The State of Fashion 2020, the most recent iteration of the annual report that maintains its finger on the pulse of the fashion business, was produced in collaboration once more between McKinsey & Company and the Business of Fashion.
Based on the steady expansion in all areas, it has been a source of optimism among the players in the fashion industry for years. This time, though, the report has a more ominous undertone, predicting unrest in some regions and issuing a potential recession warning.
But there’s no need to worry; by making preparations in advance, these forecasts can be easily avoided. We’ll break down the main themes of the State of Fashion 2020 to assist you in future-proofing your retention strategy.
Navigating the Rough Seas of Fashion
2020 might mark a turning point for the fashion sector, but not for the reasons you might expect. According to the survey taken by SoF, more than half of fashion executives anticipate that things will start to deteriorate this year. This stands in stark contrast to the optimistic prediction of the prior year’s research, which predicted tremendous development for the industry, particularly for the luxury and sportswear divisions.
There are many causes for this abrupt change in attitude, including trade tension between the EU and the UK, rivalry between the US and China, and a decline in Japanese exports. In other words, the industry is struggling all over the world. Small businesses are often the first to experience increasing waves. However, the State of Fashion 2020 reports that even the bigger players are creating a backup plan.
Stay in China or leave?
China has emerged as a major player in the fashion sector in recent years. Early adopters that moved quickly, like Zegna, were able to establish a position on the eastern market and now rank China as their top revenue-generating market.
However, the vast majority have trouble connecting with Chinese consumers; just ask Dolce & Gabbana. Because they are becoming too dependent on this market, even brands that have succeeded in breaking through cannot feel secure. Given the growing competition from within, that is a very risky posture.
Some participants think ahead and take the chance of moving into other areas, like India or Southeast Asia, in an effort to snag a piece of the action before the next gold rush starts.
Increased customer retention efforts and measures to safeguard your Chinese customers could be another option. Building brand loyalty in Asia is the focus of a comprehensive report that highlights the top four trends that can make or break your marketing plan.
Social media shopping’s rise
The State of Fashion 2020 also revealed that conventional engagement models are having trouble on well-known social media sites. The research advises industry participants to reconsider their approach and increase their persuasiveness. It all comes down to producing attention-grabbing content that is platform-sensitive and offering smooth links to checkout.
Yes, social media shopping is a trend that won’t go away. Instagram made news in 2019 when it unveiled a brand-new feature that let users buy things straight from the app. Although it limits their reach, this kind of social media marketplace aids fashion firms in increasing their conversion rates.
Getting on board and conducting business through Instagram means you will receive less information about your clients and won’t be able to communicate with them directly.
In a time of overstimulation, creating some healthy rivalry among consumers is one approach to engage viewers. You could, for instance, organise an Instagram or hashtag contest (with a tempting reward, of course) and request that your audience contribute their own content. Because you just need to offer a few awards, the competitive spirit increases engagement rates at a cheap cost to your business.
Get More from The State of Fashion Forecasts for 2020
In the fashion industry, there are always ups and downs, so it never hurts to stand back and create a resiliency strategy. A loyalty programme is essential if you also want to improve your customer retention approach.
Antavo is prepared to assist you in creating a customer engagement strategy that engages clients outside of the traditional buying cycle. Visit our case study library to find out more about how we assist our clients in boosting customer lifetime value and moving their KPIs.