In 2021, the size of the global apparel market was just below Brazil’s GDP. In other words, if the apparel market was a country, it would have been the 14th largest economy in the world.
Looking to 2023, it’s no secret that the global retail sector is facing serious challenges due to declining consumer confidence and disrupted supply chains. But now is not the time to batten down the hatches. Instead, now is the time for the industry to look for new opportunities.
A wave of affluent people (HNI) and increasing urbanization in the Middle East and Asia is opening up a whole new market of high-end luxury fashion consumers. This is not only showing up in adult fashion ranges, but also leading to the growth of luxury children’s clothing, as parents want to ensure their children are wearing the best clothes that last the longest and can be passed down. older siblings.
There will also be a strong rebound in the move towards fast fashion as longevity and durability become increasingly important to younger consumers. While the fast fashion giants may find it difficult to cope with the current economic climate due to their tight margins, this will open up new markets for companies that can offer innovative ways to offer more sustainable options.
Another trend that will increase in 2023 is people spending more on health, well-being and quality of life. While this has implications primarily for the fitness, health and wellness industry, it also drives more people to buy high-quality apparel.
There will also be seismic shifts in the consumer experience over the next 12 months. We’ve already seen how technologies like augmented and virtual reality can revolutionize the shopping experience by allowing a shopper to “try on” an item of clothing remotely, but there are other emerging technologies that offer uncharted territory for the industry. One example that caught my eye recently is that of Alice Delahunt, the former chief digital officer of Ralph Lauren, and her fashion tech start-up, Syky. The blockchain-enabled Web3 platform will enable users to store, trade and own fashion in digital, physical and augmented reality.
With such growth opportunities, I strongly believe that the next unicorn business should be a fashion brand. However, there is an underlying obstacle that too often prevents fashion brands from realizing their full potential: the inability to turn the fashion industry’s raw creative talent and ideas into long-term commercial success.
As it stands, too many startups simply lack the management experience, operational expertise, and financial tools they need to unlock new growth opportunities.
For example, a fashion start-up might not analyze the market demographics that respond well to its products based on early online sales data. A designer can over-invest in supplies by failing to make robust and accurate sales forecasts. And a new fashion brand may fail to attract new investment because it lacks experience dealing with finance professionals.
Even the largest companies in the industry won’t be equipped to unlock new growth opportunities if they lack management talent or evaluate the feasibility of integrating new technologies into their business models.
As we enter a whole new economic and geopolitical climate in 2023 and beyond, now is the time for the industry to make changes to give fashion brands the tools they need to make the most of changing consumer trends.
The industry must focus its efforts on fostering entrepreneurial and business talent in the same way it prioritizes creative talent. There is no silver bullet or instant fix, but a starting point could be to implement entry-level business training for fashion executives to improve overall financial math. Of the industry.
The move towards greater commercial strength must also come from outside the industry. The fashion industry has a reputation for being somewhat isolated, and bringing professionals from other industries into leadership positions could help strengthen companies’ hands to tap into lucrative markets and spot new growth opportunities.
Fashion designers and brands often lack visibility into market preferences, and retailers can play a crucial role in bridging the gap between creativity and commercialization. They have sales data that clarifies consumer preferences and can therefore offer accurate insights into the designs and products being sold.
The industry must also redouble its efforts to attract new investment. Those with a financial or business background may often view the fashion industry as frivolous compared to industries like technology or e-commerce. This misguided attitude is particularly prevalent in the UK, despite the fact that it employs over 500,000 people and is worth around £60 billion.
Like any sector, the government can also play its part. However, the answer doesn’t necessarily lie in funding or subsidies – the most effective way for politicians and policy makers to spur fashion’s growth is simply to give it more visibility. Fashion and design rarely carry the same weight in economic policy as traditional industrial heavyweights like manufacturing and engineering, and we need to stop ignoring the sector’s growth potential.
Despite the dismal headlines and ominous economic forecasts of recent times, there are still significant growth opportunities in the fashion industry in 2023. To make the most of these opportunities, we need to bridge the gap between the fashion’s raw creative talent and ability to translate that. in long-term business success.