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In 2018, for the first time, more than half of apparel and footwear sales will originate outside Europe and North America.

McKinsey & Co.’s “State of Fashion 2018” report predicts progression after a challenging couple of years, with industry sales growth nearly trebling from 2016 to 2018,; rising by 3.5% to 4.5%, from 1.5%.

Emerging markets will be a crucial source of this growth, with half of apparel and footwear sales originating outside Europe and North America for the first time in 2018.

The main sources of emerging market growth are Asia-Pacific and Latin America, which are forecast to grow 5 – 7.5%.

In contract the outlook for Europe is a modest 2 to 3%, while in the USA the impact of policy changes prolongs uncertainty, with markdown pressures, market corrections, and store closures continuing.

The outlook for the fashion industry varies across value segments, with consumers moving away from midmarket price points even while the luxury, value and discount segments are picking up speed, the report notes. Buy Cheap Xanax Pills

The improvement in fashion-industry sales volume growth is forecast across a range of categories, including apparel and footwear. Handbags and luggage, and to some extent watches and jewelry, are returning slowly to their historic highs, driven by demand in Asia-Pacific.

Athletic wear is the only category where growth rates look to slow down slightly in 2018, as the athleisure trend has reached its peak in some mature markets, the State of Fashion report noted.

Despite this setback athletic wear is expected to be the fastest-growing category, with continued strong demand in many alternative markets.

These developments take place at the same time as the fashion industry continue to experience transformative shifts.

Mainstream customers are moving into a decisive phase of digital adoption, and online sales of apparel and footwear are projected to grow rapidly..

With information and the ease of comparison at their fingertips, millennial consumers in particular are becoming less brand loyal, with two-thirds of respondents to a survey conducted in conjunction with the report saying they are willing to switch brands for a discount of 30% or more.

Sales of the traditional fast-fashion sector have grown more than 20% over the last three years, and new online fast-fashion players are gaining ground.

To keep up, leading fashion players are following pure-play brands and Zara by accelerating their speed from design to shelf, using consumer insights and data analytics to react and predict next steps.

But speed and flexibility bring added complexity. Shortening lead times requires major changes to the traditional business model and supply chain, and a shift in focus to a customer-centric model.

Fashion laggards fail to address emerging customer demands will face increased risk, lost market share and excess inventory.

In the light of all this change, the performance gap between frontrunners and laggards continues to widen–from 2005 to 2015, the top 20% of fashion companies contributed 100% of the industry’s entire economic profit, while in 2016, the top 20%’s contribution had increased to 144%.

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