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The State of Fashion 2022: What to expect in the business of fashion

by | Dec 21, 2021

As we head into a new year, we are committed to making better choices. With the ongoing climate crisis, it is essential that governments, brands and people work together to make our planet safer and happier for generations to come.

What does this mean for fashion?

The State of Fashion 2022 report published by Business of Fashion and McKinsey & Company, explores the challenges posed by the pandemic and what needs to change going forward. The authors, Imran Amed, Anita Balchandani, Achim Berg, Saskia Hedrich, Jakob Ekeløf Jensen, Leila Le Merle, and Felix Rölkens, are researchers and consultants of fashion and apparel for businesses and governments.

Two years into the COVID-19 pandemic, consumer habits have changed and industries have been hit hard by lockdowns and economic recessions. Fashion brands need to recover sales and production, as well as meet sustainability and social responsibilities in the face of growing concerns about the environment. Socio-political inequalities have been further heightened by the pandemic: countries with strong economies and good healthcare systems have been able to recover from lockdowns much faster (and limit the spread through vaccine distributions) than those with weaker economies. The report notes that, in addition to these challenges, brands need to adapt to the changes in technology.

Here are the key issues raised in the report:

Meet your consumers in various digital spaces

The past two years have signalled a drastic shift in consumer habits, with many operations moving online and consumer lifestyles changing due to the pandemic. In particular, social media’s role in the fashion industry has prompted a wave of social commerce. With brand discovery and engagement increased through social media, a study suggests 74 percent of consumers are more influenced to shop via social media. By 2027, the report estimates that worldwide social commerce sales will reach over $600 billion. “Fashion brands will need to be agile to ensure they are meeting consumers in the digital spaces where they are spending time,” the report says. Brands need to adapt to the online shift with virtual try-ons and quicker checkouts.

Be prepared for revenge shopping

The reopening of stores have led to consumers ‘revenge shopping’. ‘Revenge shopping’ occurs after a period of frugal spending as a result of individual, or global, changes in economic situations. Once economic stresses ease, people splurge on items, often luxury. While the earlier months of the pandemic saw decreased spending on unnecessary items, this has been counteracted by revenge splurges by consumers in recent months. This surge, the report suggests, can rapidly restore sales to pre-pandemic levels and recover losses occurred during the past two years. However, supply chains have been stunted due to trade restrictions caused by the March Suez canal blockage, Brexit and the closing of borders. With the slowed flow of inventory, combined with the increased demand, supply chains are needing to produce more than they can.

The fashion industry needs to ready itself for future backlogs in trade and be flexible for change with nearshoring, reshoring or in-house shipping, the report notes.

Adjust to change in tastes and demand

Brands need to adjust to changes in demand. In 2020, sales in athleisure and loungewear spiked. Changes expected in 2022 range from occasion wear to colourful bright clothing as people return to their pre-pandemic lifestyles. Trend forecaster, Geraldine Wharry, says, “During times of crisis, people revert back to shiny fabrics, bright colours, clothing that can inspire happiness”. In addition, criticism of the fashion industry created a shift to mindful consumption leading to greater sales in investment pieces.

Urgently support women

Along with disruptions to trade, the pandemic has widened inequalities. With many people losing their jobs, particularly in manufacturing industries, working class people and women are more vulnerable to poverty. According to the International Labour Organisation, women’s employment decreased by 54 million in 2020 worldwide as many women left the work force to care for children. As women make up the majority of garment workers, fashion brands need to work harder to support women, both financially with better pay, and socially through child care systems.

Be transparent and pro-environment

With growing concerns for the environment, consumers and brands shifts towards circular, sustainable fashion. In order to meet global climate change goals, brands need to make rapid advancements in technologies for separating and recycling clothing waste. The greatest change, according to The State of Fashion 2022, needs to occur in the design production of clothing with regards to end-of-use. Brands need to invest in circular technologies and materials at the start of their production process.

They need to ensure the product can be repaired, reused or, as a very last resort, recycled.

Brands need to increase their transparency, especially as consumers become more conscious. The report notes that 43% gen-zers specifically support sustainable brands. Through the use of product passports, consumers can access –  through a scannable barcode –  information of the where and how the product was made.

The next year is a vital one for the fashion industry. Not only will brands recover from pandemic-related setbacks, but in 2022 they should shift fashion towards circular, sustainable ways of production.

Read the full report here.

Image credits

Photographer | Carl Holman | @carlholmanstudio

Fashion Director | Ky Bxshxff | @kybxshxff

Stylist | Gregory Russill | @gregory_russill

Fashion Assistant | Fernando Denté | @ferdy_dente

Hair & Makeup | Teri Tomsett | @teritomsett

Female Model: @grandmasterhan @bossmodelsa

Male Model: @iamsellah @fanjam_management

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