Fashion faces many challenges in 2022 – Prices will rise

The combined effect of the supply chain crisis at all ports and ground transportation delays due to a lack of sufficient drivers leads fashion executives to raise prices for fashion clothes by 3% l next year, according to The Business of Fashion and McKinsey and Co. That doesn’t stop 15% of executives surveyed from saying they will increase clothing prices by more than 10%.

Inflationary pressures are caused by a combination of material shortages, transportation bottlenecks and rising shipping costs, according to the report. The study interviewed more than 220 fashion executives and experts.

The report does not mention the possibility that some fashion items are arriving too late for the holiday sale and stores may be forced to markdown these new arrivals after the holidays in order to find customers. This can keep some prices at a manageable level.

Many retailers like Walmart

, Best buy

, Macy’s

, and others have anticipated price increases and placed substantial orders earlier in the year for their holiday sales. While stocks were heavy at the end of the 3e fiscal quarter, this action gave large companies the assurance of a good stock market position for the critical holiday season which began this year on November 1, 2021.

Another factor to consider is the growth in sales of recycled clothing. The demand for second-hand clothing is growing, and while it currently represents less than 10% of the global textile market (according to Textile Exchange), recycled clothing is expected to become mainstream in 2022. This new trend is “social commerce” and encourage customers to proudly display fashion labels.

There have been two years of disruption. The fashion industry recorded a decrease of -20% in 2020 compared to 2019. 69% of companies were value destroyers in 2020 according to the McKinsey Global Fashion Index (MGFI); this compares to 61% in 2019 and just 28% in 2011. About 7% of all companies have left the market completely, either because of financial difficulties or because they were bought by competitors.

Taking all of this into account, there are ten themes that The Business of Fashion says are critical in 2022 for the fashion industry:

1. Uneven recovery. The shock linked to Covid-19 will be uneven depending on the consumer markets.

2. Logistical blockages. The disruptions of 2021 will continue.

3. The luxury opportunity is domestic. While travel will return regularly, international tourism will take until 2023-2024 to rebuild.

4. Restarting the wardrobe. After focusing on loungewear and sportswear for two years, there is a pent-up demand for new wardrobes.

5. Metaverse state of mind. As consumers spend more time online, virtual fashion will create new communities that will influence brand choices.

6. Social shopping. There is a wave of social shopping that will continue.

7. Circular textiles. The fashion industry is now in the recycling of clothes. They will be deployed on a large scale.

8. Product passports. Brands use “passports” to share product information with consumers and partners to authenticate their brands and protect sales.

9. Cyber ​​resilience. As the digitalization of fashion reaches new heights, it faces more and more cyber attacks. The brand must strengthen its defenses.

ten.Talent crisis. Businesses need to rely on brand appeal or fashion appeal to attract and retain talent in a tight job market.

POST-SCRIPT: Leaders in the retail industry must act quickly to protect their leadership roles. New fashion has always been a source of enthusiasm for customers and has attracted many people in the past. Brands have to be forward thinking to be successful. All the more so nowadays as the environment is hostile; the new Omicron variant of the coronavirus is scary and will delay the shopping sprees of many customers. This can make this Christmas shopping season even more uncertain.

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