Finally, as competition for talent—particularly for tech talent—increases, brands must devise new strategies to attract the best and brightest, with cybersecurity likely to be near the top of the agenda.
In many global regions, the fashion industry is expected to pick up steam in 2022, as consumers unleash pent-up purchasing power and dress to impress (where the pandemic allows). Indeed, recovery is at the top of executives’ minds for the coming year, with 75% of luxury-segment executives, 61% of midmarket executives, and 50% of value executives anticipating improved trading conditions.
However, as they pivot toward growth, a significant challenge will be potential product and resource shortages, as clogged supply chains and rising shipping costs wreak havoc on operations.
Several companies have recently reported difficulties managing inventory flows or have linked lower sales forecasts to supply-chain bottlenecks. As a result, many people have turned to solutions such as increased nearshoring, in-store supply stocking, and agile operating models designed to respond flexibly to change.
The continued flourishing of online business models has been one of the year’s standout themes, reflecting a longer-term trend that accelerated during the pandemic. Hyper-interactive digital environments and investments in e-commerce are increasingly becoming leitmotifs of fashion-forward brands.
We anticipate that in 2022, companies will seek new approaches to online creativity and commerce, with nonfungible tokens, gaming “skins,” and virtual fashion gaining traction. Over the last year, some brands have expanded into the digital “metaverse,” launching virtual stores, gaming, and digital events. These efforts will pick up steam in the coming year, as in-app social commerce becomes more important.
Photo by Chris Yang on Unsplash
More than ever, consumer priorities and the fashion agenda are dominated by sustainability. Consumers want to know where materials come from, how products are made, and whether workers are treated fairly. As a result, an increasing number of businesses are expanding their sustainable assortments and working to improve the sustainability of their supply chains.
Some of these efforts include the use of digital product passports. These can be embedded in items to help with post-use activities like resale and recycling. In the fight against counterfeiting, brands are also turning to passports combined with distributed-ledger technologies.
Fashion brands must work harder than ever to protect their systems, partners, and customers as they invest in new digital applications. Cybertalent will be in high demand in the face of fierce competition. Furthermore, historically high vacancy rates necessitate that brands find novel ways to attract and retain employees, as other industries compete fiercely on salaries, sustainability, and job security. Employee well-being and authenticity will be more important than ever.
The bottom line as we approach 2022 is that the fashion industry faces a complex mix of challenges and opportunities, with little room for error. Decision-makers face a difficult task in managing the demands of digital, sustainability, and the supply chain.
Nonetheless, the past year’s experiences demonstrates that consumers are resilient, and that as economies recover, demand will follow suit. As a result, the task for businesses will be to unlock growth, align with changing customer needs, and maintain a laser-like focus on the bottom line.
