The annual McKinsey & Company State of Fashion 2018 report shows fashion sales across the world will grow in the coming year, and will be more sustainable than 2017. The figures show an average growth of between 3.5 and 4.5 [per cent (+ 4 or 5 per cent for the luxury segment) for a total sales volume that could reach 2,500 bn dollars (equal to about 2,100 bn euros). The progress should be on average one percentage point higher than the estimates for 2017, while remaining below the forecast of 5.5 per cent over the long term.
According to the report, which was compiled in association with the Business of Fashion, 2017 signals the end of an era, as the West will no longer be the global stronghold for fashion sales—more than half of apparel and footwear sales will originate outside of Europe and North America. The main sources of growth are emerging-market countries across Asia–Pacific, Latin America, and other regions; they are forecasted to grow at rates ranging between 5 and 7.5 per cent in 2018.
Meanwhile, the economic outlook in the mature part of Europe is stable, and fashion-industry sales growth is likewise expected to remain at a modest but steady 2 to 3 per cent. In North America, while overall consumer confidence is strong, the impact of policy changes is uncertain, and markdown pressures, market corrections, and store closures continue. Here, we expect a modest growth of 1 to 2 per cent.
Mainstream customers are moving into a decisive phase of digital adoption, and online sales of apparel and footwear are projected to grow rapidly. Consumers in Southeast Asia spend about eight hours a day online on average. The modern shopper’s comfort with digital channels and content has created a complex customer journey across online and offline touch points. But regardless of touchpoint, consumers expect a consistent brand experience across channels.