Transforming overarching trends into competitive business models and service offerings is no small task. It requires keen observation of the market, an idea of what is coming, and the courage to put things into effect.
A lot has happened in the industry since we last took an in-depth look at the fashion market, half a decade ago, and the upheaval continues. In the midst of the coronavirus-stricken winter of 2020/2021, we ask ourselves what developments there will be in the fashion market over the next ten years. This is an endeavour in which we deliberately push aside the overly dominant present and venture a glimpse of what the fashion market will look like in 2030
The options are numerous: circular economy and supply chain law, re-commerce, all-dominating online platforms? Or co-operative behavioural patterns between consumers, manufacturers and retailers, flourishing and transformed city centres that thanks to new concepts provide a space for social gathering and well being for consumers?
The report predicts the fashion market will be substantially more regulated than it is today by 2030. We shall also have a largely functioning circular economy that shifts the majority of raw material procurement to the sales markets. Fashion consumables will be a thing of the past.
Textile shopping is polarising: it is perceived either as a must or as a pleasure. Although the fashion market has a strong online orientation, bricks-and-mortar retail continues to play a significant role in clothing purchases.
Retailers have untapped levers to positively influence on-site purchasing, especially product availability information beforehand. Discounts, vouchers and special promotions continue to gain in importance – both online and in bricks-and-mortar stores.
Brand-name clothing is not a must for many, but it certainly stands for good quality. However, the term "brand" is becoming blurred; there is hardly any distinction between manufacturer brands and retailer brands.
The customer is now the central focus of retailer's activities. The aim is to offer them a unique customer experience.
Customers increasingly expect omnichannel offerings. Female and young consumers in particular demand such options, which are definitely part of their lifestyle. Omnichannel concepts pay off in convenience, time savings and accessibility – service elements which go beyond price. However, this poses major challenges for retailers in terms of corporate culture and structure, internal processes, staff deployment, data analysis and costs.
No digital toolbox can replace interpersonal interaction and personal advice in the shop. Companies should create and maintain a clever link between online channels, digital assistants and bricks-and-mortar business with personalised service. This not only directly benefits the company in question, but also helps to counteract the loss of footfall and the desolation of city centres. The targeted use of customer data is of strategic importance and can favourably influence marketing activities, purchasing, pricing strategy and many other areas
From a consumer perspective, price beats sustainability. This principle still applies to the majority of customers and concerns both the price of the clothing and the transactional costs associated with the purchase, for example postage for returns. Consumers are aware that sustainability does not stand or fall with the material of the product, but also includes fair wages, decent working conditions and climate change. The responsibility for sustainable production conditions is seen to lie predominantly with manufacturers. Retail, on the other hand, has a particularly important role to play in creating supply chain transparency. However, consumers rate their own obligations as low. Sustainable fashion concepts are becoming increasingly popular with consumers, with recycled textiles showing the greatest potential.
From a corporate perspective, companies know that sustainability is not the number one priority for customers when it comes to clothing, but that in reality they prioritise likeability, convenience and value for money. The majority of companies are of the opinion that sustainability can only be achieved in cooperation with all actors, i.e. systemically. However, politics is seen as playing a decisive role in this. That said, they also see a clear obligation on the part of consumers. Seals as a means of quality and product transparency are regarded critically in the eyes of companies. They expect more from a – preferably international – (supply chain) law that enforces product transparency on equal terms for all.
There are various opportunities for AI and analytics in fashion retail. In particular, the focus is on the organisation and optimisation of goods availability as well as dynamic pricing. The individual design of clothing shifts the final production closer to the customer, sometimes even into the shop.
Individualising "craftsmanship" is returning, with the customer being brought on board for creativity. The introduction of product innovations via the so-called young fashion segment appears to be the most promising. In addition, social media are well-suited marketing channels for the customers concerned.
Cooperative partnerships in the field of digital innovations open up new opportunities to exploit synergy effects. Technology-assisted collaboration as well as automation and improved flexibility complement each other and accelerate the development and market maturity of new products.
Based on the results of this study, four basic archetypes can be identified: safe player, experience hunter, self-actualiser and trend-setter. This section provides information on psychographic characteristics and preferences that are typical for people in each group.
By 2030, the upheaval in the fashion market, which has already been apparent for several years, will have resulted in a completely new market situation. The coming decade will be one of social and economic transformation, in which the fashion industry will play a central role. Under these circumstances, the question is: How will companies deal with the following megatrends that emerged from interviews with experts?
The fashion industry is in a state of flux. Customer centricity, digitalisation, space reduction, e-commerce and sustainability are just a few of the topics that are currently driving the industry. Fashion companies need to reposition themselves and rethink their strategies.
In which direction will these trends continue to develop? What do consumers look for when buying clothes? Appropriate customer segmentation and a target group-specific customer experience based on this can offer retailers options for attracting new customers and retaining existing customers in the long term. The aim of the study is to provide an overview of the fashion market and its challenges, as well as to provide food for thought for the future.
Interested in further study findings, or want to create the best retail experience for your customers? We can help. Contact our Retail team today for experienced guidance. We'd be delighted to hear from you.