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Digital Report - immediate delivery to your email.

Date of Publishing: 2021.
No. of Pages: 128.

For the fashion industry, 2020 was the year in which everything changed. As the coronavirus pandemic sent shockwaves around the world, the industry suffered its worst year on record with almost three quarters of listed companies losing money. Consumer behaviour shifted, supply chains were disrupted and the year approached its end with many regions in the grip of a second wave of infections. A turbulent and worrying year has left us all looking for silver linings — both in life and in business — knowing full well that we will need to make the most of them in the year ahead.
Indeed, according to McKinsey Global Fashion Index analysis, fashion companies will post approximately a 90 percent decline in economic profit in 2020, after a 4 percent rise in 2019. Given the ongoing uncertainty, our predictions for industry performance next year are focused on two scenarios. 

The first, more optimistic “Earlier Recovery” scenario envisages that global fashion
sales will decline by between 0 and 5 percent in 2021 compared to 2019. This would be predicated on successful virus containment in multiple geographies and a relatively rapid transition to economic recovery. In this scenario, the industry would return to 2019 levels of activity by the third quarter of 2022. 

Our second, “Later Recovery” scenario would see sales growth decline by 10 to 15 percent over the coming year compared with 2019. In this case, the virus would continue to wreak havoc despite widespread containment measures and fashion sales would only revert to 2019 levels in the fourth quarter of 2023.

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Contents:

1. Executive Summary.
2. Industry Outlook.
3. GLOBAL ECONOMY.
3.1. Living with the Virus.
3.3.1. Balancing speed with a discipline in a crisis.
3.2. Diminished Demand.
3.2.1. Covid-19 and the New Era of Luxury.
4. CONSUMER SHIFTS.
4.1. Digital Sprint.
4.1.1. Kering: Fast-Tracking a Digital Upgrade.
4.1.2. Alibaba: Innovating for China’s Advanced Ecosystem.
4.2. Seeking Justice.
4.2.1. Louis Vuitton: Hardwiring Accountability in a State of Flux.
4.3. Travel Interrupted.
4.3.1. Selfridges Group: Managing the Pivot to Local Shopping.
5. FASHION SYSTEM.
5.1. Less is More.
5.1.1. A More Circular Fashion Industry Will Require a Collective Effort.
5.2. Opportunistic Investment.
5.3. Deeper Partnerships.
5.3.1. Shahi Exports: Reforming the Fashion Supply Chain.
5.3.2. Risk, Resilience and Rebalancing in the Apparel Value Chain.
5.4. Retail ROI.
5.4.1. H&M Group: Making Retail More Resilient.
5.4.2. Mapping the Retail Portfolio of the Future.
5.5. Work Revolution.
6. THE STATE OF BEAUTY 2021.
7. MCKINSEY GLOBAL FASHION INDEX.

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Digital Report - immediate delivery to your email.

Date of Publishing: 2023.
No. of Pages: 127.

Fashion companies will need to rethink their operations. Many will update their organizational structures, introducing new roles or elevating existing ones to target key growth opportunities and respond more effectively to risk. Brands may also choose to see the next year as a time to team up with manufacturing partners to sharpen their supply chain strategies. This may involve nearshoring to better respond to fast-shifting consumer demand or leaning more heavily on data analytics and technology to manage inventory efficiently.

Distribution channel mixes are also ripe for reassessment. As e-commerce growth normalises after its pandemic boom, the sheen has started to wear off the direct-to-consumer digital model that propelled many brands over the past decade. As lockdown restrictions lifted, shoppers have made it clear that although they still value online channels — particularly within luxury, where online DTC and third-party platforms will continue to drive growth — shoppers also want brick-and-mortar experiences. Brands will also need to factor in the continued return of international travel to pre-pandemic rates, which will be buoyed by a strong US dollar. Wholesale and physical retail have a new role in revamping customer journeys, requiring brands to look beyond tier-one cities to be physically closer to consumers.

Brands will have to work hard to remain attractive to consumers, given the tough economic environment. Consumer behaviours in 2023 will depend greatly on household incomes. While higher-income households will be less affected by economic pressures and look likely to continue shopping for luxury goods, as in previous downturns, lower-income households will likely cut back or even eliminate discretionary spending, including apparel.

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Contents:

1. EXECUTIVE SUMMARY.

2. INDUSTRY OUTLOOK.

3. GLOBAL ECONOMY.

3.1. Global Fragility Managing Inflation for Growth.

3.2. Regional Realities Chalhoub Group: Capturing Fashion’s Growth Potential in the Middle East.

4. CONSUMER SHIFTS. 

4.1. Two-Track Spending Tapestry: Connecting With Customers ‘Is Not Just About Price’.

4.2. Fluid Fashion How Gen-Z is Propelling Gender-Fluid Fashion.

4.3. Formalwear Reinvented Hugo Boss: Reclaiming the Formalwear Space.

5. FASHION SYSTEM.

5.1. DTC Reckoning Allbirds: Conquering the New Multi-Channel Landscape.

5.2. Tackling Greenwashing A New Approach to Scaling Innovative Materials Puma: Moving Sustainability Beyond Marketing.

5.3. Future-Proofing Manufacturing MAS Holdings: Deconstructing Supply Chain Risks, and Rewards.

5.4. Digital Marketing Reloaded How Web3 Is Shaking Up Digital Marketing.

5.5. Organization Overhaul.

6. MCKINSEY GLOBAL FASHION INDEX.

7. THE STATE OF LUXURY 2023.

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Digital Report - immediate delivery to your email.

Date of Publishing: 2024
No. of Pages: 112

In 2024, the industry is expected to bear the impact of fluctuations in demand that have punctuated the past few years.

Marketing is another area of focus. After years of relying on performance marketing, brand marketing may increasingly take centre stage in the year ahead.

AS consumers travel with renewed enthusiasm in the year ahead, fashion companies may need to revamp how they engage with consumers who are shopping abroad.

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Contents:

1. Industry Outlook.

2. Global Economy.

3. Consumer shifts.

3.1. Vacation mode.

3.2. The new face of influence.

3.3. Outdoors Reinvented.

4. Fashion System.

4.1. Gen AI's Creative Crossroad.

4.2. Fast fashion's power plays.

4.3. All eyes on brand.

4.4. Sustainability rules.

4.5. Bullwhip snaps back.

5. McKinsey Global Fashion Index.

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