Mckinsey 2019 Ten Trends In Global Fashion Industry

McKinsey predicts that the external economic situation may have a potential impact. The growth trend of the whole industry should not be too optimistic.

2019 fashion retail sales will grow by 3.5 to 4.5%, slightly slower than 2018, and the growth rate will gradually slow down. According to the subdivision of McKinsey, clothing, footwear, sports, luggage, jewellery watches and other accessories will slow down in 2019. At the same time, sales of luxury goods, light luxury goods, high-quality goods, medium priced and discounted goods will also decline in 2019.

Polarization is still a serious reality in the fashion industry. Most of the growth will come from luxury goods and emerging Asian markets.

97% of the industry's economic profits were earned by 20 companies, of which 12 were luxury goods. It is worth noting that the top 20 companies have remained stable. Long term leaders, including Inditex (Zara parent), LVMH and Nike, have more than doubled their economic profits over the past ten years. McKinsey also predicted that the Greater China region will replace the United States for the first time in the world to become the largest fashion retailing market in the world.

McKinsey and BoF jointly released the 2019 global fashion industry report, summed up 2019 of the ten trends in the global fashion industry.

1. caution

The decline in key economic indicators and other potential instability will breed more cautious emotions. With the possibility of global economic slowdown in 2020, fashion companies will become more cautious and begin to look for more opportunities to increase productivity compared with previous years.

2. the rise of India

With the growth of the middle class consumer groups and the enhancement of manufacturing industry, India has become the focus of fashion industry. Fashion companies must redouble their efforts in this highly dispersed and challenging market. In this market, well-educated high quality people exist alongside the uneducated poor.

3. trade 2

All companies need to develop contingency plans to deal with potential restructuring of the global value chain. On the one hand, clothing trade may be affected by obstacles such as trade tensions and uncertainties. On the other hand, new growth opportunities and trade agreements renegotiation in some regions will bring new opportunities.

4. the end of ownership

With the continuous development of secondhand goods, refurbishment, repair and leasing, the life cycle of fashion products is becoming more and more flexible. Fashion enterprises will increasingly enter this market to acquire new consumers who are concerned about affordability but do not care about the permanent ownership of clothing.

5. Awakening

The younger generation's enthusiasm for social and environmental undertakings has reached a climax, resulting in the brand must be fundamentally aimed at attracting consumers. Consumers from some but not all markets will be more willing to consume fashionable enterprises that take positive measures against social and environmental problems outside traditional corporate social responsibility.

6. now or never

With the development of Internet consumption, the time difference between discovery and purchase behavior has become a pain spot for impatient fashion consumers, who are trying to buy products they discover immediately. Enterprises will focus on shortening this time lag by shortening the delivery cycle, improving the usability of advertising products, and visual search.

7. thorough transparency

Long term ownership and processing of personal data will bring consumers' unbelief and willfulness. Consumers hope that companies can repay them with greater transparency and information sharing. In order for the company to meet the new standards of consumer trust, they need to provide more transparency in terms of value for money, creativity, integrity and data protection.

8. no problem.

With the growing demand for novelty, the acceleration of the new generation of small emerging brands has accelerated. Traditional brands have begun to subvert their business models, images and products to cope with the decline in brand loyalty. McKinsey expects more brands to follow suit in this self subversion, which will have a significant impact on its business model.

9. grab digital fields

Whether it is the client or the enterprise side, with the increasing competition of alternative e-commerce platforms, enterprises will continue to innovate by increasing value-added services. Whether through acquisitions, investments or internal R & D, enterprises that diversify the fashion enterprise ecosystem through the electricity supplier mode will be more ahead of those enterprises that rely solely on physical retail profits.

10. production on demand

Automation and data analysis enable new generation start-ups to achieve agile order production. Most fashion enterprises will begin to optimize the supply chain, respond to trends and consumer needs more quickly, achieve timely production, reduce inventory backlog, and make short batch and small batch production cycle a new normal.

Overall, the global fashion industry continues to linger in a changing state, and the fate of individual enterprises can be shifted at an alarming rate. McKinsey's ten trends show that the transfer of new markets, new technologies and consumer demand brings both opportunities and risks. It is estimated that 2019 will be a year dominated by consumer desire, which is related to technology, social causes and trust issues, and may also be affected by regional political and macroeconomic events. Only those brands that accurately reflect the spirit of the times and dare to subvert themselves will become winners. Author: compile / Chen Cheng