What will happen to the fashion industry in 2021? According to consultancy McKinsey, companies need to keep an eye on five trends that have become the new normal thanks to the coronavirus: a decline in demand, a clear shift towards digital shopping, renewed consumer focus on brand values, travel retail in change and a ‘less is more’ mentality. Here are the key conclusions from McKinsey’s new research, titled “Five charts that set the tone as New York Fashion Week 2021 kicks off.”
In the possible scenario that we see economic recovery this year, clothing and accessories sales in China could surpass 2019 figures, Europe could remain at 2019 levels (down 2 to 7 percent) and the United States could may see a slower recovery (with a drop of 7 to 12 percent). McKinsey encourages companies to seize new opportunities and double bet on the best performing categories, channels and countries. A few potentially positive areas to watch out for: the luxury segment in China, athleisure and sportswear (given consumer interest in health and wellness), on casual wear because people still work from home.
Avoid overstock
61 percent of fashion executives say they want to reduce the number of SKUs to avoid overstock. Less than two-thirds of the clothing produced is sold at full price and the overstock problem will only get worse if companies fail to adapt to the new ‘less is more’ attitude of consumers. This new mindset also includes a preference for products that last longer, are of better quality and are produced sustainably.
Offline retail may regain some of its market share this year. Online sales are likely to remain high and shoppers will increasingly demand more sophisticated digital interactions. This will be the year when fashion entrepreneurs embrace the online experience and optimize the combination of different channels while at the same time finding ways to bring the authentic human aspect into it.
Expect more live streams, branded avatars and collaborations between the fashion industry and gaming companies. Sustainability in fashion goes beyond the impact of industry on the environment. These include topics related to social justice and human rights: since the corona crisis, consumers have become more aware of how vulnerable workers are in the fashion value chain. About 66 percent say they will stop or spend less with a brand if it doesn’t treat its employees or the employees of its suppliers fairly. Social media and the rise of Generation Z are likely to make this a long-term trend. In other words, it’s time for authenticity and action: brands must make a significant commitment to workers’ rights.
Travel retail still changing
Other possible scenarios, according to McKinsey and also Oxford Economics, are that the travel industry will go through three post-corona crisis phases: recovery from the pandemic, economic recovery and a new normal. The times when these phases occur and how quickly people recover vary from region to region. International tourism may not see activity before 2023 to the extent that it was there before the pandemic. This means fashion companies need to focus on better engagement with local customers and strategic investments in recovering markets such as the Chinese market.
Beeld: Pexels. Bron artikel: McKinsey rapport ‘Five charts that set the tone as New York Fashion Week kicks off’
This text was previously published on FashionUnited.COM. Translation and editing into Dutch: Veerle Versteeg
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