Around the world, the fashion industry — at all levels and for all segments — is a key driver of the global economy. It generates trillions (that’s trillions 🙂 ) of dollars of revenue and employs millions of workers.
Recently, McKinsey & Company released a detailed report on the global fashion industry. Here are some of its findings:
“Fashion is one of the past decade’s rare economic success stories. Over that period, the industry has grown at 5.5 percent annually, according to the McKinsey Global Fashion Index, to now be worth an estimated $2.4 trillion. In fact, not only does it touch everyone, but it would be the world’s seventh-largest economy if ranked alongside individual countries’ GDP.”
“Yet, 2016 was one of the industry’s toughest years. Terrorist attacks in France, the Brexit vote in the United Kingdom, and the volatility of the Chinese stock market have created shocks to the global economy. At the same time, consumers have become more demanding, more discerning, and less predictable in their purchasing behavior, which is being radically reshaped by new technologies. It’s against this backdrop that McKinsey has teamed with the Business of Fashion to shine a light on the fragmented, complex ecosystem that underpins this giant global industry.”
“So what will change in 2017? No one would put money on volatility and uncertainty lessening. Nonetheless, our report finds that fashion companies are hopeful they can improve their performance through a combination of organic growth and leveraging new technologies. Successful companies will invest more to nurture local clientele: 2017 will be the year of organic growth by deepening relationships with existing clients, rather than through geographic, channel, and store-network expansion. And digital innovation will go behind the scenes: digitization will be the key to supply-chain efficiency, lowering procurement costs, and the enhancement of sourcing opportunities.”
To access the full report, click on the image below.
I found it very interesting that the fashion industry has taken a large hit in 2016. I do understand that globally there has been volatility in the economy but overall I would not have predicted 2016 was 67 percent worse for the industry. It seems since the world economy has not been on its best behavior, and the fashion industry being a volatile one there is little room for companies to profit off of. Overall with the technological advances such as digital innovations companies should really hope this will help them spiral out of the funk that the industry is in.
It didn’t surprise me to learn that the fashion industry generates trillions of dollars of revenue into the economy. Being a key driver of the global economy, it has the ultimate pressure to keep doing well in the upcoming years. What caused the industry to fall in 2016 was due to external factors so the fashion industry couldn’t predict that. Even though they had a rough year in 2016, I believe that the fashion industry will rise again in 2017.
Honestly, it does not surprise me at all that the fashion industry is growing so rapidly and irresistible. With the wealth level increasing, people are not satisfied only by eating well. They also call for eating good-looking food. Of course, they ask for dress well. Actually, to some people, fashion is like drugs—they just cannot drop it. Maybe when you are looking at two pants, you think there is no difference. However, even 5 centimeters of the length can change how it goes with the top and the shoes. This is so called fashion. People who do not care about it will never get the enjoy.
It has NOT been growing very much. 🙂
I even think 2016 is not the only toughest year for fashion industry. Actually, since 2008, the global financial crisis, the fashion industry has fallen. HOWEVER, more and more people try to buy goods of light luxury brands such as Coach and Tory Burch which are not that expensive but still a kind of luxury one. In this way, the sales volume of Coach has increased for years. In my opinion, fashion is an industry which always focuses on cultivating consumers’ purchasing habits so that customers will consistently buy handbags or shoes even though they are in a financial crisis.
Actually, I do have confidence in the fashion industry in 2017. From a consumer’s point of view, when the economic environment is disappointing, consumers will be more eager to purchase something that can make life hopeful and better. Something especially like fashion, with no national boundary and affordable to everyone. And with the increasing global accesses to the fashion industry, fashion company will face more new international consumers than ever before. Take the example of Alibaba’s 11.11 shopping day, the sales are increasing year by year, that means consumer purchasing power are expanding gradually.
From GAP, H& M, Zara to Gucci, Hermes, fashion industry covers a tremendous amount of target consumers. But the fashion industry is so special, that a clear positioning is crucial to a fashion brand, especially under the pressure of the tough economic environment. Some high- end brand like Burberry tried to reach more consumer by lower its price at some of its retailers and some special holiday seasons but comes up with a problem of losing its original consumer group. Since price can be an important factor to influence consumers’ perception towards brand quality, especially for high- end brands, so I think it would be a bad idea to lower the price to stimulate sales for high- end fashion brands, even under bad economic environment. But some high- end brands have announced their secondary brands like Miu Miu, Marc by Marc Jacobs, See by Chloe. They’ve lower price compared with their main brands and younger target consumers, yet they still have similar design styles with their main brands, which can help their main brands reach more consumers. Smart market strategy under special environment can save brands image in some ways.
An interesting fact stated in this article is that the fashion industry would be the world’s seventh largest economy if it were ranked alongside other country’s GDP. I knew the fashion industry was huge but this statistic is incredible and demonstrates just how powerful the industry really is. The fashion industry has faced hardships due to uncontrollable events such as economic downturns and the recession of 2009. But there is hope for the industry given the outlook for 2017.
I have confidence in the fashion industry for 2017. While they did not meet this year’s expectations, they were simply unaware of other external factors that affected this loss. The fashion industry is one of the leading in the world, so I have hope that it will continue to thrive in the upcoming year. A huge factor as to what might be causing this draught could also be people’s desire for higher brands. People are developing a trend where they have to have the best of the best, so they save their money up in order to do so. Middle class people are beginning to stop spending their money on lower brands so that they can save up for ones that exceed society’s norms. In 2017, however, i have confidence that corporations within the industry will make note of this change and develop new strategies to improve their personal performances, while will in turn raise the revenue for the industry as a whole.
I have strong confidence of fashion industry in China, even though bad things happened a lot this year, but the fashion industry in China had been to a transformation, from company organization to brand value, i am amazed by the speed of their changing. Time will tell, let’s see.
Uniqlo, Japanese casual wear designer, is a good example of using new technologies to improve its performance. Its HeatTech Collection has the innovative heat-retaining technology and could really help people feel warm to the core in the cold winter. Instead of guessing the unpredictable style trend, Uniqlo uses new technology to satisfy the most basic need for clothing.
I do believe the Fashion Industry has room for growth in 2017. From a buyer’s perspective, when the monetary environment is frustrating, customers will be more enthusiastic to buy something that can improve their looks and quality of life. Only when the economy is not in a recession, of course. Something particularly like mold, with no national limit and moderate to everybody. What’s more, with the expanding worldwide gets to the form business, design organization will confront more new global buyers than any other time in recent memory. Similar, to Amazon’s weekly fashion deals it hosts that drives consumers to purchase!
According to Maslow’s hierarchy of needs theory, fashion products corresponds to high level needs. When economic recession, the needs of fashion products will decrease. I think, by using new technologies, fashion brands can advertise themselves more and give a subtle influences on people gradually. Maybe more and more people will recognize fashion products as their basic needs just like foods. Then the future of fashion brands will be bright.
I never thought about how the events from this year would effect the fashion industry but considering some of the biggest/ most tragic events occurred in the fashion capitals of the world it does make sense. But as the article states, fashion incorporates all ages genders and cultures so I don’t think they’re will be a problem recovering in the new year.
The Fashion industry has taken a hit in 2016, along with other industries. It is possible that people are seeking a more economical way of shopping, whether it is department sales at Macy’s or a TJ Maxx type of place. There is much less emphasis on style in 2016 in terms of it being expensive. Consumers ultimately see fashion as less of a statement as in past years. However, this industry is very important to the consumer, so I expect the sales to rise in 2017. Tastes and preferences change so often, so once there is a new style, the sales will shoot back up.
Fashion industry has been in growth these years due to the increasing frequency use of the social media where bloggers or influencers promote fashion products from clothing to accessories. Therefore, even though the growth will slow down a little bit, the increasing trend will continue in the long run.
Yes, fashion industry produces a lot of revenue. Toer of fact, increase their sales, they really try hard on investigating consumer behavior as well as consumer purchase intention. As a matter of fact, they earn a lot even they have huge sales because of the volume will increase.
They also have color for the year which gives the reason to buy. It also ends up with purchasing. As the google provided, the PANTONE Color of the year is the blending of Rose Quartz and Serenity. “Greenery” is the color for the next year.
Honestly, I am not surprised to see the fashion industry take a big hit this year. The Brexit vote, terrorism, and the Chinese stock market have all played a huge impact. What was most interesting to me was that in the report, they made a point about discounts. Sales and discounts are the new normal, so people are buying less and less products at full price.
Because the fashion industry is so large, it does not surprise me that it took such a hard hit this year. I personally cannot say how the economy will change in the upcoming year, so i dont know how the fashion industry is going to respond. I feel as if it may do well, but again I’m not sure. The projected outcome is hopeful but we/ll just have to wait and see. Digital innovation will definitely have a large impact on he industry.
Digital marketing provides a great opportunity for fashion industry while it also causes more fierce competitions. Fashion brands have implemented diverse strategies and they keep modifying. So I think fashion industry can survive from these external situations because ladies are always crazy about fashion and purchasing desire will not go down.
2016 became one of the toughest years for industries for there were many issues like terrorist attacks; Brexit vote to lead to the great shocks to the global economy. Even fashion industry contributes a lot in today’s economy; it is hard to predict the performance of fashion industry in the upcoming year. I think what they should do is focus more on improving design and technology to attract more potential customers, also keep the client loyalty. By well using the digitization to improve supply-chain efficiency, and the enhance sourcing opportunities.
It only makes sense that the fashion industry would be able to generate trillions of dollars in revenues, given the nature of the industry. The fashion industry takes a basic human necessity (clothes), and revolutionizes it for the everyday consumer. It creates a variety of product choices for the consumer, so their purchase aids in creating their identity and expressing themselves. Fashion therefore creates an expressive platform for its consumers, as well as a perishable one, since new fashion trends emerge almost every day. This requires those consumers who are invested enough to want to continuously buy more and more fashion products, regardless of the amount of product waste this may cause. It was surprising to me, however, that the fashion industry took a hit in 2016, but with awareness to technological advances and the industry’s ability to adapt, the industry should be able to bounce back, eventually.
Although the fashion industry was hit hard this year, it has expanded so much in the past several years since the Recession in 2008-2009. The fashion industry relies a lot on consumer confidence and it has grown tremendously since 2009. The industry is always evolving as new technology and new trends hit the market. Although it was not as great of a year in 2016, it was still a great year compared to how the industry was 7 years ago.
I do believe the fashion industry generates a fair amount of revenue, but I also believe that in the most recent times consumers are being more careful with how their money is spent. Being more thrifty, the industry has been in constant competition, especially during the holiday seasons. The fashion industry has definitely conned many consumers throughout the years, by tricking them into believing that clothes are more than just a necessity.
I find the Fashion Industry to be absolutely fascinating because my mom works in the industry. She is always telling what is going on in the industry and how it is always changing. One of the greatest innovations that I believe will have a great affect in 2017 is 3-D printing. This one of the most up and coming innovations that many companies are exploring. This will allow for new jobs, it is environmentally friendly, and will allow companies to be more effective. As new technologies advance they can keep up with the high demands of consumers who care unpredictable in there wants.
I think that although all of this happened in 2016 hurt the fashion industry, I believe that in 2017 things will improve. The main reasons why things got so bad for the fashion industry is because perhaps the industry wasn’t expecting it. A lot of the factors that impacted it greatly are external factors, like terrorism, that the industry couldn’t predict or avoid. I believe that it will be better in 2017 because the industry knows what could happen and has made efforts to not let what happened in 2016 happen again. Additionally, people’s mindsets are changing and people now are realizing that they want to have high-quality things and are saving up to buy themselves nicer things than previously. Many low-quality brands are raising their prices so some people would rather save up for longer and spend their money on higher-brand items.