Taking inspiration from the industry leaders at Fashion Collective London’s Fashion Business Workshop, Rachel Parker looks at the key business trends experts have identified in the industry for 2018, and considers what the future holds for the fashion economy.
While global economic uncertainties have caused disruption for many industries in the past few years, it seems that the future looks positive for fashion businesses. The Business of Fashion and McKinsey & Company report on ‘The State of Fashion 2018’ predicts that industry sales will grow by 3.5 to 4.5 percent this year, especially in the emerging markets of Asia and Latin America. The main trends that will define the fashion industry this year have been initiated by the development of digital technology. The report indicated that the unstoppable growth of digital innovation is set to continue, radically changing the way we produce, buy and sell clothes.
When this crucial element of technological development is considered, it’s no surprise that Asian markets are set to overtake Western businesses in the coming years. Asia is home to two- thirds of the world’s fastest growing ecommerce start-ups as well as many technology innovations, and its markets account for over half of global online retail sales.
Another development for fashion retailers is the increasing importance of smartphone shopping. The convenience of mobile browsing and e-wallets means that consumers are now looking to their phones to buy clothes. When it comes to online shopping, mobile traffic has overtaken desktop, with customers spending an average of six hours per week looking at fashion items on their phones. Consumers expect fashion companies to ensure that their mobile platforms are as strong as their online portals, and that mobile transactions are as seamless as possible.
A major theme for fashion businesses is the rise of personalisation and curation, with customers now focused on seeking individuality and authenticity from the brands they buy. Digital data trails are facilitating this growth, allowing companies to gain insight into what shoppers want and to tailor what they market directly to each customer. This means more customised items, personalised recommendations and individualised marketing strategies.
Meanwhile, Business of Fashion predicts that 2018 will be the year that fashion brands seriously begin to build relationships with online shopping platforms such as Amazon, where 55 percent of customers begin their product searches. These platforms present a wider range of items and allow easy comparison, as well as offering high levels of customer service and convenience. With Amazon set to become the largest apparel retailer in the US this year, it’s no wonder clothing brands are considering how best to collaborate with online platforms and grab their share of the market.
Another key development in fashion’s relationship to the digital world is the emerging emphasis on artificial intelligence (AI). The possibilities of AI to reduce costs and increase speed and flexibility have endless repercussions for the way that clothes are designed, produced and marketed. According to the Business of Fashion report, 75 percent of fashion retailers intend to make investments in artificial intelligence during 2018 and 2019. Many companies have integrated chat-bot functions onto their websites, which allow customers to access 24-hour support and advice. Meanwhile, clothing stores are using sensors, digital mirrors and customer identification software to create a more stimulating experience for shoppers.
With the constant development of technology such as artificial intelligence, data analytics and mobile platforms, the way we shop is about to radically change. In the emerging digital landscape, it seems that the companies who can adapt to new technologies and use data insights to deliver shopping experiences adjusted to each customer will be the ones to thrive
All images via Pexels
All statistics via ‘The State of Fashion 2018’ – The Business of Fashion and McKinsey & Company.
You can find Rachel on social media with @rachelfrances_