A look inside the fashion industry

While the word "fashion" is often equated with high-end, unaffordable, exaggerated outfits, anyone who has clothes is a participant in the fashion industry. Even sectors like apparel and footwear are considered components of the broader fashion market. The fashion industry is growing steadily: it has expanded by 21 percent over the past three years, and Shopify reports that global revenue is expected to increase from $481.2 billion in 2018 to $712.9 billion by the year 2022.

However, the fashion industry is growing in different ways than it has before. A joint report created by The Business of Fashion and McKinsey & Company titled, " The State of Fashion 2019," found that industry players will need to accept that a new paradigm is forming, and some of the old rules they used to play by will not work anymore. The report elaborates:

"Regardless of size and segment, players now need to be nimble, think digital-first, and achieve ever-faster speed to market. They need to take an active stance on social issues, satisfy consumer demands for ultra-transparency and sustainability, and, most importantly, have the courage to 'self-disrupt' their own identity and the sources of their old success in order to realize these changes and win new generations of customers."

The fashion industry must adapt as consumer shopping habits continue to change. Businesses that operate in the fashion landscape and individuals interested in joining must factor market trends into their decision-making.

The Trends Shaping the Industry

ecommerce

One of the most significant changes in the fashion industry is its diversion toward ecommerce. Brick-and-mortar retailers have typically dominated the fashion landscape because people enjoy being able to physically try on an outfit before deciding whether to purchase it.

However, people also enjoy the convenience of shopping online–maybe even more than they enjoy trying on clothes in-store. Statista reports that in 2018, the online apparel and accessories market reached $102.15 billion in value, and will likely grow to $145.8 billion by 2023. Cesar Cruz, the founder, and CEO of Sebastian Cruz Couture, knew that the market was heading in this direction and decided to take a relatively unconventional approach to the industry for that reason.

"I did not want to get into the business of inventory, as managing inventory becomes another business within the business that would eat away from the margin. So we decided to go 100% online, creating a "just in time approach" where we design and stock all of our fabrics and produce as orders come which allows us to offer a level of customization for our customers," said Cruz.

"Our model allows customers to be connected with their garments as they are created specifically for them either with their custom measurements and with their customizations, while still utilizing our designs. Brick and mortar cannot participate in such an experience. Brick and mortar would make this process extremely inefficient as the customer would have to set up an appointment, or you would have to go out to them. That business model is broken."

There are benefits to operating a business online. From making clothing easily customizable by allowing customers to enter their measurements when they order, to reducing business costs by eliminating the need to pay for retail space and the upkeep that comes with it, technology can bring the fashion industry closer to running at maximum efficiency.

Big Data

Technological advancements make it easy for consumers to browse products on the internet. SaleCycle notes that 51.3 percent of traffic amongst 500 global brands came from mobile devices in 2017, accounting for 36.8 percent of sales. This trend is inconsistent with the fashion industry, where 65.4 percent of online traffic came from mobile devices and accounted for 57.1 percent of sales. It seems that many shoppers like to browse on their phones, but commit to actual purchases on larger, more interactive screens (namely, desktops).

In addition, big data makes it possible for online retailers to understand their customers better. They can analyze their spending habits, their demographics, and other factors that make it easier to market to them. Technology also makes it possible to create more customized shopping experiences. Nosto found that 75 percent of surveyed consumers prefer brands to personalized messages and offerings, and 43 percent of surveyed individuals note that personalized recommendations and promotions have influenced their purchases.

Influencer marketing plays a significant role in the fashion industry. Platforms like Instagram and Twitter make it possible for social media users to create fashion-related content that garners attention and reaches tens of thousands, if not hundreds of thousands of followers.

"Instagram allowed us to essentially create a space where we became the go-to lookbook for not only the everyday fashionista but also stylists," said Cruz. "We have had many celebrity stylists and even head of styling for big brick and mortar locations reach out to us, asking if they can use our Instagram as inspiration for them to dress their spaces.

Instagram gives businesses opportunities and visibility that may be difficult to obtain offline. Through Instagram, Sebastian Cruz Couture was able to become one of the leading digital styles in men's fashion–something that would be relatively difficult to accomplish without a social media account or internet presence.

"The days of just doing fashion runway shows in exchange for brand awareness in hopes of the new collection being a success is not scalable. People want to see and envision what the garments will look like on them/on people that look like them. Most brands do not showcase their garments like this; instead, they choose models or influencers that would never buy the brand, to begin with. We actually use our customers as our models/brand ambassadors. We do not do the traditional "influencer approach." Our customer really appreciates the fact that they can see our garments on everyday people in all shapes and sizes.

Sustainability

Retailers also need to acknowledge the growing interest in sustainability. Social Standards notes that out of the top 10 fastest-growing concerns and benefits in fashion, over half are related to environmental matters. Consumers want clothes that don't harm the planet, are plastic-free, produce zero-waste, are reusable, biodegradable, and environmentally friendly. Businesses in the fashion industry need to be sure not to cut corners. Not only do customers care about purchasing sustainable garments, but it's also the right thing to do.

But fashion's growth isn't attributed entirely to technological advancements. Hitwise Data says that fast fashion accounted for 66 percent of all online fashion traffic in the first half of 2018, as opposed to mid, premium, and luxury brands. As certain kinds of fashion become more in-demand, some businesses turn to cheaper sources of labor: children. The Global Campaign Coordinator of Stop Child Labour, Sofie Ovaa, says :

"There are many girls in countries like India and Bangladesh, who are willing to work for very low prices and are easily brought into these industries under false promises of earning decent wages."

The World Counts reports that 200 million children around the world are engaged in child labor—120 million of them in hazardous conditions—and many of them make textiles and garments that are sold in American, European, and other markets. Companies such as H&M, Forever 21, New Look, GAP, Nike, Zara, Aldo, Urban Outfitters, Adidas, Primark, Uniqlo, Walmart, Victoria's Secret, La Senza, and Aeropostale have all been involved in child labor scandals, so it is imperative that new and existing fashion businesses vet their suppliers and look out for sub-contracting.

The Cutting Edge of Innovation

Current and emerging players in the fashion industry would do well to pay attention to the trends shaping the industry and factor them into their business models. When companies enforce ethical practices, care about the environment, leverage new technologies, and listen to what their customers want, they are more likely to experience success.