How do the latest trends affect the Business of Fashion?

After a turbulent 2020, the Indian economy witnessed a promising start in 2021 until the second wave of coronavirus derailed the swift recovery. However, subsiding cases and revival of business activities augur well for the growth of the fashion industry in 2021. The pandemic has also accelerated certain trends in the business of fashion that had begun to take shape before the crisis; we will witness the evolution of the industry as customers reevaluate their preferences in the post-COVID world. Here are some of the latest trends that will rule 2021.

Rise of Digitally Native Vertical Brands (DNVBs): COVID-19 has given a push to digitisation and fuelled the rise of Digitally Native Vertical Brands disrupting the fashion business. Most of these DNVBs are direct to consumer (D2C) offerings with product differentiation, convenience and superior customer experience as their value key propositions. According to Statista, online fashion is poised to grow at a CAGR of 7.18%, and the industry will be worth $1.0 trillion in the next five years.

These DNVBs are leveraging the power of immersive storytelling and curating engaging content to stay connected with the new-age millennial target audience. These DNVBs exemplify the seamless fashion business management from designing and manufacturing, creating a sustainable supply chain to sales and marketing. Their model has been able to leverage technology to unlock tremendous benefits, including convenience, cost-effectiveness and pleasant customer experience. For example, the Man Company is a homegrown brand that is disrupting the men’s fashion landscape through a range of product offerings catering to new-age millennials.

Use of Social media: Every new-age fashion business is increasingly relying on social media and is present on almost all prominent platforms such as Facebook,  Instagram Shopping, Pinterest, etc. Social media aids in showcasing their offerings, building brand and recall, widening a consumer base and staying engaged with existing customers. Leveraging influencers to build credibility for the brand is also among the prominent fashion business trends. Social media also helps in prompt redressal of customer queries and grievances. Customers often inform about their purchases on their social media handles that build social proof for brands.

Additionally, drop culture has redefined the fashion businesses. Drops refer to posting a picture of a fashion product on social media alongside its release date. It aims to create a sense of urgency among netizens to trigger impulsive purchases and ramp up sales.

Sustainability: Leading fashion businesses are increasingly revamping their operational models to consider the ethical and environmental implications of their offerings. According to an estimate, fashion production accounts for 10% of the total carbon emission and leads to 20% water pollution. Given the current scenario, it is expected to lead to 26% of the global carbon footprint by 2050. Textile dyeing is the second-largest contributor to water pollution. For instance, making a pair of jeans alone requires 2,000 gallons of water. (Source: https://www.unep.org/news-and-stories/story/putting-brakes-fast-fashion)

Measures such as using recycled fabrics, procuring locally sourced raw materials, mitigating supply chain inefficiencies and eco-friendly packaging can play an instrumental role in adding value to the community. The Sustainable Apparel Coalition (SAC) is a global, multi-stakeholder, non-profit stakeholder alliance in the fashion industry working towards this cause. Its Higg Index consists of a suite of tools to measure businesses' environmental and social labour impact across the value chain. In India, Project SURE has laid down the framework to ensure sustainability and positively impact apparel businesses. For instance, Tentree plants ten trees on each purchase. It even gives customers a code to track the growth of their trees in its aim to plant a billion trees by 2030. Apparel brand H&M unveiled a Conscious Collection in 2020 that uses materials like organic cotton and recycled polyester. It also allows customers to recycle unwanted garments at H&M stores and avail a discount on a future purchase. The brand has set an ambitious target to use only sustainably sourced materials by 2030.

Personalisation: New-age customers are thoroughly abreast of the latest fashion trends and seek personalised products and experiences. Personalisation aligns with businesses' core philosophy of customer-centricity among the latest trends in the fashion industry in 2021. A Qubit 2020 survey highlights that 46% of customers are less loyal to brands than in the past years. Fashion businesses are using emerging technologies such as Artificial Intelligence and Machine Learning to gain an in-depth understanding of their target audience and tailor their services accordingly with an objective to grow and retain customers. ASOS, for instance, provides personalised fitting recommendations by making customers enter their height and weight and their preferred brands when they visit its product page.

Rise of FaaS: With millennials prioritising experiences over products, the Fashion-as-a Service model is reimagining the fashion business trends. Today, it is possible to not only buy apparel, footwear online but also rent clothes, fashion accessories, etc. The product assortments of FaaS businesses range from luxury goods, premium denim, seasonal wear and premium vintage pieces. The FaaS businesses respond to the customers’ need for access and urgency to increase the product lifespan and fulfil the goal of a circular economy.

Deeper partnerships: The COVID-19 pandemic has reaffirmed the significance of deeper partnerships among all stakeholders to maintain an edge over the competition. Fashion players are now intensifying their collaboration with suppliers to usher transparency, agility and provide a superior customer experience. Stakeholder engagement has become the key to hedge against risks and uncertainties such as weak contracts, concentrated supplier footprint, etc.

Agility and Innovation: COVID-19 has prompted businesses worldwide to revisit their business models, streamline operations and sharpen their customer propositions. Firms that embody agility and out-of-the-box thinking will inevitably command an edge over their peers. Similarly, innovation has become the centrepiece of the fashion business. For instance, renowned French brand Gemo launched a drive-through shopping service allowing customers to pick up their online orders without even having to enter the store. A US ready-to-wear fashion brand Hanifa’s founder and Congolese designer Anifa Mvuemba showcased a digital catwalk using photorealistic renderings of her garments via Instagram Live. Indian apparel brands such as Van Heusen, Biba added face masks and work-from-home wear in their product offerings.

2021 marks continuity in the evolution of the fashion industry landscape with innovation and personalisation at the centrepiece. If 2020 prompted us to 'pause, think and reflect,’ 2021 has led the fashion industry to reassess and recalibrate to gear for the post-COVID world. As the economy inches closer to normalcy, the fashion business that revisits its strategy to align with key trends and embody customer-centricity will emerge as resilient and thrive in the post-COVID world.