could accelerate some of these consumer shifts, such as a growing antipathy toward waste-producing business models and heightened expectations for purpose-driven, sustainable action. Washing, solvents, and dyes used in manufacturing are responsible for one-fifth of industrial water pollution, and fashion accounts for 20 to 35 percent of microplastic flows into the ocean. Reflecting in-depth research and numerous conversations with industry leaders, it reveals the key trends likely to shape the fashion landscape in the year ahead. With this special coronavirus update to The State of Fashion 2020, we have taken a stance on what our new normal will look like in the aftermath of this black swan event to provide insights (from analyzing surveys, data, and expert interviews) for fashion professionals as they embark on the 12- to 18-month period after the dust settles. Another is that Indiais on the riseits growing middle class, powerful manufacturing sector, and increasingly savvy tech have made it an essential destination for fashion companies. It is a long and arduous transformation many organisations won't see tangible results from for years to come. McKinsey State of Fashion 2021 Survey; McKinsey analysis. The authors wish to thank Sarah Andre, Althea Peng, Sonja Penttil, and Robb Young for their contributions to this article. Inflation is at the top of executives minds for the coming year, according to results from the annual Business of Fashion and McKinsey State of Fashion Survey. Imran Amedis the founder, editor-in-chief, and CEO of the Business of Fashion. Amid these challenging dynamics, the imperative for brands will be to secure their recovery. the fashion industry faces a complex mix of challenges and opportunities, the primary driver will continue to be digital channels, UN chief says coronavirus worst global crisis since World War II, The State of Fashion 2020: Coronavirus Update, Coronavirus offers a blank page for a new beginning says Li Edelkoort, the outlook for the global economy is less rosy, 2019 Apparel Chief Purchasing Officer Survey, a potential shake-up of global value chains, moving into a decisive phase of digital adoption, consumers expect a consistent brand experience, a shift in focus to a customer-centric model, consumers have become more demanding, more discerning, and less predictable in their purchasing behavior. SHANGHAI, March 15, 2023 /CNW . Just as China inched through recovery, outbreaks worsened in Europe and the United States. Despite a dip in margins, discount and luxury outperformed the wider market in 2020, while the midmarket continued to be squeezed. The State of Fashion 2022 from the Business of Fashion and McKinsey & Company, found some brands were already surpassing their pre-Covid performance, benefitting from a burst of pent-up consumer demand that was expected to continue. The trick in 2020 will be to prove to investors they can turn potential into profit. We predict that 2019 will be a year shaped by consumer shifts linked to technology, social causes, and trust issues, alongside the potential disruption from geopolitical and macroeconomic events. Johanna Andersson is a consultant in McKinseys Stockholm office, where Sara Kappelmarkis a partner; Achim Bergis a senior partner in the Frankfurt office, Martine Drageset is a consultant in the Oslo office, and Saskia Hedrich is a senior expert in the Munich office. To keep up, leading fashion players are accelerating their speed from design to shelf. What will define the industry in the coming year? New York, USA, 16 March 2023-/African Media Agency(AMA)/Essential workers who kept families, societies and economies going while the world was on COVID lockdown, need better pay and conditions urgently, if countries are to future-proof themselves from the next global crisis, UN labour experts said on Wednesday. +. The seventh annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals the industry is heading for a global slowdown in 2023 as macroeconomic tensions and. Regardless of size and segment, players now need to be nimble, think digital-first, and achieve ever-faster speed to market. Long-term leaders include, among others, Inditex, LVMH, and Nike, which have more than doubled their economic profit over the past ten years (Exhibit 2).20To view exhibit, refer to The State of Fashion 2019. The report, the fifth in our annual series, drills down into the major themes affecting the fashion economy and assesses a range of possible responses. From a geographic perspective, China was the standout performer over 2021, as its economy recovered much faster than those of other countries. Around the globe, we expect more than 20 percent annual digital growth in 2021 (with 30 percent in Europe and the United States) compared with 2020.3McKinsey analysis. This need for speed is driven partly by social media accelerating the movement of fashion trends to the masses, and by industry leaders using analytics and customer insights to meet customer needs better and increase responsiveness. With the pandemic adding to the segments woes, many brands have embarked on strategic reviews or have compressed multiyear transformations into just a few months. Achim Berg is a senior partner in the Frankfurt office. Supply chains remain disrupted from the COVID-19 pandemic, elevating the need to invest in faster and geographically closer manufacturing systems. ABIDJAN, Cte d'Ivoire, 15 mars 2023/APO Group/ -- Le ministre du Commerce, de l'Industrie et de la Promotion des PME, Souleymane Diarrassouba, a prsid, le mercredi 15 mars 2023 Abidjan-Treichville, la crmonie officielle de clbration de la 40me Journe mondiale des Droits des Consommateurs (JMDC) place sous le thme Autonomiser les consommateurs par une transition . In China, further COVID-19 outbreaks and the real estate crisis have undermined the regions growth trajectory, as well as disrupted supply chains. Based on McKinsey's analysis of fashion forecasts, the luxury sector is expected to grow between 5 and 10 percent in 2023, driven by strong momentum in China (projected to grow between 9 and 14 percent) and in the United States (projected to grow between 5 and 10 percent). Finally, amid rising competition for talentparticularly tech talentbrands need to find new ways to attract the best and brightest, with cybersecurity likely to be near the top of the agenda (Exhibit 2). Digital disruptors will face more cautious investors in the year ahead. Once the dust settles on the immediate crisis, fashion will face a recessionary market and an industry landscape still undergoing dramatic transformation. Meanwhile, extreme weather is negatively affecting supply chains and raw materials across Asia. These are some of the findings from The State of Fashion 2022, written in partnership with the Business of Fashion (BoF). Download the report to view the exhibit. The authors wish to thank McKinseys Tiffany Wendler, as well as the Business of Fashions Robb Young, for their contributions to this article. Previously, I worked with UNDP's Chief Digital . The bottom line going into 2022 is that the fashion industry faces a complex mix of challenges and opportunities, in which there is little room for missteps. The State of Fashion 2023: Resilience in the Face of Uncertainty, the seventh annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals the industry is heading for a global slowdown in 2023 as macroeconomic tensions and slumping consumer confidence chip away at 2022s gains. All things considered, we expect fashion-industry growth will increase to 2.5 to 3.5 percent in 2017, although the days when the industry outpaced GDP growth by as much as two percentage points seem over. Here's how to keep it that way: https://mck.co/3kACM6X McKinsey & Company on LinkedIn: The State of Fashion 2023 1 "The State of Fashion 2023: Holding onto growth as global clouds gather," McKinsey, November 29, 2022. Fashion leaders are also watching global headlines closely in the year ahead, as macroeconomic and political uncertainties continue to obstruct business operations and escalate reputational risk. That offering will combine the best of human and automated servicesthe beginning of a truly bionic customer experience. A quarter of respondents to a 2021 survey by McKinsey in the U.K. said their purchase decisions were driven by sustainability, while 80% of consumers in a U.S. survey said sustainability was an important factor when selecting a brand to shop, according to the 2023 State of Fashion report from McKinsey and The Business of Fashion. And finally, brands will need to be more creative in marketing to attract customers through bold, differentiated content that cuts through a crowded digital environment in which data targeting is no longer effective. Today, The Business of Fashion (BoF) and McKinsey & Company released The State of Fashion 2023 on day two of BoF VOICES, BoF's annual gathering for industry big thinkers. At the same time, we are likely to see more nuanced assessments of store ROI based on a combination of digital and physical lenses. About the event: Performances by popular music bands and artists like Nucleya, The Yellow Diary, Prateek Kuhad, and so on, only for young people aged between 13 and 26 years. So consumers expect it all: convenience, quality, values orientation, newness, and price. Many have had a strong AsiaPacific focus, reflecting the economic strength of the region and the relatively lower impact of the pandemic there, and many have offered a compelling digital proposition. Laggards face increased fashion risk and excess inventory if they fail to match customer demand. It is a long and arduous transformation many organisations won't see tangible results from for years to come. Report McKinsey & Company State of Fashion 2022. As I did last year,. Among product categories, it was a breakout year for sportswear, with 42 percent of positive economic profit in the MGFI index coming from sportswear companies, amid strong growth for Chinese players. External shocks to the system continue to lurk, and growth cannot be taken for granted. Value and affordable luxury will probably be the big winners, both outpacing the industry average at a projected 3.0 to 4.0 percent and 3.5 to 4.5 percent growth, respectively. Slow technology adoption rates in fashion. Emerging markets remain a crucial source of this growth; indeed, in 2018, for the first time, more than half of apparel and footwear sales will originate outside Europe and North America. Our survey of 290 global fashion executives and interviews with thought leaders and pioneers have helped us identify ten key themes that will set the agenda in the year ahead. The report, the seventh in the annual series, discusses the major themes shaping the fashion economy and assesses a range of possible responses. The industry as a whole is embracing new opportunitieseven as dangers lurk. The average market capitalization of apparel, fashion, and luxury playersdropped almost 40 percent between the start of January and March 24, 20208McKinsey analysis, based on data from S&P Capital IQ. Now, the resulting quarantine of consumption13Marcus Fairs, Coronavirus offers a blank page for a new beginning says Li Edelkoort, Dezeen, March 9, 2020, dezeen.com. These are some of the findings from our latest report on The State of Fashion, written in partnership with the Business of Fashion (BoF), which explores the industrys fragmented, complex ecosystem. Enlit Africa Launches 2023 Programme Headlines / March 17, 2023 / By Editor Enlit Africa (formerly known as African Utility Week and POWERGEN Africa) proudly presents its 2023 programme, which will run from 16 to 18 May at the CTICC in Cape Town. It is quite a sobering read overall, but definitely worth a look! SHANGHAI, March 15, 2023 . We expect in 2022 that companies will seek fresh approaches to online creativity and commerce, with nonfungible tokens, gaming skins, and virtual fashion edging closer to the mainstream. The modern shoppers comfort with digital channels and content has created a complex customer journey across online and offline touchpoints. This week, why the fashion industry is likely to remain in a state of flux in 2023. NEW YORK, March 16, 2023 (GLOBE NEWSWIRE) -- CGS, a global provider of business applications, enterprise learning, and outsourcing services, today released its . 77% of shoppers surveyed in a 2022 report by Drapers say they consider sustainability when buying fashion, either all the time or sometimes. Consumers (and increasingly, investors) will reward companies that treat their workers and the environment with respect, and the deeper relationships that emerge will bring benefits in agility and accountability. Anita Balchandani is a partner in McKinseys London office, where Jakob Ekelf Jensen is an associate partner and Leila Le Merle is a consultant. Download The State of Fashion 2020: Coronavirus Update, the full report on which this article is based (PDF3MB). Its a sentiment shared by industry executives: 40 percent expect conditions for the industry to improve in the year ahead. Of course, for every success, there are also relative failures. Performance will vary depending on the individual dynamics of specific market segments and categories. The prevailing mood of fashion leaders is one of anxiety and concern. Inflation and geopolitical concerns dominate the agenda for 2023, negatively affecting both consumer demand and brands operating costs. In the light of all this change, the performance gap between frontrunners and laggards continues to widen: from 2005 to 2015, the top 20 percent of fashion companies contributed 100 percent of the industrys entire economic profit; in 2016, the top 20 percents contribution had increased to 144 percent. Tesla Investor Day 2023: $25,000 Next Gen Vehicle To Be Made In Mexico . Business of Fashion and McKinsey & Co. released their annual report, "The State of Fashion 2023," containing insights for the upcoming year and 10 key trends that are set to shape the. Elon Musk says he will honour the results of a Twitter poll asking whether the should resign as head of the social media platform Imran Amed is the founder, editor-in-chief, and CEO of the Business of Fashion and an alumnus of McKinseys London office, where Anita Balchandani is a senior partner; Sarah Andr is a consultant in the Paris office; Achim Bergis a senior partner in the Frankfurt office; and Felix Rlkens is a partner in the Berlin office. Customers attention is also tuned to new channels. We predict a 5 to 10 percent sales growth in China in 2021 compared with 2019. Yet fashion, because of its discretionary nature, is particularly vulnerable. However, there may also be new opportunities from growing southsouth trade and the renegotiation of trade agreements. Economically, we see a number of trends that will shape the industry, including fashions response to intensifying volatility, continued challenges in China, and the rise of urban centers. While the report doesn't explicitly state the fact, it . These can be embedded in items to support after-use activities such as resale and recycling. The fashion industry posted a 20 percent decline in revenues in 201920, as earnings before interest, taxes, and amortization (EBITA) margins declined by 3.4 percentage points to 6.8 percent. They can lean into the following ten emerging consumer trends: Bereft by global risks and uncertainties, leaders in the fashion industry will need to pay careful attention to macroeconomic and political issues in the regions where they produce and sell their products in the year ahead. Perhaps unsurprisingly, investors this year had more confidence in the top 20 than in other companies, and super winners were less badly hit by the April stock market sell-off than their peers were (26 percent from December, compared with 33 percent on average). The industry is now on red alert. Sales of the traditional fast-fashion sector have grown by more than 20 percent over the last three years, and new online fast-fashion players are gaining ground. By: 24-7 Press Release. The shift in demand toward holistic brand experiences is forcing fashion brands to adapt to new circumstances and expectations by creating more resilient, connected, and transparent value chains that deliver on the brand promise, regardless of industry challenges. Education, Energy, and the Environment Committee . Saskia Fairfull. With companies in China leading the way, brands will engage even more closely with social media to offer shoppers exclusive content and personalized experiences. Frontrunners are building agile supply chains supported by higher-quality consumer insightswith the frontier being close to a real-time supply chain fed by test and learn and data analytics. Luxury stands to grow by 9 percent to 14 percent in 2023, compared with non-luxury fashion categories, which are projected to see just 2 percent to 7 percent growth next year. Strikingly, only 9 percent of respondents think conditions will improve next year, compared with 49 percent who said the same last year. This fourth in our annual series analyzes major themes around the fashion economy and breaks new ground to explain the dynamics driving the industry. Here, we expect a modest growth of 1 to 2 percent. However, as they pivot toward growth, a significant challenge is potential shortages of products and resources, as chocked supply chains and rising shipping costs undermine operations. Cathrine Matidza, director of fleet procurement at the Department of Trade, Industry and Competition, told a webinar that current legislation - which makes local content requirements optional for state organs . Among investment banks, Goldman Sachs was the largest recruiter, making eight offers, closely followed by o3 Capital with three offers. Exactly when this will happen is impossible to know for sure, except that it will, in all likelihood, be linked to the discovery of a workable antiviral treatment and delivery of a proven vaccine, which some experts say is at least 12 to 18 months away. Instead, we referenced our 2018 list to gauge the fortunes of the elite group. In a McKinsey fashion report, industry experts Elizabeth Hunter, Sophie . The fashion market, excluding the luxury sector, will struggle to deliver significant growth in 2023. To respond more effectively to risk, fashion companies will need to rethink their operations, update their organizational structures, and introduce new roles or elevate existing ones. NEW YORK, March 16, 2023 (GLOBE NEWSWIRE) -- CGS, a global . However, there will be opportunities. McKinsey analysis, based on data from Amazon and Stackline. 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