Highlights from the State of Fashion 2024 Report 📝
A new report from McKinsey and The Business of Fashion shares key insights for fashion industry players to consider heading into 2024
Yesterday, the Business of Fashion, in partnership with McKinsey, released their annual State of Fashion Report during a livestream with Imran Amed, Founder and CEO of The Business of Fashion and Achim Berg, Senior Partner at McKinsey & Company. I tuned in so you didn’t have to. Here are my notes:
2023 was a year of weaker growth in terms of GDP and this has had an impact on consumer momentum
Although we bounced back after Covid, Fashion sales in ‘22 and ‘23 slowed across geographies
The top 20 fashion businesses generated more than 80% of the value in 2022
Post-Covid we have a more profitable industry driven mostly by luxury
There are a number of businesses that had a great run but many are not profitable or even destroying value (a term used to describe whenever the enterprise value of the company decreases)
Consolidation is to be expected in the years to come
Among executives, there is less consensus than previous years about the outlook for 2024
We’ve seen the peak of inflation but interest rates will take time to come down, The world is not in party mode; there’s a lot to be concerned about globally
Fashion executives are most concerned about geopolitical instability in 2024, followed by economic volatility and inflation
Prices for goods will likely go up: 69% of executives plan on raising prices in 2024 (Chanel and LVMH have already done so)
For the first time, climate urgency is among 10 key themes industry players should be paying attention to in 2024. Climate urgency will impact not only consumer behaviour but also supply chains
Vacation Mode is a key consumer shift: people are looking for experiences rather than things
Influencer culture is shifting; Video is more important than photos and brands will have to hand over more creative control than ever before if they want to collaborate with influencers
Outdoors Reinvented- This goes hand-in-hand with the Vacation Mode theme. again, it’s an emphasis on experiences and a revival of the outdoors category. Outerwear is informing fashion and fashion is informing outerwear (hence the term “Gorcore,” the hiking-inspired aesthetic).
Generative AI is clearly going to impact fashion. While previous hype cycles came and went (e.g. the Metaverse), AI is much bigger and will massively inform sales forecasting and other areas across the value chain
Despite our grievances fast fashion, 40% of American consumers shopped at Temu and Shein this year
Brand is more important than ever before. Expect to see more brand-building events and fashion shows in crazy places
Sustainability rules - the industry is not good at self-regulation, and the environmental and social commitments that have been made will not be met unless regulators step in. Sixteen bills in Europe will come into play in the coming years to regulate the industry. It’s a dangerous strategy to wait.
Download the Business of Fashion’s State of Fashion 2024 Report here.
Thank you for this report, as someone who is building my own brand, I found some of the points very insightful! 🙏