The annual McKinsey & Company State of Fashion 2018 report shows fashion sales across the world will grow in the coming year, and will be more sustainable than 2017.
The figures show an average growth of between 3.5 and 4.5 [percent (+ 4 or 5 percent for the luxury segment) for a total sales volume that could reach 2,500 billion dollars (equal to about 2,100 billion euros).
The progress should be on average one percentage point higher than the estimates for 2017, while remaining below the forecast of 5.5 percent over the long term.
According to the report, which was compiled in association with the Business of Fashion, 2017 signals the end of an era, as the West will no longer be the global stronghold for fashion sales—more than half of apparel and footwear sales will originate outside of Europe and North America. The main sources of growth are emerging-market countries across Asia–Pacific, Latin America, and other regions; they are forecasted to grow at rates ranging between 5 and 7.5 percent in 2018.
Meanwhile, the economic outlook in the mature part of Europe is stable, and fashion-industry sales growth is likewise expected to remain at a modest but steady 2 to 3 percent. In North America, while overall consumer confidence is strong, the impact of policy changes is uncertain, and markdown pressures, market corrections, and store closures continue. Here, we expect a modest growth of 1 to 2 percent.
Mainstream customers are moving into a decisive phase of digital adoption, and online sales of apparel and footwear are projected to grow rapidly. Consumers in Southeast Asia spend about eight hours a day online on average. The modern shopper’s comfort with digital channels and content has created a complex customer journey across online and offline touchpoints. But regardless of touchpoint, consumers expect a consistent brand experience across channels.
Consumers also have higher expectations of customer experience and scrutinize convenience, price, quality, and newness. Digital-first companies such as Alibaba, Amazon, Net-a-Porter, and Zappos continue to force fashion companies to provide an even more premium experience. Many consumers today expect perfect functionality and immediate support at all times, coupled with rapid delivery times as players constantly compete to expedite products.
Photo credit; McKinsey Bof 'State of Fashion 2018' cover