The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Created by BoF’s journalists and editors, in conjunction with our wider network of leading fashion creatives, thought-leaders, and innovators, Masterclasses are in-depth webinars with supporting resources, designed to deliver key learning outcomes on critical industry topics.
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Background:
The pandemic upended any sense of certainty in 2020, and four years later, that unsteadiness remains across the fashion industry. Among executives, there is less consensus than ever before on 2024′s outlook, with 37 percent claiming that 2024′s market conditions will be better than the previous year, and 28 percent saying that conditions will likely worsen in 2024.
“The world is not in party mode,” said Achim Berg, McKinsey’s global leader for apparel, fashion and luxury.
In the latest BoF Professional Masterclass, BoF founder and editor-in-chief Imran Amed sits down with Berg to discuss the key trends that will shape the global fashion industry this year, as detailed in BoF and McKinsey’s annual State of Fashion report.
Key Insights:
- While geopolitical conflicts are top of mind in 2024, inflation — 2023′s top concern — remains on executives’ minds. To grow sales in 2024 and deal with higher input costs, 69 percent of executives are planning price hikes in 2024. “It’s a fine line to work and you need to understand the elasticities and understand your consumer,” Berg said. Should the consumer not respond, high price increases followed by heavier discounting will not realise better margins, Berg added.
- In 2024, the global economy will be affected by the climate emergency. “It has an impact on the consumer … and the supply chain of the producing countries. It’s a reality and if we don’t tackle the climate issue we will face much bigger problems,” Berg said. Companies that are prepared and have ensured robust supply chain protections will have a competitive advantage.
- Travel is expected to surpass pre-pandemic levels this year, but travellers’ motivations have changed. Fewer want to shop in new destinations, instead preferring nature-themed excursions and value-adding experiences. “This creates opportunity … and can be an issue. If budgets are tight, people will save money to afford travel and will likely cut the clothing budget,” said Berg.
- Influencers who are authentic and heavily embedded in the communities they are appealing to will have the most influence in 2024. “It is not good enough to present something to a camera and say ‘you should buy this.’ It’s more about sharing a lifestyle, explaining values and connecting that in a very clever way,” Berg said.
Additional Resources:
- The State of Fashion 2024: Riding Out the Storm: The eighth annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals an industry navigating deep uncertainty. Download the full report to understand the 10 themes that will define the industry and the opportunities for growth in the year ahead.
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