Date Posted: Monday 7th December 2020
The Business of Fashion (BoF) has published its report, in conjunction with McKinsey & Company on The State of Fashion 2021. The fifth annual report forecasts the continuation of tough trading conditions next year, forcing companies to find their silver linings strategies. The report highlights 10 themes that are predicted to define the global fashion industry in 2021 and how to navigate the currents they will create.
The report looks into the following:
Living with the Virus
Covid-19 and the economic crisis is the top challenge for 2021 for 45% of fashion executives and stakeholders surveyed.
Companies should rewire their operating models to enable flexibility and faster decision-making, and balance speed against discipline in the pursuit of innovation.
Global fashion sales in 2021 could be below 2019 levels by as much as 15 per cent.
Since demand for fashion is unlikely to bounce back due to restrained spending power amid unemployment and rising inequality, companies should seize new opportunities and double down on outperforming categories, channels and territories.
71% of fashion executives expect their online business to grow by 20% or more in 2021.
As online penetration accelerates and shoppers demand ever-more sophisticated digital interactions, fashion players must optimise the online experience and channel mix while finding persuasive ways to integrate the human touch.
55% of consumers expect fashion brands to care for the health of employees in times of crisis.
As momentum for change builds alongside campaigns to end exploitation, consumers will expect companies to offer more dignity, security and justice to workers throughout the global industry
66% of fashion executives expect travel retail sales to recover their former growth levels only within 2 or 3 years.
Companies should engage better with local consumers, make strategic investments in markets witnessing a stronger recovery and unlock new opportunities to keep customers shopping.
Less is More
58% of fashion executives consider assortment planning to be a key area for data and analytics in 2021.
Companies should adopt a demand-focused approach to their assortment strategy while boosting flexible in-season reactivity for both new products and replenishment.
45% of fashion executives expect market share redistribution to be a top theme in 2021.
Performance polarisation in the fashion industry accelerated during the pandemic as the gap widened between the best-performing companies and the rest.
35% of fashion executives expect resilience and partnerships in the supply chain to be a top theme in 2021.
To mitigate future ruptures, fashion players should move away from transactional relationships in favour of deeper partnerships that bring greater agility and accountability
Approximately half of European consumers have shopped less in physical stores since lockdowns started.
Fashion players need to rethink their retail footprints and make tough choices to improve ROI at store level.
89% of fashion executives expect a hybrid model of working to be part of the new normal.
Companies should refine their blends of remote and on-premises work, invest in reskilling talent and instil a greater sense of shared purpose to their employees.
You can download the full report here.
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