Year 2021 is likely to be the worst for the fashion industry since the Great Depression, says Achim Berg, Senior Partner and Global Leader, McKinsey & Co, and author of ‘The State of Fashion 2021’ report published jointly with Business of Fashion. The pandemic has accelerated demand for athlesiure, adds Anita Balchandani, Partner, McKinsey-London and Co-author. It has also boosted digitization across the industry with nearly 40 per cent of all sales currently being generated from digital channels, she says.
As per Berg, the pandemic provides fewer occasions for dressing up. Hence, consumers’ clothes have become much more causal. The ban on international travel has also shunted demand for luxury fashion, she adds.
Widening product choices
Another change caused by the pandemic is in product choices. Consumers have become more open to new brands, particularly online startups. Also, there is growing affinity towards casualwear, says Balchandani, However, the post pandemic world might rival in demand for occasion wear as a more hybrid work culture is evolve across the world
The industry has been gravitating towards sustainability for a while now. People are realizing the need for buying lesser clothes. However, the industry still needs to do a lot to reduce its carbon emissions, opines Berg. Fashion businesses need to reshape business operations on a number of different dimensions, adds Balchandani.
Pivot to Asian brands
Balchandani believes, it has become easier to launch a brand today. However, their expansion has become difficult, she adds. On the other hand Berg says, though digitization has facilitated the growth of many online fashion brands, it has limited opportunities for young designers.
Online platforms are helping consumers connect with emerging Asian brands. The market is becoming more globalized with the discovery of new brands. However, China still drives most of the demand, particularly for luxury goods, adds Berg.
Redistribution in players’ market share
Berg rues, fashion shows are becoming less important with emerging new social media platforms. She advises the industry to hold more physical shows to enable brands exchange their views on fashion.
Balchandani does not expect the industry to recover completely even this year. She says, brands need to increase delivery speeds and stay attuned to customers’ changing demands. They also need to focus on sales markets and channels. In future, the market share of brands is likely to be redistributed with better-positioned players ending up with a larger slice of the pie, she adds.
The crisis provides brands an opportunity to be much more digitized, agile and flexible. They need to explore these opportunities to set new standards in the industry, concludes Berg.