The fashion industry is in an upswing headed into the new year, and while that is good news for retailers, it also presents a range of challenges they must meet not only to capitalize on the changing landscape, but to stay relevant.
Think Global, Act Global
According to Business of Fashion, the McKinsey Global Fashion Index is predicting fashion industry sales worldwide to grow by 3.5-4.5% in 2018, particularly within emerging markets. This means retailers whose target markets are in the developed world must branch out to grab a piece of the growth pie.
These global economic changes are coupled with a continued shift in customers’ increased comfort with a range of digital platforms. Together that represents a moving target brick-and-mortar retailers must hit to keep existing customers and attract new ones. Globally, mobile shopping is bigger than ever, and customers will continue to expect retailers to offer robust, seamless purchasing options on mobile platforms.
Fast Fashion Getting Even Faster
E-commerce giants like Amazon and Alibaba have in effect conditioned customers to expect instant service and support, and near-immediate delivery of the product they’re after. This means brick-and-mortar retailers are partnering with logistics companies, or investing in bolstering their own capabilities, to ensure the item the customer wants is in their hands as quickly as possible. Gucci has partnered with Farfetch to deliver its products in select US cities in as little as 90 minutes, according to Business of Fashion.
This also means fashion brands are working to shorten their product development process, dramatically decreasing the time between an item’s inception to shelf-ready. According to Business of Fashion, the “fast fashion” sector has grown by more than 20% over the last three years. Social media, with its ability to canvas large swaths of customers with hot fashion trends at a blistering pace, is a driving force behind that increased urgency.
Geopolitical Climates are on Brands’ Radar
The emergence of the middle class in the developing world means more disposable income, but doesn’t change the sometimes complex geopolitical realities on the ground in those countries. That uncertainty means retailers must always be ready to pivot to adapt to changing political climates. To facilitate that necessary flexibility, retailers stuck in outmoded business models will need to realign their thinking to be more like startups, embracing different talent pools, partnerships and models of investment.
As the developing world’s hunger for fashion grows, as well as their increased comfort with digital shopping platforms, retailers have opportunities to reach those new customers in far-flung parts of the world. But it will take both a mentality and operations shift to make it happen.