The recent State of Fashion 2018 report, in association with Business of Fashion and McKinsey, is now in its second year and provides a comprehensive view of the fashion industry’s current and projected performance.
Below are the 10 trends that they believe will set the agenda for the industry over the next 12 months:
- Continuing uncertainty…
Persisting geopolitical and economic uncertainty means the world in 2018 remains unpredictable. The fashion industry needs to continue being alert and adapting to new realities amidst an ever-changing environment. However, it will begin to focus more and more on trying to influence what it can actually control.
2. …but continuing connectivity too
Globalisation will not stall, despite the rise of nationalism, isolationist rhetoric and protectionism. Digital trends will develop a new phase of globalisation, altering the global playing field and giving a competitive edge to those who successfully harness it.
3. The Far East powerhouse
Asia continues to dominate as an economic powerhouse. It houses more than half of all online retail sales and two thirds of all start-ups valued at over $1bn, alongside myriad digital and tech innovations. With pioneering innovations and global expansion, Asian business will go from strength to strength.
4. Personalisation and curation
Authenticity and individuality are becoming increasingly important to consumers and brands need to reflect this by tailoring recommendations and personalising experiences. Successful fashion brands will thrive by embracing this concept.
5. Online platforms
Premium, specialist and mass platforms will become increasingly powerful sales channels. Fashion brands will recognize that they need to find ways to work increasingly closely with them to grow in scale and reach. Customers are relying more and more on these platforms as their first point of search, attracted by their convenience, relevance and range of offering.
6. The smartphone love affair continues
Brand will develop their mobile strategy: according to a recent BCG / Altagamma study, 55% of luxury consumers buying online use their mobile phones versus personal computers. With so many mobile payment solutions already available, consumers will expect fashion companies to harness these to allow increasingly convenient end-to-end mobile transactions.
7. Artificial Intelligence
2018 will be the year in which the fashion industry will explore new ways of harnessing AI. The line between technology and creativity will be increasingly blurred as they go beyond the traditional areas of machine tasks into more creative and customer interaction processes.
8. Ushering in the circular economy
The focus on sustainability will shift from being an outwardly-focussed CSR ‘tick box’ activity to a more integral part of the planning system, where circular economy principles are incorporated within the value chain. Brands will innovate to become more sustainable, putting together recyclability plans, unlocking efficiency and improving transparency in order to upgrade their ethical status.
9. Thinking again about off-price retail
Figures suggest that Europe and Asia still view the off-price channel as an effective method of dispatching excess stock and boosting slow growth. However, the US market is showing the negatives of relying on cut-price retailers with evidence of market saturation and possible sales cannibalisation. Fashion companies should carefully consider their strategies in this sector in order to avoid the risk of margin erosion.
10. Thinking like a start-up
Across all sectors it is recognized that to maintain a competitive advantage, companies should learn lessons, such as agility, collaboration and openness, from successful start-up companies. Traditional 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.
The State of Fashion 2018 – read the full report here