The global apparel market will be just a little smaller than the GDP of Brazil in 2021. It’s not a secret that international retail will face major challenges in 2023 as consumer confidence drops and supply chains are disrupted. Now is not the right time to close the doors. Now is the time to explore new opportunities for the industry.
The global apparel market will be just a little smaller than the GDP of Brazil in 2021. If the worldwide apparel market were a country, it would be the 14th biggest economy in the entire world.
It’s not a secret that global retail will face major challenges in 2023 as consumer confidence drops and supply chains are disrupted. Now is not the right time to close the doors. Now is the time to explore new opportunities for the industry.
The growing urbanization in the Middle East and Asia and the wave of HNIs are creating a new market for high-end luxury fashion. This is not only manifested in adult fashion but also in children’s clothing, as parents are looking to make sure their kids wear the best clothes that will last and can be handed down to younger brothers and sisters.
The trend towards fast fashion will also see a strong rebound as sustainability and longevity become more important to younger consumers. Fast fashion companies may find it difficult to survive the current economic climate due to their low margins. However, this will open up new markets for innovative companies that can provide more sustainable options.
In 2023, people will spend more money on their health, well-being, and quality of life. This trend is mainly affecting the fitness, health, and wellbeing industries, but it also leads to people purchasing high-end clothing.
Over the next year, there will be many seismic changes to the consumer experience. Many emerging technologies can help the industry explore new ground. We have already seen how technology like augmented reality and virtuality can revolutionize shopping by allowing a customer to “try on” a piece of clothing remotely. Alice Delahunt’s tech-fashion startup, Syky, was one example that recently caught my attention. She is the former chief digital executive of Ralph Lauren. The blockchain-enabled Web3 will allow users the ability to curate, own, and trade fashion in digital reality, physical reality, and augmented realities.
Fashion brands have such growth potential that I am convinced they will be the next unicorn. Fashion brands are often prevented from reaching their full potential by an underlying problem – the inability of the sector to turn raw creativity and innovative ideas into commercial success.
Too many startups lack the managerial experience, operational expertise, and financial tools needed to unlock growth opportunities.
A fashion startup, for example, may not analyze the demographics of its target market based on initial data from online sales. Designers may invest too much in supplies if they fail to make accurate and robust sales forecasts. A new fashion brand might not be able to attract investment due to its lack of experience in dealing with financial professionals.
Suppose they don’t have the right management skills or do not evaluate the feasibility of integrating technology into their business models. In that case, even larger companies will struggle to find new growth opportunities.
Fashion brands need the right tools to take advantage of the changing consumer trends. As we enter a new economic and geopolitical environment in 2023 and beyond, it is time to change.
In the same way that it prioritizes creative talent, the industry should focus on nurturing entrepreneurial and commercial talent. It’s not a solution that can be implemented overnight, but fashion managers could benefit from basic business training to increase their financial literacy.
Outside the fashion industry, there must be a shift in commercial strength. Fashion is known for its insularity. Bringing in business leaders from other sectors could strengthen the hands of businesses in identifying new growth opportunities and tapping into lucrative markets.
Designers and fashion brands often lack visibility on market preferences, and retailers can play a crucial role in bridging the creativity-commercialization gap. Retailers have sales data that can provide clarity about consumer preferences. They can then offer solid guidance on what products and designs are selling.
The fashion industry also needs to work harder in order to attract new investments. Fashion is often seen as frivolous by those with a corporate or financial background, compared to other sectors like tech or ecommerce. This misguided attitude is especially prevalent in the UK despite the fact that it employs more than 500,000 people and has a worth of around 60 billion.
The Government, like any other sector, can play a role. The answer is not necessarily in grants or funding. Instead, politicians and policymakers should focus on increasing fashion’s visibility. Style and design are rarely given the same weight as other traditional industries, such as manufacturing or engineering, in economic policy. We must stop ignoring this sector’s growth potential.
In 2023, despite the recent gloomy headlines and troubling economic forecasts, the fashion industry will still have significant growth potential. We must close the gap between fashion’s raw talent and its ability to translate it into long-term success.