The fashion industry is in the midst of a transformational moment. The brands that have survived the pandemic are dealing with myriad challenges, including pandemic-related labour and logistics issues and mountains of leftover inventory from 2020. Styles hitting the shop floor now may not be adequately meeting the desires of consumers who are finally ready to return to normal life. While it’s unsurprising that clothing sales are up 200% year-on-year, what’s more impressive is that sales are up 35% compared to 2019 levels. But it’s unclear how much of this surge represents pent-up demand versus any kind of new normal.
In an era when the British Fashion Council and the Council of Fashion Designers of America are requesting fewer seasonal collections, it’s a timely moment for the industry to consider a reset when it comes to volume. Gen Z is leaning into more sustainable shopping habits, with 35% of them saying they intend to buy fewer clothes in the future and increasing numbers of them shopping secondhand. While the waning of the pandemic may be spurring a momentary surge in demand, many consumers are also more broadly questioning whether they need or want to keep buying as many clothes as they once did.
Of course, none of this means the end of the fashion industry. But it does mean that to thrive, brands will need to think much more carefully than they once did about what to produce and in what quantities.
Some brands, Like Mara Hoffman and Vivienne Westwood, are already leaning into reduced production volumes. British womenswear brand Teatum Jones has managed to improve its sell-through rate while reducing SKUs by 60% over the past four years.
Fortunately, given that 20% of the clothing produced is never even sold, there is room for brands to rationalise their assortments to conform to new consumer tastes, trim their production volumes, and still sell more. The key is in more accurately aligning supply with demand.
How to accomplish this? The key is in gaining a better understanding of what consumers want. Brands with quicker production lead times will be best positioned to take advantage of this approach. In a recent Wovn survey of buyers and merchandisers, we found that only 18% of brands are working with production lead times of 3 months or less. More than a quarter of the brands we surveyed are working with lead times of 6 months or more. But brands are increasingly recognising that the faster their lead times, the greater their ability to be responsive to consumer desires.
Being nimble is a big step in the right direction for fashion brands, but gathering real-time feedback from consumers and integrating it into product development, assortment planning, and buying decision-making processes is absolutely crucial. By truly understanding what consumers want and responding to these desires, brands can dramatically increase their ability to thrive in the current transformational moment and beyond.