This is described in detail in The State of Fashion 2022 report, drawn up by Business of Fashion and McKinsey. Between paradigms that are no longer true, such as “small is beautiful”, and segments that are less and less vital (the medium segment, for example), here is what we can expect from the year that is coming
Until the arrival of the pandemic, the paradigm was that small companies were the most flexible and responsive, able to change direction and strategy at a moment’s notice if the market demanded it. The facts have shown that this was an illusion. The stop in travel (with consumers pouring their spending back home), the boom in online sales, together with a general context in which consumption fluctuates according to the constant changes in the restrictions imposed by contagions, have been changes that the large fashion and luxury groups have been able to interpret better. So much so that, in some cases, they have performed better in 2021 than in 2019. Fine, but what will happen in 2022?
What will happen to the fashion system
No surprises: this picture will not change in the coming year. Global fashion sales will grow by an average of 3 to 8% over 2019 levels. But there will be (a few) groups that will do better than average and many more companies that will fight for their survival. This is explained in The State of Fashion 2022 report, prepared by Business of Fashion and McKinsey, which suggests the likely winners, which it defines as “super winners“.
Goodbye middle class (and not only)
Among them will not be companies that distribute mid-range products, a segment that is expected to shrink further. Nor will there be those whose main market is Europe, which is lagging behind China and the United States, partly because of the lack of tourism. On the other hand, the brands that manage to attract customers in China and the USA (with particular reference to the younger generations) will have a great opportunity for growth.
But who will shape their business according to the new and unstable market conditions? The big groups, of course. In other words: LVMH, Kering, Richemont, Hermès, Chanel & co. But also who will be able to seize the opportunities that 2022 will bring. Not only online sales, but also the desire of consumers to update their wardrobes as they return to face-to-face work and social occasions. End-consumers will be willing to buy fashion products despite the expected price increase, which is a logical consequence of logistics issues, higher raw material prices and transport costs. Challenges that the fashion and luxury sector will also have to face in the coming year, particularly in the first half of the year.
2022 will also be the year in which some trends initiated in the past few years are expected to gain further momentum. We are talking about the world of the Metaverse and NFTs, sensitivity to sustainability and blockchain. But also a generational change at all levels. This is a theme in which the luxury giants can bring their appeal and greater ability to attract talent to bear.
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