Equally, consumers and advocates are calling for the industry to become more inclusive. In fact, not only does it touch everyone, but it would be the world’s seventh-largest economy if ranked alongside individual countries’ GDP. At the opposite end of the price spectrum is Primark, whose commitment to its core value proposition has made it a formidable competitor. 2. Regardless of size and segment, players now need to be nimble, think digital-first, and achieve ever-faster speed to market. Sales of the traditional fast-fashion sector have grown by more than 20 percent over the last three years, and new online fast-fashion players are gaining ground. But we are now detecting glimmers of hope: executives report optimism (even amid uncertainty), and the McKinsey Global Fashion Index forecasts industry sales growth to nearly triple between 2016 and 2018, from 1.5 percent to between 3.5 and 4.5 percent. Just as China inched through recovery, outbreaks worsened in Europe and the United States. View Asha Boyed’s profile on LinkedIn, the world's largest professional community. Moreover, precrisis levels of activity are unlikely to return before the third quarter of 2022. That translates into a significant increase in the number of companies that are “value destroyers,” which we expect will rise to 73 percent of those in the index in 2020, compared with 60 percent in 2019. Meanwhile, some of the shifts we will witness in the fashion system, such as the digital step change, in-season retail, seasonless design, and the decline of wholesale, are mostly an acceleration of the inevitable—things that would have happened further down the road if the pandemic had not helped them gain speed and urgency now. At the same time, we are likely to see more nuanced assessments of store ROI based on a combination of digital and physical lenses. McKinsey analysis, 2019. 7 Many consumers today expect perfect functionality and immediate support at all times, coupled with rapid delivery times as players constantly compete to expedite products. 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. COVID-19 lockdowns also have led to an uptick in first-time e-commerce shoppers—14% of consumers in the US and 17% in China bought fashion online for the first time because of the pandemic. A survey of fashion sourcing executives reveals their immediate response to the crisis, and details strategies to reshape sourcing for a demand-driven, sustainable future. The fashion industry’s economic profit rose year-on-year by 4 percent in 2019. 11 Use minimal essential A growing number of publicly traded and private companies have become “value destroyers.” The midmarket in particular is in the doldrums, generating negative returns for shareholders. 11. No company will get through the pandemic alone, and fashion players need to share data, strategies, and insights on how to navigate the storm. In 2016, the 8.0 to 8.5 percent growth for athletic wear is more than double any other category. 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. For those leaning forward and willing to help design the new features of the modern fashion system, the opportunities at hand to truly connect with fashion consumers across the globe have never been greater. And “woke” consumers are also pushing for greater transparency into supply chains—and rewarding their favorite brands for taking controversial political stands. They should bear in mind the three trends that we believe will shape the 2017 fashion industry: the global economy, consumer behavior, and the fashion business model. We expect a period of recovery to be characterized by a continued lull in spending and a decrease in demand across channels. 2 Das sind Erkenntnisse aus dem Coronavirus-Update zum „State of Fashion 2020“-Report. Explore our Insights page to filter by industry.  By segment, the most positive are executives from luxury brands, reflecting their strong growth trajectory in 2018. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. 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. McKinsey Quarterly McKinsey analysis, based on data from Amazon and Stackline. We strive to provide individuals with disabilities equal access to our website. Imran Amed, the founder, editor-in-chief, and CEO of the Business of Fashion, is an alumnus of McKinsey’s London office, where Anita Balchandani is a partner and Jakob Ekeløf Jensen is a consultant; Achim Berg is a senior partner in the Frankfurt office; Saskia Hedrich is a senior expert in the Munich office; and Felix Rölkens is an associate partner in the Berlin office. Digital disruptors will face more cautious investors in the year ahead. In fact, 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. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Banks in Africa could lose between $1.5 trillion to $4.7 trillion in revenue in four years to 2024 arising from Covid-19 economic turmoil, according to a survey by McKinsey.. By causing blow after blow to both supply and demand, the pandemic has brewed a perfect storm for the industry: a highly integrated global supply chain means that companies have been under immense strain as they have tried to manage crises on multiple fronts as lockdowns were imposed in rapid succession, halting manufacturing in China first, then Italy, followed by countries elsewhere around the world. We use cookies essential for this site to function well. This is in stark contrast to the fashion industry’s performance over the previous decade, which saw the industry expand at 5.5 percent annually. The authors wish to thank Robb Young, the Business of Fashion’s global markets editor, for his contribution to this article. Most transformations fail. Earnings before interest, taxes, and amortization. Although the duration and ultimate severity of the pandemic remains unknown, it is apparent that the fashion industry is just at the beginning of its struggle. McKinsey State of Fashion 2021 Survey; McKinsey analysis. One size will not fit all. But equally, there is no call for rags just yet. cookies, McKinsey_Website_Accessibility@mckinsey.com, UN chief says coronavirus worst global crisis since World War II, Coronavirus offers ‘a blank page for a new beginning’ says Li Edelkoort, The State of Fashion 2020: Coronavirus Update, the outlook for the global economy is less rosy, 2019 Apparel Chief Purchasing Officer Survey, a potential shake-up of global value chains, moving into a decisive phase of digital adoption, consumers expect a consistent brand experience, a shift in focus to a customer-centric model, consumers have become more demanding, more discerning, and less predictable in their purchasing behavior. A return to the riches of the previous decade appears unlikely. Anita Balchandani is a partner in McKinsey’s London office, where Shrina Poojara is a consultant; Achim Berg is a senior partner in the Frankfurt office; Saskia Hedrich is a senior expert in the Munich office; and Felix Rölkens is an associate partner in the Berlin office. Takeaways: The new State of Fashion 2021 report is based on two McKinsey fashion scenarios: a more optimistic “Earlier Recovery” scenario predicts that global fashion sales will decline by between 0 and 5 percent in 2021 compared to 2019, and a “Later Recovery” scenario would see sales growth decline by 10 to 15 percent next year compared with 2019. A whole is embracing new opportunities—even as dangers lurk slightly below the predicted rate for 2019 domestic will. Continues to hover in a Post-COVID 2021, fashion will face more cautious investors in the COVID crisis ” 11... The Zeitgeist or have the courage to “ self-disrupt ” will emerge as winners iPad, or Android device players... 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