Diving into the State of Fashion 2024
The fashion industry faces an unprecedented blend of challenges in the wake of geopolitical turmoil, climate adversities, and persistent inflation, creating a turbulent market landscape.
The recently released State of Fashion 2024 report, jointly developed by McKinsey & Company and Business of Fashion (BoF), delves deep into the impacts of these dynamics and anticipates the upcoming trends and hurdles. Let's go deep into the 10 trends that will define the industry and the opportunities for growth in 2024!
GLOBAL ECONOMY
Fragmented Future
In 2024, the global economic outlook will likely continue to be unsettled. As new and ongoing financial, geopolitical, and other challenges weigh heavily on consumer confidence, fashion markets in the US, Europe, and China are facing differing headwinds, requiring suppliers, brands, and retailers to bolster contingency planning, among other measures.
Climate Urgency
The frequency and intensity of extreme weather-related events in 2023 mean the climate crisis has become even more visible, leaving the fashion value chain especially vulnerable. With climate risks worsening across continents, the fashion industry can’t hold off any longer on building resilience into its supply chains and helping to abate emissions.
CONSUMER SHIFTS
Vacation Mode
Consumers are gearing up for the biggest year of travel since before the pandemic. But a shift in values means travelers have a different set of expectations, even as shopping remains high on the agenda. Brands and retailers should consider refreshing distribution and category strategies to meet travelers wherever they are.
The New Face of Influence
It’s time for brand marketers to update their influencer playbooks. A new guard of creative personalities is gaining brands’ attention, winning trust and fandom among key audiences. Working with these personalities in 2024 will require a different type of partnership, an emphasis on video, and a willingness to relinquish a degree of creative control.
Outdoors Reinvented
Technical outdoor wear has been propelled by consumers’ post-pandemic embrace of healthier lifestyles as well as “gorp-core,” and is likely to accelerate even further in 2024. More outdoor brands will likely launch lifestyle collections while lifestyle brands embed technical elements into collections, further blurring the lines between functionality and style.
FASHION SYSTEM
Gen AI’s Creative Crossroad
After generative AI’s breakout year in 2023, use cases are emerging across creative industries, including fashion. Capturing the value of this transformative technology in 2024 will require fashion players to look beyond automation and explore its potential to augment the work of human creatives.
Fast Fashion’s Power Plays
Fast-fashion competition will likely become even fiercer in the year ahead. Challengers, led by Shein and Temu, are changing tactics around price, customer experience, and speed. Success for disruptors and incumbents will likely hinge on their ability to adapt to evolving consumer preferences, while navigating regulations that may impact the industry.
All Eyes on Brand
Brand marketing will likely be back in the limelight in the year ahead as the fashion industry confronts a shifting landscape in which performance marketing no longer reigns. Consumers’ emotional connections to brands will likely be critical as fashion marketers reorientate their playbooks to emphasize long-term brand-building strategies.
Sustainability Rules
The era of the fashion industry's self-regulating sustainability is drawing to a close around the world. Across jurisdictions, new rules could have a widespread impact on both consumers and fashion players. Brands and manufacturers need to revamp business models to align with the changes ahead.
Bullwhip Snaps Back
Changes in consumer demand have resulted in the “bullwhip effect,” where cuts to orders increase in magnitude at different parts of a supply chain, putting pressure on fashion suppliers. Now, if supply is to keep pace with anticipated renewed demand, brands and retailers should consider focusing on transparency and bolstering strategic partnerships.
