Fashion is a social process whereby a visible proportion of a social group temporarily adopts a way of behaving that is perceived to be socially appropriate. It is a form of self-expression and an opportunity for people to express their individuality, creativity and opinions.
The fashion industry is a multibillion-dollar global enterprise devoted to the business of making and selling clothes. It includes high-fashion apparel, such as haute couture and designer labels; moderately priced clothing (mass fashion); and sportswear and street styles.
Despite the ubiquity of fashion, many people do not fully understand the nature of the industry. For instance, they may be surprised to learn that less than one percent of the world’s fashion designers produce innovative high-fashion apparel and an even smaller percentage of manufacturers produce haute couture garments.
Most of the world’s apparel manufacturers make a variety of products, from moderately priced men’s and women’s sportswear to mass-market dress and casual apparel. These products are typically produced in several product lines or collections, which they deliver to retailers at predetermined times of the year.
Each product line has its own development team, whose designers create unique patterns, colors and fabrics for each piece. These designs are sent to a manufacturing facility, which assembles the pieces of fabric into garments. The finished garments are then sent to the fashion company, which markets the items through various sales channels.
In addition to the finished goods, the fashion industry produces the raw materials that go into them. These include fibers such as cotton, silk, wool, nylon and linen. The fibers are dyed, cut, and sewn into garments that are ready for production. Depending on the manufacturer’s requirements, these fabrics are then combined with other textiles, such as linings and buttons, to create the finished product.
The design of the finished product is often determined by the fashion company itself, but it also sometimes reflects external influences, such as seasonal trends or societal changes. It is important to note that the fashion industry is a fragmented and complex ecosystem, which includes suppliers, distributors, wholesalers, manufacturers, retailers, and consumers.
Companies must double down on strategy, align with key trends and reflect an evolving consumer landscape to remain competitive. This requires leaders to take a deep look at the ways in which they produce, distribute, and market their collections. Moreover, they must be creative in their marketing to attract customers through bold, differentiated content that cuts through a crowded digital environment.
To get a better understanding of the industry, McKinsey teamed with The Business of Fashion to highlight the challenges and opportunities facing fashion executives across the world. The result is The State of Fashion 2022, a report that provides an overview of how the industry stands up to the turbulence in an increasingly globalized world.
Although the economic outlook remains challenging, McKinsey’s analysis indicates that the industry is rebounding in some regions. Growth is strong in North America, though more modest in Asia and Latin America. However, many regions are forecasting growth that is slightly lower than 2018 figures. Inflation and geopolitical concerns, which are affecting the broader global economy, will continue to exert pressure on consumer demand and brands’ operating costs. In turn, companies must reevaluate their business models to stay relevant and profitable as these factors continue to disrupt supply chains.