The State of Fashion
I came across the Corona update of the BOF and McKinsey State of Fashion report and I felt compelled to read it.
Since I have a background in fashion and am still focussing on sustainability in fashion, I was curious how BOF and McKinsey see the sector survive and adapt.
I wanted to share some personal thoughts about this report with you.
The corona update is an update of The State of Fashion Report which was released at the end of 2019. As in many other sectors, the coronavirus messed it all up.
All the retail outlets are closed, shopping centres closed, high streets closed, supply chains interrupted, orders cancelled, fashion weeks cancelled and we can keep going.
It’s pretty bad news any way you look at it. “E-commerce/digitization to the rescue” could be a plausible solution. Where possible, that is what’s happening although it will not and cannot make up for the losses in the retail stores. Some brands get very creative with more experience-based digital shopping experience, online fashion shows, etc. and I admire the creativity that has emerged.
The image above represents an idea of the focus before the crisis compared to the current state of affairs. Where the industry was already in a high state of alert, the corona crisis only speeded up that process.
According to the report, the main priority will be survival which sounds logical considering current circumstances. Demand for apparel will remain very challenging as you can see below.
The customer shift represents an interesting picture: from Sustainability First, local offerings and finetuning their social media experiences to a discounting mindset where customers will focus on special promotion and a shift towards the digital offering with live streaming and online sales assistants.
The fashion system will also be shaken up quite badly. It will be like Darwin’s “survival of the fittest” where we will see acquisitions happen where the smaller, more vulnerable brands and companies will be bought by the larger players and continued innovation will have to be the main focus.
If you want more details on this, I invite you to deep dive into the report.
One statement that stood out to me is the following: “Predicted revenue drop for global fashion industry In 2020: 27-30% and 2-4% growth in 2021 compared to 2019.”
So, if I understood correctly, they are saying the industry will be back to growth in a year from now? Not sure how realistic that actually is and as a side note, obviously this will only apply to the brands and companies that will survive this ordeal in 2020.
While reading the report, I found there was a big focus on GDP, growth rates, returning to consumption level pre-crisis which I was quite disappointed by. I understand where it comes from however I guess I was just hoping for some smarter insights and doing things differently. Like coming up with more circular business models moving forwards, focussing on quality over quantity, selling in season, more sustainable materials, recycling, focus on services instead of ownerships, more reasonable pay and margins for the ones at the bottom of the supply chain to guarantee liveable conditions,...
In the initial report, sustainability is identified as the biggest challenge as well as the biggest opportunity however in the corona update, there is hardly any mention of this. I believe this is a missed opportunity. This could be the moment to speed up overdue changes in the industry both on the environmental and the social side.
One of the things I have been wondering about is if people will go on a shopping spree when all of this is over or keep the money they still have in there pocket for more necessary items.
Quite a few countries in Europe are starting to open again and it doesn’t seem to be a rush to the shops at this moment, which makes sense as people are still scared of getting infected and with all the precautions, it’s not as fun as it used to be to just stroll around and have a look around. I hope people are realising they might not need new items of clothing every week or month and that they can be perfectly happy with what they already have…
I do wish all the retailers the best of luck in these difficult times, mainly the smaller, independent shops will struggle, so please support them before you go to the big fast fashion chains on the high-street. Try to buy local first and support your community!
I would love to hear your point of view on this so please don’t hesitate to share your thoughts.
Link original report: http://cdn.businessoffashion.com/reports/The_State_of_Fashion_2020.pdf
Link to corona update: