BoF’s ‘The State of Fashion 2023’ Report analyses global fragility and its effect on the fashion industry in the coming year.
State of Fashion 2023
Each year, The Business of Fashion partners with McKinsey & Company to forecast consumer habits, brand behaviours, and micro-trend shifts in the industry. As 2022 comes to a close and a global recession, climate crisis, and digital overwhelm are increasingly present, 2023 has been claimed as the ‘year of uncertainty’ for fashion futures.
“Industry executives expect business next year to face a continuation of the changes that escalated in the second half of 2022, including the ripple effects of the war in Ukraine, relentlessly high inflation and shaky consumer sentiment.” – BoF
However, after building resilience through the COVID economy, industry leaders have developed strong infrastructure to endure unpredictable consumer habits and macroeconomic changes. Through the report, BoF identifies key themes that will define the landscape of fashion in 2023.
As the industry faces this generation’s highest case of inflation, brands hold the power to decrease price hikes. The Report suggests that companies prepared to adjust to this should buckle down on efficiency and decrease unnecessary spending, reset entry-level price points, increase loyalty programs, reset labour models, and accelerate decision-making processes within management teams.
In response to economic shifts, consumers will respond in a variety of ways. Some will participate actively in the circular economy of fashion, some partaking in more discounted and promotional shopping, and others postponing larger purchases. Whatever the case, the industry must anticipate its direction and aim to retain loyalty.
One example of this is the increase of fluidity through fashion design. Gen-Z consumers in North America, Europe, Japan, and South Korea are shopping across gender lines. Through integrating gender-fluid products, companies cater to younger audiences while cutting costs and protecting future loyalty. With a focus on the younger generation, loyalty is most likely to remain as they age and their power of purchase increases.
To survive in the coming years, companies must focus on the system that keeps them level in the competitive field. This includes; increasing digital marketing efforts, eliminating greenwashing, creating lasting supply chain models, retaining top talent within the company, and embracing new creative technologies in the Metaverse.
State of Luxury
In the midst of these changes, the luxury industry must continue to be adaptable and resilient. One proven success is the focus on Direct to Consumer models, which allows for a deeper relationship with stakeholders. The overall challenge for luxury brands in the recession will be to convince shoppers to use valuable dollars on high-priced items when excess is not encouraged. The most persuasive route for companies in this regard is differentiating themselves in terms of brand value.
In response to the ambiguous future, brands must identify which areas to focus on in order to retain consumer loyalty and attention. Sustainability efforts, Metaverse integration, or experimental retail, strategies must be innovative and clearly communicated to stakeholders. The fittest will survive the global fashion economy in 2023.
By Chloé Janssen, MA Luxury Brand Strategy & Business