Apparel manufacturers and retailers seeking to grow their own business in this segment, just need to look at how they can change and adjust to keep up with the market in 2017. The following are some predictions for what producers and retailers need to lookout for in the apparel industry in 2017. A Fibre2Fashion report.
Today's consumer is better educated, well connected, more demanding and better aware of standards and quality, and yet maybe more unpredictable. Nowadays, consumers altogether choose mix components from various brands and designers, and shop more broadly than they used to. The driving forces behind these behavioural changes are the availability of information, accessibility of brands, the desire for personalisation, and connection to established values. With brand promiscuity on the ascent and more purchasers inclined to shop across market segments, the market is turning out to be increasingly complex for brands that have depended on traditionally loyal customers buying from a segment of products.
New technologies are regularly coming online with the potential of opening new genera of associations with purchasers. Virtual reality is a major theme, with some companies taking off immersive fashion show access, whereas others are developing their mobile payments infrastructure. As consumers engage with technology to improve their shopping behaviour, brands can also use this to their benefit and further gain insights about their consumers.
In 2017, the winners will likely be those companies that invest in the right technology to help them comprehend and serve their customers, and knock into their present neglected needs.
Global apparel industry and consumer trends
By 2025, the global apparel market is estimated to raise $285 billion in the US, $440 billion in the EU and a whopping $540 billion in China. Apparel manufacturers and retailers seeking to grow their own business in this segment, just need to look at how they can change and adjust to keep up with the market in 2017. The following are some predictions for what producers and retailers need to lookout for in the apparel industry in 2017.
1. Online shopping: It has been found in recent studies, that consumers who use cellphones will spend an average eight times more than the people who only visit traditional brick-and-mortar stores. Though physical stores are still booming, in 2017 we may find that more retailers are looking to improve their websites and ensure that they are completely optimised for mobile browsing/purchasing. There are many advantages to go digital rather than physical as it brings down expenses, less leftover inventory, and potential for a more personalised service.
2. Influence of social media: As indicated by the Deloitte 2016 Global Mobile Consumer Survey, more than 40 per cent of consumers check their phones within five minutes of waking up. On an average the cellphones get checked 47 times a day. First, consumers check instant messages and text messages (35 per cent), followed by email (22 per cent), and then social networking sites (12 per cent). The statistics demonstrate that the number of social network users around the world had reached 2.34 billion in 2016, and that will increase to almost 3 billion by 2020. According to the Cotton Incorporated Lifestyle Monitor Survey, nearly one-third of shoppers get their clothing ideas from web-based social media platforms. About 22 per cent shoppers accepted that social media sites are the first places they go to get apparel ideas. But there is a contrast between young and older shoppers, as 41 per cent shoppers are less than 35 years old, significantly higher than their older counterparts (11 per cent). The top network is Facebook (36 per cent), followed by Pinterest (31 per cent), Instagram (29 per cent ), Twitter (13 per cent), and Tumblr (10 per cent).
3. Demand from menswear segment: There is a rising demand for broader menswear clothing ranges. Men these days pay more attention to fashion and trends than they have. The sales of menswear expanded by 264 per cent during 2011 to 2014, and it is predicted to reach $40 billion globally by 2019. Shopping behaviour of men is changing, with more impulse buys and longer time spent browsing, and retailers need to tap this. Different approaches will be required to promote menswear in comparison to womenswear. Just creating social media channels for menswear could be an excellent marketing tool. Distinctive images and varying sales approaches have better outcomes with men, and retailers should develop more targeted web-based social media in 2017.
4. Old and young shoppers: According to Mc Kinsey's analysis, the number of retiring and aged people in developed nations will increase by more than one-third, from 164 million to 222 million over the next 15 years. By 2025, the worldwide population aged over 60 will reach 30 per cent in developed economies and 13 per cent in developing economies. This interprets to 51 per cent of urban consumption growth in developed markets, or $4.4 trillion, by the period to 2030. The year 2017 is a huge opportunity for the apparel industry. Hence, brands should use varied approaches to reach and speak with these important shoppers. The industry should consider tailoring their strategies for the old and the young not by concentrating on their age, but rather by identifying the distinct values that resonate with individuals of those groups.
5. Quality as top priority: Nowadays customers are getting more insights into the quality and usability of products. For each of their product items, e-tailers have review sections, where customers can leave their positive or negative comments about the items for others to read. In 2017, quality will become a top priority for customers, with more independent research being carried out to ascertain if the product is worth the money. This could possibly prove costly to a few retailers, as they will need to meet this demand for better quality to maintain. One method for enhancing quality is by re-shoring manufacturing, where the manufacturing of the goods is moved back to where the brand is based. Being nearer to the manufacturer implies that a retailer has expanded control over the manufacturing process, and in this way, can ensure better quality.
6. Personalisation of products: Personalisation is another strong way to make consumers feel that they are getting a better product. The product customisation for individual consumers is turning out to be bigger in 2017. Major brands like Burberry and Topshop are offering in-store customisation and monogramming; several retailers are realising the monetary potential of personalising products for customers. Brands like Fame and Partners offer a service of dresses and other garments that can be totally customised based on one's size and personal taste, providing customers clothing that is unique to them.
7. Brand vs Value: Many shoppers trade down from luxury to affordable luxury products and trade up from discount to value. The possible winners in 2017 will continue to be the value and affordable-luxury segments, which are expected to see sales growth rate of 3-4 per cent and 3.5-4.5 per cent respectively. In 2017, expected growth rates for the luxury and mid-market segments are 1.5-2.5 per cent, which is about half of what they achieved from 2005 to 2015 (6 per cent CAGR for luxury, and 5 per cent for mid-market); nevertheless, this is still an improvement over 2016. However, the discount segment with slowest-growing of all will continue to grow at 2-3 per cent for one more year. Some players will almost certainly struggle to grow and defend their market share from value players and discounters offering higher-quality products at relatively lower costs, adjusting their offer to reach consumers through various channels.
Bet on technology
To stay competitive in 2017, apparel companies need to revamp and have a go at something new. Indeed, revolution is coming for the clothing industry, including the way apparels are made and sourced, how customers shop, and where and how to sell. Retailers and brands need to realise that web-based media is more than funny memes. Having a social media presence is one of the simplest approaches to connect with customers, prospects and build brand awareness and brand loyalty. In 2017, placing big bets on technology increases a company's probabilities of being a winner in future. In the past, small and medium-sized companies (SME) were regarded more vulnerable than big players for business survival in the apparel industry. However, in future, without embracing the spirit of innovation and entrepreneurship, even big companies can find their business suffering.