admin The markets of the fashion industry are unstable due to geopolitical upheaval, climate challenges and the nagging inflation.
In a post-covid climate, the challenges impacted on consumer confidence are highlighted in The State of Fashion 2024 report, collected by McKinsey & Company in collaboration with Business of Fashion (BoF).
The released report outlines ten key focus areas for the fashion industry in the coming year. The insights are drawn from two global surveys involving fashion executives and consumers.
Based on the reports, Industry experts are divided in their expectations for the next year, with 26 percent anticipating improvement, 37 percent foreseeing status quo, and 38 percent predicting worsening conditions. The forecast for industry growth is modest at 2 to 4 percent, with potential positive factors including a rebound in global tourism to levels 10 percent
above those in 2019 and opportunities arising from generative artificial intelligence (gen AI).
Consumers can expect the increase in price for both luxury and non-luxury items, with some executives stating a surge of up to 5 percent cannot be avoided.
Gen AI gained significant momentum in 2023, with 14.1 billion dollars in funding for AI- focused start-ups in the first half of the year alone. Approximately 25 percent of gen AI’s potential value in the fashion industry is attributed to its application in design and product development.
Despite high expectations, fashion executives acknowledge a substantial knowledge and talent gap in their organizations related to gen AI. While 73 percent consider gen AI a priority in 2024, only 28 percent have experimented with its use in creative processes, and just 5 percent believe their employees possess the necessary skills.
In the realm of influencer marketing, which is currently valued at 21.1 billion dollars, there is evidence of “influencer fatigue” among consumers. The report reveals dissatisfaction with the amount of sponsored content on social platforms, with 68 percent of surveyed consumers expressing unhappiness. A new trend for 2024 emphasizes authenticity over status, with
consumers favoring influencers who embody relatability (43 percent) and authenticity (40 percent) rather than a polished, aspirational lifestyle. Brands are responding by diversifying the types of talent they partner with.
The fashion industry faces a complex landscape in 2024, with challenges ranging from the transformative potential of AI to the impact of climate change.
Fashion leaders are urged to approach the year with caution while actively seeking targeted opportunities for growth and innovation.
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