2022 rerouted the fashion industry's path for 2023, the main reason for this is the macroeconomic tensions and alterations in consumer consumption levels. Read on to further learn the reasons why the fashion industry's path has altered for 2023, and understand which areas will redefine the fashion industry.
The fashion industry was finally finding its feet and going back to the new normal after the effects of COVID-19 had taken their toll. In the later months of 2021 and early months of 2022, growth was seen within the fashion industry, due to the lifting of restrictions of the pandemic. Although there were still some partial restrictions affecting supply chain disruptions, customer demand increased. It was found that the fashion industry, globally, in 2021 “grew 21% year on year.”
According to the McKinsey Global Fashion Index, “more than 50% of the companies … contributed to the industry’s total economic profit” whereas it was only 32% in 2020. Therefore showing incredible growth.
However, these strong foundations that were built started to experience breakage as 2022 progressed. The Ukraine war had a major influence on many different industries, such as escalating to an energy crisis across Europe. Inflation also played a big part in many major economies going into crisis, increasing interest rates. Moving forward to 2023, there are many predictions on how much the rate of inflation will challenge the fashion industry.
As well as macroeconomic tensions, geopolitical tensions are on a rise and are also likely to carry on affecting the fashion industry. This is specifically to do with the war in Ukraine, again. This war has interrupted supply chains, weakening businesses' performance in following trends, supplying the correct products to customers and so much more.
To resist the further effects of this happening to fashion companies, they will need to rethink their operations. By updating their organisational structures and hiring new employees to target key growth opportunities, as well as react faster to up-and-coming risks. Following this, they are likely to find less damage to their business's growth and productivity in the long term.
It is important to note that fashion brands, in the UK, should bear in mind that due to the economic downturn at this current time, consumer habits and trends are likely to be dependent on household incomes.
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