Key fashion insights: McKinsey & BoF State of Fashion Report 2018. According to the recent State of Fashion Report 2018 released by McKinsey & Company in partnership with Business of Fashion, there is a cloud of uncertainty looming over the fashion industry. Uncertainty is nothing new for an industry that is constantly reinventing itself. In fact, this is now considered to be the new normal of the fashion industry.
The findings in the McKinsey Fashion Report further make mention of a “new sense of optimism”. Meaning, there are opportunities to be explored for the players willing to toughen up and work with this new normal.
Here are some of the key McKinsey fashion insights making an impact for 2018 in the fashion industry:
Personalisation is the key focus where consumers are concerned. This is set to be a major theme in the fashion industry. Customers demand a more a personalised and unique approach.
Furthermore, consumers are even pickier. What means a greater demand for unique, exclusive items, high-quality products, and better prices with a lot of authenticities. The customer experience is something that will have to be a priority for businesses.
According to a digital marketing agency AgilOne’s Marketing Personalization Preferences report of more than 3000 adult consumers in the US and UK found that more than 70 percent of consumers expect personalised experiences from brands. They also expect the brands they interact with to be more personal-attached. For instance, to remember how long they have been a customer and to be able to recall their previous purchases.
A clear indication that brands are listening is evident as respondents to the Business of Fashion – McKinsey State of Fashion report highlighted personalisation as the number one trend in 2018.
2. ONLINE PLATFORMS
Online platforms continue to strengthen their position as they invest in stating their place in the fashion space. As a result, they are set to make a big impact in 2018. In the Business of Fashion – McKinsey Global Fashion Survey, more than a third of the fashion executives participating believe that online platforms are among the top 3 trends for 2018 in fashion.
Because of this, fashion companies must think how they will engage with online platforms rather than if they will or won’t engage with them. This could mean fashion companies using these platforms to sell through them. It could also mean giving up the collection and control of increasingly important customer data to the platforms.
The belief among thought leaders is that 40% of Fortune 500 companies will not exist in the next decade. The number of brands that are failing and retailers that are filing for bankruptcy is increasing. It is clear that fashion companies need to adapt or die. Innovation is now crucial for survival.
In practise, more and more fashion companies are drawing inspiration from start-up and digital company models. They may even go so far as to acquire innovative start-ups. This will see fashion companies experimenting with new modes in order to promote their newly acquired innovations.
“We expect that in 2018 the venture capital investment in the fashion ecosystem will grow and investor competition for the most attractive start-ups will intensify as the fashion industry’s significant market size makes it ripe for further technological and digital disruption.” – (Source)
Digital connectivity and data drive globalisation. Entering a new phase of it reffers to a greater connectedness. This rise in connectivity means a wider array of ways to interact in cost-effective ways that reach more people than ever before.
More than 900 million people communicate internationally by social media. It is predicted, that consumers are going to spend $1 trillion on cross-border e-commerce by 2020. It means, that there are opportunities for brands and businesses to maximise even further on globalisation.
As the fashion industry continues to reinvent itself and present new challenges to businesses and brands, it is now more important than ever for brands to look at ways in which they can survive this new normal of uncertainty. Focusing on personalisation trends when it comes to consumers, businesses engaging online platforms more effectively, and discovering innovative means of existing in this brave new world are key to riding the wave of change that the fashion industry finds its on.
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