Cover Story
Ten trends for the fashion
industry to watch in 2019
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By Imran Amed, Anita Balchandani, Marco Beltrami, Achim Berg, Saskia Hedrich, and Felix Rölkens
As our trends indicate, new markets, new
technologies, and shifting consumer needs
present opportunities but also risks. We
predict that 2019 will be a year shaped
by consumer shifts linked to technology,
social causes, and trust issues alongside
the potential disruption from geopolitical
and macroeconomic events. Only those
brands that accurately reflect the zeitgeist
or have the courage to self-disrupt will
emerge as winners.
1. Caution ahead
While 2018 was characterized by cautious optimism
in the face of uncertainty, this year, various indicators
point to clouds on the horizon that could somewhat
dampen global economic-growth prospects.
As the macroeconomic landscape shifts, we expect
companies will seek to protect themselves from slower
growth by implementing “shockproofing” measures.
These will primarily be aimed at boosting productivity
through greater efficiency and cutting costs. To ensure
these interventions deliver sustainable benefits over
the longer term, fashion players should seek to couple
productivity enhancements with necessary innovation
efforts, such as the automation of production, analytics-
driven decision making, a review of the omnichannel
footprint, and reorganization for greater agility.
2. Indian ascent
India is increasingly a focal point for the fashion
industry, reflecting a rapidly growing middle class and
increasingly powerful manufacturing sector. These,
together with strong economic fundamentals and
growing tech savvy, make India too important for
international brands to ignore.
India is predicted to grow 8% a year between 2018 and
2022. The Indian middle class is forecast to expand
at 1.4% a year over the same period, outpacing Brazil,
China, and Mexico. As a result, India is set to move from
being an increasingly important sourcing hub to being
one of the most attractive consumer markets outside
the Western world.
3. Trade 2.0
Escalating trade tensions will see international
brands look closely at sourcing, perhaps to the benefit
of countries involved in newly negotiated trade
agreements. A further increase in south–south trade,
especially between emerging Asia–Pacific countries, is
likely. Fast fashion, which depends on short lead times,
will need to find new strategies to maintain delivery
speed and production quality—for example, through
nearshoring or even on-shoring. Still, tough commercial
decisions will be required in the face of tariffs in key
consumer markets. Luxury players, especially those that
derive most of their income from China or the United
States, may be required to choose between raising
prices and managing squeezed margins.
4. End of ownership
In fashion, the shift to new ownership models is driven
by growing consumer desire for variety, sustainability,
and affordability, and sources suggest that the resale
market, for instance, could be bigger than fast fashion
within ten years.
We expect 2019 will be known for three developments:
First, the number of brands getting into the rental,
resale, and refurbishment business will increase
markedly. Second, we predict a notable increase in the
number of rental-native brands born exclusively for
rental or subscription models. Finally, more consumers
will see a growing proportion of their wardrobes made
up of preowned or rented products, especially for high-
value items and accessories.
5. Getting ‘woke’
Younger consumers are seriously concerned with social
and environmental causes, which many regard as the
defining issues of our time. They increasingly back their
beliefs with their shopping habits, favoring brands that
are aligned with their values and avoiding those that
aren’t.
Brands are responding by integrating social and
environmental themes into their products and services.
The benefits of these policies are clear, but as the
causes that some brands champion venture into
controversial territory, there are risks and consequences
for those that fail to get it right.
6. Now or never
The consumer psyche is changing fast. Technology
leaders such as Amazon, Deliveroo, Netflix, and Uber
have raised customer expectations for speed and
convenience. The implications of these new technologies
are considerable and will lead to both defensive and
offensive plays. On the defensive side, in 2019, we
expect the majority of fashion players will integrate
commerce functionality into social media, enabling
direct-to-product journeys.
They will also likely continue to invest in improving
mobile conversion rates, streamlining the checkout
process, improving search, and optimizing the user
experience. Offensively, we expect brands and retailers
to collaborate increasingly with technology companies to
develop proprietary tools, such as visual-search engines.
7. Radical transparency
Given consumer demands for greater transparency
through the value chain, we see three key dynamics in
the coming period. First, players will rigorously audit
their business practices to identify potential areas that
may erode consumer trust. The lens for this analysis
could be, “What would my customers think if this was
on the front page of a newspaper?” Brands will invest to
address any problem areas and will highlight their best
practices to create a competitive edge. Some will use
new technologies such as blockchain, in which each node
of the network sees the whole history of transactions.
Second, we expect more rigorous reporting of social and
environmental impact. Finally, brands are likely to be
more transparent in the event of a crisis and respond
more quickly, admit when they are at fault more often,
and be willing to apologize.
8. Self-disrupt
Looking forward, we see three key disruptive
developments. To compete with “challenger” brands,
established brands will continue to innovate, leveraging
their scale to fast-track capability building. The latter
will help companies remain at the forefront of business-
model innovation and respond to new fashion trends
more quickly. It will be increasingly important to adopt
agile ways of working and depart from the traditional
operating model. Players will also work to streamline
supply chains, enabling faster time to market. In
an increasingly fickle fashion environment, market
leaders will also need to take more risks to stay ahead.
Sublabels will continue to proliferate, allowing brands
to experiment while maintaining the authenticity of the
parent brand.
9. Digital land grab
This year, we are likely to see an accelerated emergence
of ecosystems of related and overlapping businesses.
There will likely be an intensified race for pole position,
with the largest players battling to become the go-to
platform for consumers and brands. The holy grail of the
industry will be integration of value-added services that
remove friction in the consumer and supplier journey
through effective use of data analytics at scale. This
could lead to a continued wave of M&A activity in a race
to find the best complementary offerings for existing
platforms. When generalist e-commerce platforms
remain focused on retail margins rather than ancillary
services, without occupying a niche, the demise is likely
to come sooner rather than later.
10. On demand
In 2019, we expect to see continued investment in
speed via more onshore and nearshore sourcing, virtual
sampling, microfactories (for rapid prototyping), and
automation. Reduced lead times will be key drivers of
competitive advantage. Small-scale players will likely
lead the way, while larger brands will pilot in selected
markets. We expect the rising take-up of on-demand
capabilities will lead to a spike in personalization and
a new generation of customized clothing start-ups,
creating a new definition of “made to measure.” In the
technology space, automation intellectual property will
continue to develop, with patent approvals likely to be
critical success factors in the years ahead.
McKinsey & Company, 01/2019
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