As 2016 is coming to an end, the fashion industry is facing yet another year of challenges and opportunities. The Business of Fashion (BoF) and McKinsey & Company recently released its annual State of Fashion report, forecasting the macro and micro economic effects of the industry. Here is what you need to know.
The Uncertainty of the Industry
‘Uncertain, changing, and challenging’ are the three words used to sum up the industry this year. As economic and political challenges arise this has had an enormous impact on the fashion industry representing the seventh-largest economy in the world, proving just how interlinked fashion is to its environment.
2016 has shown great uncertainty in all aspects, all while the consumer behaviour has changed radically because of new technology. As the State of Fashion 2017 report states,
“Terrorist attacks in France, the Brexit vote in the UK, and the volatility of the Chinese stock market have created shocks to the global economy. Meanwhile, consumers have become more demanding, more discerning, and less predictable.“
It is predicted that the fashion industry will continue to be affected by the current uncertainty in the following year due to various factors. One factor being the generation correlation, as fashion companies should consider how to target and diversity the way they approach both retired and millennials consumers – both with very different taste and consumer behaviours.
New Trends Redefining the Industry
The uncertainty on the Chinese market remains, though China’s growing middle and upper classes remain strong, which could lead to a possible comeback of Chinese consumers. WGSN recently published the report Brands to Watch – China Contemporary S/S 17 - a list of talented, emerging Chinese designers, and their mark on the global fashion industry. It will be interesting to see how Asian countries, as China and South Korea, enters the Ready to Wear market and the influence it will have on domestic consumers – not to mention, Western.
Technology is also a huge factor and will continue to be, as digitisation is the key to supply-chain efficiency. The ‘See Now, Buy Now’ concept premiered in 2016, and disrupts the fashion cycle completely. Immediacy and digital innovations are the keys to a successful fashion business today, which many brands have not managed to perform efficiently yet.
Jonathan Chippindale, the co-founder of Holition, an augmented relation solutions consultancy, came to speak at Condé Nast College about technology in retail, said:
"Stores should be celebrating the physical environment, instead of putting an iPad in your hand, giving you the same decision process that you could be experiencing on a park bench."
Chippindale also mentioned, that innovative products created to change people’s behaviour are exciting to look at, yet the most difficult ones to perform, because of consumer’s buying behaviour. Technological products that relate to climate change and air pollution are not only relevant for our time, but for the environmental Millennial generation.
It will be interesting to see how the industry develops next year regarding its technology and new emerging Asian designers on the market.
Read the full Business of Fashion The State of Fashion 2017 report here.