#fashion | #retail
3 min read
2020 was like nothing that we have ever experienced. 100 years ago there was the Spanish flu, perhaps that was similar. With such a drastic change in habbits and behaviors, we thought it was important to dive and dissect what industry experts McKinsey, Shopify and Accenture are saying about the future of fashion.
In order to save you reading about 500 pages worth reports, we decided to summarise the important stuff.
The bad news. McKinsey predicts that revenue for the global fashion industry will retract by -27% to -30% from a year ago and profit is expected to fall by 93%. Yikes! To summarise that with a quote, "Dire consequences for fashion, one of the biggest industries in the world, generating $2.5 trillion in global annual revenues before the pandemic, entails joblessness or financial hardship for people across the value chain." (McKinkey, The State of Fashion 2021). There are a lot more stats and figures on the situation but I think the idea comes across.
Its not all bad however. Those retailers that are willing to be bold and innovative will survive and thrive in the current economic climate and beyond. Shopify reports that 49% of consumers will continue their pandemic shopping habits even after everything returns to a pre-2020 state. That means that retailers cannot wait this out but must embrace the trends that will make a difference to consumers now. Let's have a look at those trends, including some practical advice.
Trend 1: Ecommerce sales are at a record high, accelerated by the pandemic and with plenty of competition.
- 97% of economic profits in the fashion industry are earned by 20 companies. What sets them apart and how can you use it?!
- Prioritize mobile shopping experience.
Trend 2: New consumer behaviors. All purchases are moving online with a focus on convinience and speed ! Enhanced digital experiences take the center stage.
- A few unicorns are in the fahion tech but are they turning a profit? Is their solution solving the immediate problem?
- Asia-Pacific region is the fatest growing region in the world
- Demand for online tutorials rose by 65% this year.
Trend 3: Fast, free, and sustainable. Those are the differentiators for explosive growth.
- Promotion and noise take a backseat to sustainable action.
- Consumers reward sustainable fashion retailers by paying a premium.
- Convinience during the pandemic plays a key role.
Trend 4: Consumers want solutions not brands. Brand building, premium on sustainability and emersive experiences.
- Marketplaces over brands. Take your customer from a marketplace to your digital playground.
- 70% of amazon searches do not include a brand name. Consumers want a solution.
- Unlock your customers' creativity through a unique digital experience.
Trend 5: Retention! As cost of acquistion grows, brands look to get their existing customers to spend more.
- Increased industry spend on paid search, social media and connected TV advertising.
- Email is the stable channel that does not grow in cost yet achieves results!
- Target and reward your best customers.
Tons of useful info! We will break down each trend over the next few weeks. Stay tuned for more.