Fashion in 2019: The Shift From Challenges to Opportunities
The fashion industry needs to adapt to changing consumer expectations if they want to remain viable players. The global economy looks volatile to many, and companies looking to protect themselves from the uncertainty ahead must be conscious of the slowed economic growth and changing international trade relationships in the form of trade wars and Brexit, to name a couple of factors. More specifically, the bulk of economic growth can be found in the luxury goods market, and in developing markets in Asia. Market conditions strongly favor the very top producers in the industry, while smaller or public companies are facing increasingly hostile conditions.
Global economic growth is expected to slow in established areas and stagnate in developing markets. Also, productivity has mostly stayed constant for several years, so in the presence of stagnant or decreasing market potential, manufacturers should be wary of the impending trade landscape.
The sheer amount of uncertainty, as significant world players disrupt the status quo of trade, presents the fashion industry with risks that could affect profitability in the coming years. However, risk and uncertainty are nothing new for the fashion industry in modern times, and companies are increasingly focused not on doomsday prepping, but their vision for their brand in the future.
Rapidly changing industry and market conditions have become the new normal, by making consumer demands more transparent and pressing on social media, and companies are disrupting their own production methods to adopt and integrate digital technologies more thoroughly into their workflows.
Among the most popular technologies to be adopted by consumers and companies is mobile content and functionality. Also critical to consumers are the moral values of the company, demonstrated through sustainable methods of production and socially-conscious company philosophy. In an age where it is easy to call out anyone, whether an individual or a major company, for possibly objectionable activity, the industry must make their best efforts to provide transparency to consumers to retain their favor.
To keep costs as low as possible, companies are also reviewing the productivity levels of their employees, in the hopes of maximizing it and bolstering the value of the company. As digital technology becomes integrated into the workplace and beyond, ensuring a harmonious interaction occurs between the workforce and the equipment can help cut waste and increase sales in the long run.
The emerging consensus regarding the global economy is that anxieties about shifting relationships create more of a problem than an opportunity. With economic growth slowing and companies having difficulty increasing productivity in the workforce, there is much to be wary of. It seems that the gradual rehabilitation of the global economy after the recession of the mid-2000s is starting to stagnate and even backslide in some areas.
In the wake of many companies investing in omnichannel and e-commerce avenues to enhance the consumer experience, executives are looking for ways to maximize their investment even during unfavorable economic times. Costs of production are also rising, but that effect is tempered when companies implement new strategies to optimize productivity.
With promising prospects expected for luxury markets in the US and globally, the developing markets in Asia are ripe for increased profitability in 2019. In particular, India is likely to grow most in consumption compared with other emerging markets. Improving economic conditions in the country and a strengthening professional class has given India the means to become a more significant consumer in the global fashion industry, not just a producer. And in the digital age, India is knowledgeable in the technology sector and can utilize technologies aimed at enhancing the consumer experience, including artificial intelligence and mobile platforms.
However, incoming fashion brands must adapt their products to the tastes and requirements of a culture that some would describe as more conservative than the West, particularly when it comes to women's fashion. Providing options to the differing and personal tastes of people in India will help fashion brands gain a foothold in the country.
While the country does not yet have the same level of infrastructure as other geographic markets, namely with an absence of luxury shopping centers, the country is investing money to support this demand. Furthermore, the income inequality and alleged government corruption occurring in India may be cause for concern of new entrants to the country, but caution and due diligence should help protect newcomers from excessive risk.
Strained U.S.-China trade relations regarding the controversial tariffs leading to a U.S.-China trade war have left many producers looking to move production out of China, and focus sales efforts on Asian markets. Companies are also trying to improve consumer satisfaction by heeding the demand for rented or resale clothes instead of always buying them.
This part of the fashion industry yet lacks a dominant player so 2019 could be the year for a company to step up to the role in that market. Finally, corporate social responsibility is increasingly important to young consumers in particular, as is the need for brands to align with their values. To gain and retain these consumers, paying attention to the collective consciousness of their consumers will be critical to a company’s business strategy.
Between the challenges coming from geopolitical events, changing consumer demands, and emerging technologies, the fashion industry has its share of disruption ahead. Taking initiative to act on the current industry trends and inhabiting the cutting edge of the markets will be a company’s best chance of attaining or maintaining profitability in 2019 and beyond.