What are the key issues moving the industry at present? What will be important for business next year? How will the changes in the world economy affect the fashion industry? Online news magazine The Business of Fashion and consulting group McKinsey & Company are offering an informative outlook for the coming year for the fourth year in a row with their “The State of Fashion 2020” report.
Brexit, trade wars and political unrest. Fashion managers are looking to 2020 anxiously. According to the McKinsey Global Fashion Index (MGFI), sales will continue to grow in the fashion business in 2020, but growth will be slow to 3 to 4%, slightly less than predicted for 2019. “The coming year will be tough, and for some it will be significantly more challenging than for others. Indeed, the year ahead will require fashion companies to deliver meaningful change across the value chain and on multiple fronts while mitigating risk and managing uncertainty,” says Imran Amed, founder and managing director of The Business of Fashion and one of the authors of the report.
There are two sides to the coin. Survey participants stated that they expected sustainability to be both the biggest challenge and the biggest chance for the fashion industry in 2020. Despite some modest progress, the fashion business has not been taking their responsibility for the environment seriously enough, the majority believes. According to the report, customers not only expect companies to take active measures to protect the environment, they also localised brick-and-mortar experiences and products that differ from those found on the main shopping streets. Fashion players should also keep in mind social media channels and functions. While digital pure players have undertaken pioneering work in the field of new business models, also exhibition spaces and trade shows need to be reinvented in times of progressing digitalisation within the entire industry.
The race to catch up continues. The challenges digitalisation and sustainability set will become even more complex, the experts predict. Yet, while the coming year brings with it a lot of uncertainty, exciting opportunities remain for those who can make sense of the noise and drive innovation accordingly. Crucially, what is required are leaders able to make quick decisions.
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Report: The State of Fashion 2020
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