McKinsey&Company
Three big challenges in fashion
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Dressed to impress. After two-plus years of staying in, consumers are ditching the sweatpants in favor of party dresses and tailored suits. As people return to in-person socializing, major brands in America and Europe are seeing a rise in the demand for nice clothes. Consumers have a lot to shop for: in the US alone, around 2.5 million weddings are scheduled for 2022. One company that rents out designer clothes reported a doubling of sales in the first quarter of 2022. [Bloomberg] |
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Borrow or buy? As people become more ethical consumers, paying to wear a stranger’s clothes no longer raises eyebrows. In the UK, renting clothes isn’t as popular as it is in the US, but that may be changing. In 2021, 27% of UK consumers said they were interested in renting apparel, up from 22% a year prior. One London-based clothing rental app recently received $3 million in funding to expand to new markets. Globally, the sharing economy (including peer-to-peer rentals of consumer goods) could total $1.5 trillion by 2024. [FT] |
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Looking for luxury. The fashion industry is facing a raft of challenges, including conflict in Europe, the COVID-19 crisis, and continued high inflation. But despite economic headwinds, consumers are raring to spend on high-end fashion, with very strong demand for luxury so far, says McKinsey’s Achim Berg. Companies are ready to dress consumers for celebrating and entertaining, and categories that were hit hard throughout the COVID-19 pandemic, such as high heels, dresses, and suits, are as of now making a strong comeback.
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A global shake-up. Travel picking up in Europe, North America, and parts of Asia will affect consumer spending. However, the recovery of fashion will highly depend on how long the war in Ukraine lasts. If energy prices and cost of living continue to increase, consumers could return from their summer vacations feeling pinched by budgets, which might put a damper on large parts of the fashion industry, says Berg. Explore how global trends are shaking up the fashion industry and what companies can do to adapt. |
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| — Edited by Belinda Yu |
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