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The State of Fashion 2018

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The State of Fashion 2018

Release date: 19 March 2018

Topics:

Digitalization

Artificial Intelligence, AI

Consumer Sentiment

E-Commerce

Retail trade

In our days after a tough 2016, a recovery in the fashion industry is on the horizon. McKinsey Global Fashion Index forecasts industry sales growth to nearly triple between 2016 and 2018, from 1.5 percent to between 3.5 and 4.5 percent. In fact, 2017 signals the end of an era, more than half of apparel and footwear sales will originate outside of Europe and North America. The main sources of growth are emerging market countries across Asia-Pacific, Latin America regions.


The Report also points out the difference between prices for goods segments. The industry continues to polarize: consumers are trading away from the midmarket price points even while the luxury and discount segments are picking up speed. Handbags and to some extent watches and jewelry, are returning slowly to their historic highs, driven by demand in emerging markets. Athletic wear is the only category where record growth rates look to slow down slightly.

Nonetheless, this is still expected to be the fastest-growing category, with continued strong demand in many markets. However, a number of remarks by McKinsey & Company make it clear that even industry leaders still have obvious problems with the definition of real challenges related to digital trends and adequate responses to them. The situation is exacerbated by the low «digital efficiency» of major brands. Digital-first companies such as Alibaba, Amazon continue to force fashion companies to improve their digital communication channels.

Although more than 75 percent of fashion retailers plan to invest in the AI in 2018 — 2019, consumers may be ahead of the market with their demands.


Many consumers today expect perfect functionality, short delivery time and immediate support. They are becoming more selective and less loyal to a certain brand. Industry players are moving toward unpredictability and are forced to focus their efforts on what is already under their control. And all opportunities to win the trust of numerous consumers around the world are opened only to those who are already mastering the technologies of the future, developing a modern fashion system, all opportunities to win the trust of numerous consumers around the world are opened.

The report is based on the surveys of more than two hundred company leaders and influential, future-oriented experts in the fashion industry and will be useful both for board members and founders of fashion start-ups, as well as for those who are just buying clothes and shoes.

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