2022 projects a year of optimism despite the overspill of crisis and uncertainty from 2021. According to BoF and McKinsey & Company, 75% of luxury executives, 61% of mid-market executives and 50% of value executives expect better trading conditions in 2022 than 2021. As businesses look for new and evolving growth streams and untapped revenues, new opportunities tying in digital channels, sustainability and consumer engagement become vital alongside margin increases to aid sales growth. We dive into the key strategies that are set to impact the fashion industry and influence executive decision making.
“The fashion industry faces a complex mix of challenges and opportunities, in which there is little room for missteps. Decision makers have their work cut out to manage the demands of digital, sustainability, and the supply chain.”
Cutting-edge supply chain management, led by technology, addresses one of the toughest challenges alongside the pandemic - ironing out supply chain issues as companies remodel their local and international decision making in a move toward transparency and flexibility.
Blockchain technology inspires an uptick in traceability with authenticity appealing to consumers as companies track their sustainable and ethical commitments. Business Wire reports the growth of blockchain in supply chains, rising from $253 million in 2020 to $3 billion by 2026 as executives make blockchain a priority, addressing rapid consumer demand. Emerging use of blockchain was flagged at the end of 2021 with Kering’s V.I.R.T.U.S platform measuring the social and environmental impact of various brands under their eyewear category umbrella, encouraging like-minded cross-collaboration and innovation across the group. This highlights the use of blockchain as a key growth strategy beyond supply chain management.
Consumers are proudly wearing their beliefs on their sleeves and are becoming more vocal - whether ethical, political or sustainably minded. Purposeful products and campaigns coincide with consumer values as call-outs of societal inequality and greenwashing encourage a move toward more authentic and conscious design. A surge in new year resolution switches to veganism influences fashion, diet and lifestyle choices as consumers demand quality and ethical materials, prioritising shopping by values. Inclusive campaigns forefront unapologetic self-expression and being a voice behind important issues through driving awareness and change through purpose-led product releases.
Additionally, data-driven decisions adjust inventory mixes, steering product development as assortments are moulded to consumers' hybridised lifestyles as home, work and leisure continue to intertwine.
Circular strategies driven by sustainability are expanding as companies invest in and embed closed-loop systems and large-scale collection and sorting processes, reducing plastic waste and the production of more raw virgin materials. Prada and Adidas have already kicked this off in the new year with their Re-Nylon collection pivoting Prada’s manufacturing to the use of the Re-Nylon textile. Not only are brands implementing new practices, they’re also becoming more transparent about their supply chain and the internal targets set, taking accountability and responsibility for their ecological impact. 2022 may even be the year where unsustainable practices will come with legal and financial consequences as governments begin to monitor how fashion businesses operate, marking the end of greenwashing.
Circularity across the product lifecycle continues to boom as resale and rental markets flourish, and the creative use of deadstock uptrends. The luxury market spotlights archival pieces with story-telling at the forefront, using blockchain technology to prove authenticity and reveal the product’s history.
Clothing brand Weird Fish has partnered up with sustainability platform Green Story, in introducing environmental impact metrics to their website, enhancing transparency with its customers on the positive environmental impacts of the products.
With the metaverse being the latest technology buzzword following Facebook’s Meta rebrand, the societal revolution with real-world cross-overs offers digital avatars, conceptual virtual commodities and customisable gaming narratives. Although the metaverse is currently inaccessible for many consumers, and technologies behind the virtual world are still under development, BoF and McKinsey & Company highlight digital channels are an essential growth strategy. As businesses explore untapped income streams, like the NFT and gaming market, they drive consumer engagement.
Traditional pricing methods of tangible products do not apply in the metaverse, with pricing based on value and community support, which spotlights branding and collaboration as a tool to drive higher value. Although, as the industry develops their phygital footprint, digital scrutiny comes into play as new European rules are introduced in 2022, offering consumers protection and a ‘legal guarantee’ when purchasing products with a digital element.
Marketing strategies focus on new forms of creativity, centring community-building with flexible plans as customisable story-telling effortlessly passes control over to the consumer. Generation Z and Alpha have grown up in a world of hyperconnectivity with brands demanding their attention constantly across real and virtual worlds, compelling conversational marketing to stand out in a highly competitive marketplace. Players will need to use their analytics to expand their customer insight, testing social media livestreaming and augmented reality try-on technology with modifiable strategies to accelerate brand differentiation. Self-sufficiency harmonises with community-based values as customisation kits and interactive, immersive experiences centre individualism and uniqueness while rooted in like-minded connection.
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