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Making fashion fit for business
Consumers may view the fashion industry as simply the clothes they buy in store, but the broader business also encompasses footwear and accessories, the textiles required to make them, the shipping process, marketing, and potentially international distribution.
While menswear is, unusually, growing faster than women's, an industry-wide trend is seeing consumers shifting away from mid-market products. This polarization means that luxury and discount brands alike are experiencing growth.
While menswear is, unusually, growing faster than women's, an industry-wide trend is seeing consumers shifting away from mid-market products. This polarization means that luxury and discount brands alike are experiencing growth.
Now worth more than US$3trn, fashion worldwide accounts for 2% of the global GDP and provides jobs for 60 million workers. However, the distribution of those jobs may be changing as the market�s global center of gravity shifts eastward.
CHANGE TOWARDS CHINA
2018 marked the first time that over half of apparel and footwear sales originated outside of Europe and North America, instead coming from emerging markets across Asia-Pacific and Latin America.
China also continues to be the largest exporter of apparel in the world, dominating the global trade market in 2017. They're not just making the products though – they're buying them too, owing to GDP growth and a strengthening economy. This means the Asia-Pacific region now accounts for 38% of fashion sales, leaving Europe in second place with 27%.
China also continues to be the largest exporter of apparel in the world, dominating the global trade market in 2017. They're not just making the products though – they're buying them too, owing to GDP growth and a strengthening economy. This means the Asia-Pacific region now accounts for 38% of fashion sales, leaving Europe in second place with 27%.
The importance of fashion weeks will always anchor the industry in cities like London, Paris and New York. However, many western companies are now localizing their supply chains too, with two thirds of US apparel executives prioritizing speed to market and in-season reactivity.
Zara has achieved a two-week lead time for taking trends from catwalk to shop floor (traditional fashion players can take as long as 12), by basing their manufacturing in northern Spain and managing their own supply chain. Keeping manufacture closer to the stores reduces the product journey and also consumer waiting time.
While operating online opens a business up to an international customer base, return rates also average over 20% more than offline shopping. German e-commerce company Otto therefore relies upon artificial intelligence tools to provide 90% accuracy forecasts on what will sell in the next 30 days. This has also allowed them to cut overstock by 20%.
AI technologies can also analyze which items were most requested by the press and stylists, helping brands gauge those that will prove popular. By predicting an item's demand before it even hits the shelves, this can regulate manufacturing processes and reduce potential losses caused by overproduction. Kate Spade for example uses an ERP system to control stock and sample collections.
AI technologies reduce forecasting errors by up to 50%, making them extremely beneficial for improving sustainability. However, some companies are combating post-sale waste too, with For Days replacing stained or damaged shirts for consumers with recycled ones. As Americans are the most likely globally to donate clothing they no longer wear, this acts as a key differentiator for eco-conscious consumers.
While operating online opens a business up to an international customer base, return rates also average over 20% more than offline shopping. German e-commerce company Otto therefore relies upon artificial intelligence tools to provide 90% accuracy forecasts on what will sell in the next 30 days. This has also allowed them to cut overstock by 20%.
AI technologies can also analyze which items were most requested by the press and stylists, helping brands gauge those that will prove popular. By predicting an item's demand before it even hits the shelves, this can regulate manufacturing processes and reduce potential losses caused by overproduction. Kate Spade for example uses an ERP system to control stock and sample collections.
AI technologies reduce forecasting errors by up to 50%, making them extremely beneficial for improving sustainability. However, some companies are combating post-sale waste too, with For Days replacing stained or damaged shirts for consumers with recycled ones. As Americans are the most likely globally to donate clothing they no longer wear, this acts as a key differentiator for eco-conscious consumers.
Recycling Rewards
With 66% of global millennials willing to spend more on sustainable brands, clothing waste reduction practices are not only good for the planet but for business too. As 42% of fashion brands shared their supplier information last year in a bid to improve consumer transparency and promote sustainable practices, companies failing to step up will soon fall out of fashion favor – particularly in the UK, whose shoppers are the most likely to consider a brand's ethics before buying.
DEPENDABLE DELIVERY
Half of online shoppers cite ease and cost of delivery as the main factor influencing their web-based purchase decisions, while over a third consider the ease and cost of returns too. With so many market changes and new technologies being introduced, all promising to revolutionize the manufacturing process, it's important to have a shipping partner you can depend upon.
A delay in delivery to stores by even a week can drastically affect profit margins, with a product's average life cycle being limited to eight weeks. Make sure your chosen service can ship to and from all the countries you trade with, and that your logistics plan is ready to respond to the changes that will inevitably come.
DEPENDABLE DELIVERY
Half of online shoppers cite ease and cost of delivery as the main factor influencing their web-based purchase decisions, while over a third consider the ease and cost of returns too. With so many market changes and new technologies being introduced, all promising to revolutionize the manufacturing process, it's important to have a shipping partner you can depend upon.
A delay in delivery to stores by even a week can drastically affect profit margins, with a product's average life cycle being limited to eight weeks. Make sure your chosen service can ship to and from all the countries you trade with, and that your logistics plan is ready to respond to the changes that will inevitably come.
