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What’s in Store For Fashion? Coats Digital’s Experts Reveal Their Predictions for 2023

What’s in Store For Fashion? Coats Digital’s Experts Reveal Their Predictions for 2023

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Introduced by Akash Shah, Managing Director, Coats Digital

Taking stock of the past year and looking to the next, it is evident that we are all seeing unprecedented and significant macro-economic challenges facing the industry.

Although the disruption caused directly by the pandemic may have begun to recede, we are now witnessing the negative impacts of geo-political risks, energy crises, high and rising inflation, high surplus stock levels, and continuing global supply chain disruption.

 

Ecommerce Will Remain King

Since the pandemic, consumer behaviour has changed dramatically and will continue to do so. During lockdowns eCommerce accelerated exponentially, and although brick-and-mortar retailing has reclaimed some of its lost market share, we expect that online shopping will continue to be the preferred choice for a growing global population with increased access to the Internet and smart phones, and with greater time for many spent at home due to popular, flexible working initiatives.

The latest BOF/McKinsey – State of Fashion Report 2023 warns, however, that mounting digital marketing costs and the need for consistent e-commerce readjustments will mean that brands will likely have to diversify their channel mix to include wholesale and third-party market places, and not just focus on Direct-to-Consumer models, if they really want to grow.

 

Even during what is evidently going to be a very difficult year ahead, these factors are all potential drivers for global growth, and if the fashion industry can adapt and respond quickly to new consumer expectations around sustainability, more personalised fashion customisation, and more agile production turnarounds on fashion trends – then it will undoubtedly be able to better navigate a notoriously precarious trading environment.

 

Evidence increasingly suggests that all players in the fashion supply chain will be unlikely to successfully navigate this consistently changing landscape or meet the exacting expectations of a more demanding consumer, if they don’t invest – and continue to invest – in technology and digitisation programmes that will help to mitigate the challenges ahead.

 

New Customer Demands will Herald in a Greater Need for Speed

It’s easy to see why the BOF/McKinsey – State of Fashion Report 2023 highlights that two-thirds of apparel chief purchasing officers expect digitisation to be the most important capability for suppliers to grow in the year ahead.

Looking further out, with Deloitte’s Apparel 2025 Report predicting that technology will advance greater personalisation and customisation of styles to enable consumers to modify every aspect of each article of clothing they buy – including trim, sizing, materials and even down to fundamental design – then only those manufacturers that have the digital processes in place to ensure rapid speed to market and accurate product data, will be able to fully capitalise on Deloitte’s estimation that customisable apparel will claim between 10 to 30 percent of market share by 2030.

Add to this the fact that brands are increasingly wanting to respond deftly to fast-changing style trends driven by social media – then the emphasis on speed, and shorter, more complex orders will undoubtedly be more acute in the years to come. We predict that retailers are certainly likely to embrace this change readily if it reduces the risks of surplus inventories.

 

Brands will Talk Less and Do More to Evidence their Sustainability Claims

With brands on an insatiable quest to give consumers exactly what they want, retailers are also waking up to the fact that sustainability and fair wages are not issues that can be simply sugar-coated in marketing hyperbole.

According to several reports, consumers are increasingly circumspect about retailers’ sustainability and CSR claims, especially when there have been a number of cases where the claims of a few fast fashion retailers have been exposed as blatantly untrue.

This has not just put a spotlight on the fashion industry on the whole with regards the consumer, but also raised concerns from regulators about greenwashing and false advertising. With a raft of new legislation around sustainability targets on its way over the next few years, which includes guidance on how to track and compile evidence on sustainability claims, we expect that many brands will be focusing their technology investments on solutions that offer greater transparency, traceability and data sharing between all supply chain stakeholders, to ensure they can clearly evidence their sustainability and fair wage claims.

Given that the latest BOF/McKinsey Report highlights that nearly 80 percent of fashion executives cite a lack of standards to assess sustainability performance as the greatest hurdle to improving how consumers perceive their sustainability efforts, we predict that technology and regulatory guidance will play a pivotal role in underpinning some kind of primary framework next year.

 

On the manufacturing side, we believe that supply chain players will continue to invest significantly in technologies that enable them to realise faster On-Time-Delivery-Performance, streamlined and enhanced production efficiencies, and more accountable sustainability practices around fabric waste, water and energy consumption, CO2 emissions and fair wages.

 

Greater Collaboration & Data Sharing Between Brands and Manufacturers Will Get The Industry Closer to the Customer

The industry’s digitisation journey is just beginning, and we predict it will continue to accelerate at a rapid pace as it overcomes its notoriously anachronistic past and starts to lead the way on industry best practice.

Indeed, the latest the McKinsey Report suggests that continued global disruptions in supply chains will be the catalyst for a major configuration of global production based on increased vertical integration, nearshoring and small-batch production, enabled chiefly by enhanced digitisation.

And it’s not all about future-proofing manufacturing – the report also advises that to achieve a successful execution of strategies in 2023, brands need to also overhaul their organisations to execute on key priorities around sustainability and digital acceleration. Digitisation will consequently prove crucial to deliver the data insights that both manufacturers and brands will increasingly need to make important, informed decisions about their future.

 

We predict that brands will increasingly want to capitalise on the valuable data insights that many supply chain partners now hold, and will push for more collaboration and greater end-to-end digital integration with partners, in the bid to not only create more efficient and profitable ways of working, but also evidence their CSR claims.

The industry will consequently continue to look at the best means to seamlessly synchronise a raft of different solutions into one modern ecosystem that provides all fashion stakeholders with the visibility and data insights it needs to give consumers exactly what they want – every time!

 

Here are some further 2023 predictions from a few of our global industry experts in the Coat’s Digital team.

 

2023 Will See a Boost for Best-In-Breed

Jonathan McCormack, Director of Software Engineering, Coats Digital

“In 2023 we will see a turning point for fresh upstart solutions offering real value to the fashion industry. With the coming recession, organisations will not have the time for bloated installations so will instead turn to acute, best in breed tools that can be delivered fast. Combine this trend with low-code no-code integration tools getting better, organisations can continue to tailor solutions to their needs and connect disparate system data for business wide insights. Expect applications to focus on their strengths and USPs, as well as their connectivity to other tools next year to keep up with this trend.”

 

Brands Will Invest More in Transparency and Traceability to a Make a Real Difference to the Planet

Stuart McCready-Stock, Brand Director, Coats Digital

“In light of numerous customer-focussed surveys reports attesting to increasing customer demand for eco-fashion, on top of a wave of incoming new legislation, brands will start to put their money where their mouth is to evidence their sustainability claims. With the fashion industry tarnished with the same greenwashing brush as a few bad apples that have been exposed as marketing false CSR oaths, brands will start to take more control of their sustainability agendas by working more collaboratively with all supply chain stakeholders to harvest, monitor and analyse key data insights so they can truly testify to the promise that sustainability really does lie at the heart of their businesses.”

 

Only Greater Digitisation & Industry Collaboration will Reduce Fashion’s Carbon Footprint

Mehmet Topcu, Professional Services Manager, Coats Digital

“The fashion industry will start to succeed in getting rid of its bad reputation for environmental pollution and resource consumption by working more collaboratively and by harnessing technology and data insights effectively. Only increased digital transformation will ultimately help the industry to solve these challenges. Brands and manufacturers will consequently increasingly capitalise on new digital tools to ensure a more efficient use of resources that have less impact on the environment.”

 

Nearshoring, AI & Machine Learning Will Prove Increasingly Popular to Meet Consumer Demands

David Lush, Solutions Consulting Director:

“Some of the biggest industry trends will continue to be more competitive prices, more order complexity, smaller order quantities and shorter lead times. Brands want to avoid inventory risks and instead use shorter runs to assess what sells so emphasis on VMI (Vendor Managed Inventory) systems are likely.

 

Manufacturers are trying to find innovative ways to address all these issues through nearshoring production and by creating smart factories to offset some of the reductions imposed on them.

In terms of technology, artificial intelligence, and machine learning to optimise materials and products through the factory, saving time and money while improving quality and safety are likely to become more popular as more options become available.”

 

Fabric Will Prove Fundamental to Fashion Manufacturing’s Future

Silky Prajapati, Product Owner , FastReactFabric, Coats Digital

“With rising costs, geo-political uncertainty and the threat of more global lockdowns due to virus pandemics, it has never been more imperative that fashion manufacturers aim to optimise costs at every stage of the production lifecycle. However, with 60 percent of total manufacturing outlay attributed to fabric costs, manufacturers are starting to realise that it really does pay to digitize and enhance their fabric-related processes, not only to increase profits significantly, but also greatly reduce their fabric waste. I predict that those that do will undoubtedly be the biggest winners of 2023 in the quest to deliver quality, ODTP, greater sustainability and an increased bottom line.”

 

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