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10 key trends to drive the global apparel trade in 2019

The new year 2019 is going on. Every year fashion industry gets a new look, new dimension, which could be optimistic or pessimistic for the businessman. Therefore, it is better to be familiar with the future trends as one can cope with it.

10 key trends to drive the global apparel trade in 2019
Figure: Global apparel trends are changing every year.

According to the State of Fashion Report, co-published by McKinsey & Company and Business of Fashion, far-sighted companies will make bold moves in automation and AI, and will disrupt themselves before others do it for them.

The report also revealed that consumers would make or break brands based on trust. And global economic and political trends hover over the whole picture.

Amid what McKinsey has dubbed the ‘year of awakening’ for the fashion industry. The report has focused on 10 key trends that will define the fashion agenda in 2019:

10 key trends that will define the fashion agenda in 2019

Caution Ahead

Indian Ascent

Trade 2.0

End of Ownership

Getting Woke

Now or Never

Radical Transparency

Self-Disrupt

Digital Landgrab

On Demand

  1. Caution ahead: McKinsey said, “A potential turn in the economic cycle is prompting concern among industry executives over prospects for the coming year. Following a prolonged period of growth and rising costs, strategic priorities for the subsequent period are likely to focus more on being nimble and boosting productivity.”Firstly, the uncertainty that plagued 2018 when it came to things like global trade and tariffs, could dampen global economic growth in the year ahead.Already, global growth is showing signs of plateau after averaging above 2.5 percent since the financial crisis, U.S. interest rates are rising, increasing the cost of borrowing money for both companies and consumers, and Europe could see a tightening of the monetary policy, which might lead to slower economic growth.Executives surveyed for the State of Fashion report pointed to economic conditions as the third biggest trend for 2019, and 42 percent expect industry conditions will worsen next year.
  2. Indian ascent: According to the report, “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.”Growth and expansion have been positive in Asia and India will be at the center of it all in 2019. Economic growth in India is expected at 8 percent a year between 2018 and 2022, while the country’s middle class is forecast to expand 19.4 percent, outpacing that of China, Mexico, and Brazil.
  3. Trade 2.0: Actions on the part of the United States as it related to trade in 2018 served to increase tensions, costs, and disruption.McKinsey said, “Companies should make contingency plans for a potential shake-up of global value chains. The apparel trade could be reshaped by new barriers, trade tensions, and uncertainty. However, there may also be new opportunities from growing South-South trade and the renegotiation of trade agreements.”Beyond that, there’s been a bright spot in the Global South, or the Developing World. Trade within the region is expected to increase from roughly 25 percent of global trade at present to closer to 30 percent by 2030, McKinsey noted. China’s One Belt, One Road initiative may be the impetus behind much of the growth.McKinsey noted, “The axes of global trade are shifting, amid a surge in commerce between emerging economies in the Global South. The dynamics may lead to a rethink of sourcing and pricing strategies in the year ahead.”
  4. End of ownership: Today’s consumers want fashion product that’s interesting, readily available, sustainable and affordable—and many have been turning to resale and rental to have those needs met, a trend that’s expected to continue.“The lifespan of fashion products is being stretched as pre-owned, refurbished, repaired and rental business models continue to evolve. Across many categories, consumers have demonstrated an appetite to shift away from traditional ownership to newer ways in which to access product.” McKinsey explained.
  5. Getting woke: The young population of consumers, millennials and particularly Gen Z, want to know they’re buying from brands that stand for something.Nine in ten Generation Z consumers believe companies have a responsibility to address environmental and social issues. And because millennials and Gen Z, together, account for roughly $350 billion in spending power in the U.S. alone ($150 billion spent by Gen Z and $200 billion by millennials) and Gen Z alone will account for 40 percent of global consumers by 2020.McKinsey said, “Younger consumers are seriously concerned with social and environmental causes, which many regards as being 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 don’t.”
  6. Now or never: According to McKinsey, 2019 will be the year the majority of fashion players integrate commerce functionality into social media, as well as the year visual recognition tools will integrate into day-to-day shopping for the average consumer.“The time lag between discovery and purchase is a pain-point for customers who continue to expect better experiences. Companies are increasingly focusing on reducing this source of friction and launching new technologies to enable a smooth and speedy transition from inspiration to the acquisition.” McKinsey said.
  7. Radical transparency: Just as consumers are starting to seek greater transparency, ongoing data breaches at apparel companies have fueled a rising distrust that brands and retailers will need to counter.To do it, they’ll need to ramp up transparency, in many cases, as McKinsey explained, by specifying costs of materials, labor, transport, duties, and mark-up—a level of ‘radical’ transparency that has helped fuel success for companies like Everlane.“Fashion companies must come to terms with the fact that a more distrusting consumer expects full transparency across the value chain,” McKinsey said. “Given the need to regain that trust, fashion players cannot afford not to examine long-standing practices across their businesses.”
  8. Self-disrupt: Disruption has become a tired refrain, as those not doing it—or evolving as a result of it—have already been left behind.Self-disruption, in particular, will be a focus for 2019 as 79 percent of executives surveyed for the report put it among the top five trends impacting the textile and apparel industry.“Technology and social media are enabling a new breed of ‘challenger’ brands that disrupt a sector or category where incumbent players have rested on their laurels,” McKinsey said. “Meanwhile, to compete and stay relevant among demanding young consumers, traditional brands are echoing this dynamic and disrupting their own brands, offerings, and business models.”
  9. Digital landgrab: Simply selling apparel online won’t suffice in a world where everyone is doing much the same thing. Companies will need to differentiate themselves on “emotion and trust,” according to McKinsey.“As the race to be the platform of choice for both customers and fashion companies intensifies, e-commerce players will continue to innovate by adding profitable value-added services and focusing on new technologies,” McKinsey said. “Whether through acquisitions, investments or internal R&D, players that diversify their ecosystem will strengthen their lead over those remaining pure players who rely solely on retail margins and existing offerings.”
  10. On-demand: Brands and retailers can no longer afford for design to be the long, drawn-out process it always was. Now, they need to tap into technology, analytics and nearshoring to shorten that whole development timeline, and 2019 will see more companies step up to deliver on on-demand as many a startup in the space has already done.“Automation and data analytics have enabled a new breed of start-ups to adopt agile made-to-order production cycles. Mass-market players will begin to follow suit, aiming to respond more rapidly to trends and consumer demand,” McKinsey said. “The result is likely to be a rise in just-in-time production, reduced levels of overstock and the rising importance of small-batch production cycles.”

To know more info please visit: www.mckinsey.com

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