(Source: Retail in Asia | January 4, 2018)
Drawing on the macro-categories of global economy, consumer shifts, and changes in the fashion system, the BoF and McKinsey & Company’s The State of Fashion 2018 report defines the ten trends to watch in 2018.
1. Predictably unpredictable
Geopolitical turmoil, economic uncertainty and unpredictability are the new normal. Fashion companies and executives must continue to be vigilant and nimble in order to adapt to an ever-changing environment but they will increasingly focus on directing their energies towards what is within their control.
2. Globalization reboot
Despite the rise of nationalism, isolationist rhetoric and reshoring, globalization will not stall. A new phase of globalisation characterised by the exponential growth of cross-border bandwidth, connectivity and digital data flows will alter the global playing field and give certain players a competitive edge.
3. Asian trailblazers
With two thirds of the world’s e-commerce unicorns, more than half of global online retail sales, and countless digital and tech innovations, Asia is no longer waiting for Western companies to step up. Asian players will assert their power and leadership even more through pioneering innovations and global-scale investment and expansion.
4. Getting personal
Personalisation and curation will become more important to the customer. As consumer values coalesce around authenticity and individuality, brands will value data even more to tailor recommendations, engage influencers and personalise experiences. The fashion companies that flourish will re-focus on their strengths.
5. Platforms first
Consumers will increasingly look to online platforms as the first point of search, attracted by their convenience, relevance and breadth of offering. Whether mass, specialist or premium, platforms will continue to grow in scale and reach compelling fashion brands to find ways of engaging more with these powerful sales channels. The question for fashion brands is no longer “if” but “how” to collaborate with big online platforms.
6. Mobile obsessed
As consumers’ obsession with mobile grows, the end-to-end transaction will also move to mobile. With an overabundance of mobile payment solutions already available globally, consumers will expect fashion companies to cater for increasingly convenient mobile transactions.
7. AI gets real
Leading innovators will reveal the possibilities of artificial intelligence across all parts of the fashion value chain, exploring new ways of creating value for those employed in the fashion industry. AI enhancements will go beyond the traditional areas of machine tasks into creative and customer interaction processes, blurring the line between technology and creativity.
8. Sustainability credibility
Sustainability will evolve from being a menu of marketing-focused CSR initiatives to an integral part of the planning system where circular economy principles are embedded throughout the value chain. More fashion brands will plan for recyclability from the fibre stage of the supply chain and many will harness sustainability through tech innovation in order to unlock efficiency, transparency, mission orientation and genuine ethical upgrades.
9. Off-price deception
Off-price sector growth continues to be driven by the notion that it provides a solution to challenges like excess stock and slow growth, but the US market serves as a warning about saturation and possible sales cannibalization. As Europe and Asia get hooked on the myth of an off-price ‘panacea,’ the fashion industry could be put at risk of margin erosion unless companies carefully consider their off-price channel strategies.
10. Startup thinking
Due to an urgent and intense need for innovation across the industry, a growing number of fashion companies will aim to emulate the qualities of startups such as agility, collaboration and openness. Traditional and heritage players will continue to be compelled to open their minds up to new types of talent, new ways of working, new kinds of partnerships and new investment models.
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