10 Largest Challenges in The Fashion Industry
“Anxiety” and “worry”. Are two words we could define the feelings with which the fashion world, and its top executives, face the year in 2020. This situation is counterbalanced by the slight air of optimism with which some sectors, especially in the United States, were entering 2019. Here we discuss the largest challenges in the fashion industry .
With such a worrying situation for the fashion industry, it will not be bad news. Or rather, it will not be bad news for everyone. Since the growth of the emerging markets in Europe, Latin America, the Middle East and Africa is expected to remain stable throughout 2020. At the same time, we will see a greater concentration of a sector in which large companies and multinationals will be taking an increasing share of the pie. Because they will be the only ones able to satisfy the demands in innovation and sustainability that today’s consumers demand.
- On High Alert
One of the main recommendations the report makes to companies is that by 2020 they should act with extreme caution. They should pay particular attention to monitoring potential frictions between developed economies and emerging markets. Situations that, together with the increased risk of a possible recession, have already led many companies to develop resilience guides and contingency plans with which to mitigate macroeconomic and geopolitical instabilities and trade tensions.
2. New generation of consumers
As all companies struggle to capture and retain users’ attention through the same platforms and social networks, it will become imperative for fashion companies to rethink their strategies and find ways to maximize the return on marketing spend. To achieve this, it will be key to achieve content capable of attracting maximum attention. Content must be developed taking into account the platform on which it will be published and the market to which it is directed, using, whenever possible, direct links that facilitate the purchase.
3. Neighbourhood shops
The immediacy demanded by today’s consumers is causing many companies to decide to complete their commercial network with smaller physical stores. With which they manage to bring the products closer to the consumer. Being successful, they point out from the report, in managing to combine the experiences in stores with an offer located in neighbourhoods and suburbs beyond the main commercial routes.
4. More Sustainability
The fashion industry is one of the most polluting industries, and one of the most energy and raw material intensive. For this reason, and in spite of the tenuous advances that are already being introduced, 2020 will be the year in which companies will have to leave their promotional and advertising initiatives to three, replacing them with really significant actions that will even exceed what consumers are already demanding today. In this way, the definitive transformation of the industry towards a new sustainable model will be promoted.
5. New Materials
There are more and more companies that are betting on exploring new alternatives to traditional materials, deciding to replace them in their collections with new, more sustainable or technical fabrics. These advances are expected to continue throughout 2020, a year in which great surprises are expected to come from the R+D departments.
6. An Inclusive culture
Consumers already demand that fashion companies be proactive guarantors and advocates of diversity and inclusion. These two concepts will continue to be at the heart of companies’ agendas throughout 2020, being among their highest priorities and affecting their own internal organisation, advertising campaigns and collections. These measures will add to an increasing demand in terms of transparency.
7. Beyond China
China will continue to offer incredible and exciting growth opportunities for the fashion industry in 2020, but the Chinese giant is proving to be much more complex than many multinationals ventured to estimate. So it is advised that, as some companies are becoming too dependent on the Chinese market, and others are only aspiring to enter it; companies should consider diversifying their risks by expanding into other growth areas.
8. Increased Foreign Competition
Until now, companies, especially European and American multinationals, had found in Asia a “virgin” market in which to fatten their economic balance sheets. Something that, as we have already seen in 2019, has begun to prove not to be so easy to achieve, in a trend that does not seem to be diminishing throughout 2020, but quite the opposite. New challenges will appear as Asian companies and SMEs begin to abandon their traditional role as manufacturers, and start selling their products directly to end consumers. A large number of hitherto unknown players are expected to emerge in the coming year, especially from the supply chains of multinationals in Asia. From where they will begin to sell their products at very competitive prices through online trading platforms and international marketplaces.
9. Revolution at the fairs
Some of them have even disappeared, while the vast majority are committed to introducing new advances with which to adapt to the new times. A transformation that we will continue to observe at the international fairs in 2020. In which, in an attempt to differentiate themselves, or even to survive, they will add B2C experiences or launch new services and improvements in relation to their traditional B2B strategy.
10. Recalibrating the digital
With many of them making major acquisitions, others making the leap into the physical environment and a few reaching the coveted “unicorn” status, there is no doubt about the great role that native digital companies have managed to play throughout 2019. A role that could start to have its days counted. “Investor sentiment is getting worse” in relation to almost all digital companies, the report says. Therefore, it is possible that in 2020 we will see, on the one hand, a lesser appearance of new companies, and on the other hand, the disappearance of some of them. Both as a result of a change in the parameters of investor financing and in their profitability targets.