The fashion industry has always been volatile demanding and challenging. The rise of globalisation, omnichannel and fast fashion added new layers of time, cost and performance pressures, making the supply chain a limiting factor, or a competitive advantage. This McKinsey report considers the challenges for 2019.
It is probably not going to be a surprise to fashion players that 2019 will be a (another) challenging year, with the rise of ‘on demand’ supply chains, but there will be some surprises too, with China expected to overtake the US as the largest fashion market in the world and India’s continued ascent. It’s all in ‘The State of Fashion 2019’ report from the Business of Fashion and McKinsey.
For fashion players, 2019 is about accepting the new paradigm that is taking shape and recognising that the old rules simply don’t work. Regardless of size and segment, players now need to be nimble, think digital-first and achieve ever-faster speed to market.
For MIQ Logistics that means fine-tuning our systems and processes to support just-in-time production, so that our customers can reduce overstock and make short, small-batch production cycles to achieve the agile made-to-order production that means faster speed to market.
After a strong performance in 2018, the industry will slow slightly in 2019, with McKinsey predicting industry growth of 3.5 to 4.5% in 2019 compared with a 4 to 5% estimate for 2018.
The weaker forecast reflects economic predictions for slightly slower global growth and potential disruption to trade relationships.
Europe is facing a slowdown and US growth may have peaked in 2018. Emerging Asia Pacific countries and much of emerging Europe, on the other hand, will continue to see strong spending growth with more global players entering these markets.
Dealing with volatility, uncertainty and shifts in the global economy are seen as the top challenges for the third straight year.