, cyberattacks are increasing, as the digitalization of fashion businesses reaches new heights. And companies are facing more threats of cyberattacks. So, brands need to act urgently to shore up their defenses and invest more to make digital security a strategic imperative.
As professionals and employees from upper management to the retail front line reconsider their priorities, companies must refresh their talent strategies for an increasingly flexible, diverse and digitized workplace.
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