Fashion’s always had a little something more.
With an entrée into self-image, lifestyle, sex, work, working out, class, international commerce and more, it’s an on-the-go industry changing season to season and moment to moment.
But the Internet, the smartphone, social media, e-commerce and the rest have whipped up a whirlwind that’s lasted two decades already — and shows no signs of letting up in the 2020s.
All that change has been great for fashion — or at least parts of it. The sneakerheads have been unleashed. The local fashionista has been elevated to international influencer. Nike Inc. is worth over $150 billion in terms of market capitalization and offprice leader The TJX Cos. is valued at over $70 billion. And e-commerce, of course, has made more than a few multimillionaires.
The traditional players were largely caught flat-footed — they could almost be heard crying, “We do change, but not this much change!”
Now they’ve woken up to the challenges. Walmart Inc. and Target Corp. are relevant in a new way and viable competitors to Amazon, PVH Corp. has brought Tommy Hilfiger into a fresh age and is looking for more brands to snap up, while Levi’s is cool once again — and has a $7.5 billion market cap to prove it.
The big are getting bigger and many of the others are falling further behind.
Size, though, won’t be enough if today’s winners are going to come out on top again in 2030. To keep winning, the leaders will have to stay quick, nimble and always be aware of how the world is changing.
That’s because it’s expected to keep changing — and fast.
To offer a sense of the velocity, Marcie Merriman, managing director, advisory services at EY, pointed to the forthcoming 5G network that will start powering smartphones this year. The jump from 3G to 4G, which helped streaming video jump onto smartphones a decade ago, boosted download speeds by 10 times. The leap from 4G to 5G is a 100-fold increase.
“It’s what the technology’s going to enable that’s going to be crazy,” Merriman said.
But no one’s quite sure just how it will be used. A virtual reality in one’s palm at all times? A great big shopping mall in the cloud with digital avatars and new everything?
Just what 2030 will look like is still anybody’s guess — just as no one in 2010 could have predicted what 2020 would be, at least when it came to the turmoil that engulfed the fashion and retail worlds.
But to take the pulse of the new decade and the trends that promise to shape fashion, WWD asked experts across the industry to peer into their crystal balls.
The result? A vision of the future driven by a new kind of always-on retail, supercharged by artificial intelligence, all the more cognizant of its ecological footprint and courting an anxious consumer that’s even more technologically overloaded and wants to get the full shopping experience on their terms.
If that sounds a little like last year on steroids — it is.
The future is always based on the present with roots in the past. While there will be some X factor that will crop up and derail even the most sensible plans and predictions, there are some major trends that indicate at least the direction the industry is headed.
Here, the start of a roadmap to at least try to point the right direction.
As the 2010s started, retailers were waking up to the notion that e-commerce was not just a passing fad or a small niche, but a new foundational element for the business.
The word omnichannel was everywhere and, if ill-defined at first, came to signify a merging of clicks and bricks where stores and web sites were combined to offer a unified view to consumers.
Now, that consumer is heading into a world where the shopping experience is not just unified by channel, but omnipresent.
“We’re going to get into the world of retail everywhere,” said Ryan Cotton, who is managing director of Bain Capital and sits on the board of Canada Goose Holdings Inc. “This notion of shopping being a discreet activity in our lives is not going to exist anymore, instead we’re going to always-on retail. The commerce line is going to blur into the everyday life line…companies therefore are going to have to become good at different forms of marketing, at being multichannel.”
At the same time, Cotton predicted the savvier use of consumer data and AI will have businesses tailoring their products to smaller niches or individual consumers, with delivery becoming more automatic.
“In 10 years, your bathroom will know before you do that you’re running out of shampoo,” he predicted.
As more products are targeted at smaller segments of consumers, word of mouth — the lubrication of a lifetime of a retailer — matters less and less.
Whereas 30 years ago consumers might have relied on branding to make decisions — sticking with Green Giant when getting beans at the supermarket — today Fresh Direct can fill that role.
Cotton sees that kind of transition happening more and more, with big changes for merchants.
“The customer ownership is going to happen at the service level and less and less at the brand level,” he said.
Big Oil, Big Tobacco, Big Fashion?
Sustainability — the top buzzword of 2019 — is sinking deep into fashion.
While many brands try to talk up their good works, fashion is an industry with a large environmental footprint and Marcie Merriman, who is managing director, advisory services at EY and has a background in cultural anthropology, said people are starting to plug that into their ethical and career calculus.
“I’m hearing from top executives all the way down to college students — they’re concerned about even working in the industry,” Merriman said. “Is it big tobacco or oil? In the past, being in fashion or beauty, it was more of a cache. Now there’s a lot of concern that, ‘Am I contributing to the end of the world by being in this industry?’
“It could really have a spinoff of a whole new economy around keeping things lasting and good,” she said.
That economy could already be starting up with the The RealReal having staged an initial public offering and ThredUp gaining steam in resale while more companies follow Rent the Runway into rentals.
And Virgil Abloh, patron saint of streetwear, Off-White founder and creative director of men’s wear at Louis Vuitton, recently told an interviewer that streetwear would die in the 2020s as consumers “hit this like, really awesome state of expressing your knowledge and personal style with vintage.”
“In my mind, how many more T-shirts can we own, how many more hoodies, how many sneakers?” Abloh told Dazed magazine. “There are so many clothes that are cool that are in vintage shops and it’s just about wearing them. I think that fashion is gonna go away from buying a box-fresh something; it’ll be like,’ hey I’m gonna go into my archive.’”
No More Luxury Ghettos
“Retail’s changing at a neck-breaking pace, particularly when it comes to the shopping experience and what draws customers in today,” said Robert Burke, chairman and chief executive officer of Robert Burke Associates. “We started talking about omnichannel before we understood it. But we’re going to be living it for the next 10 years in a seamless way and there will be no differentiation between the physical and online. Some brands will have to come to the reality that their retail stores will be showrooms.”
That means malls and shopping districts that are not “luxury ghettos” with the same high-end brands all clustered together, but destinations that Burke said offer consumers “the complete package,” including food, services, spas, luxury goods and more.
“The reality is that the luxury consumer goes to Apple, they go to Nike,” he said. “The consumer’s going to tell everyone how they’re going to shop — when, where — and anyone who’s going to succeed has to make it easy for the customer.”
An Anxious, Lonely Consumer
If consumers seem to be all over the place, who can blame them?
Shopping has changed dramatically and so has their connection to the world. They’re always online, bombarded by marketing messages, news alerts and social updates.
It’s all coming so fast. And while everything is closer, other people are in many ways further away.
Kit Yarrow, consumer psychologist at Golden Gate University, pointed to three trends that are “only going to increase” in the 2020s:
• Social isolation
Anxiety has been on the radar for a long time, but Yarrow said it’s not the presidency of Donald Trump or the economy that’s putting people on edge.
“The anxiety has to do with how superficially we understand the world — in little soundbites. We don’t have a deep understanding,” she said.
While people are receiving their soundbites online, they’re getting more isolated and further from the cure. “The antidote for anxiety is really human connection and we get less of that,” Yarrow said.
To fill the hole and ease their impatience, people are keeping very active and “scurrying around.”
“A lot of this scurrying activity, where people are so busy, is what people are doing to escape feeling bored, or frustration,” she said.
It’s not all doom and gloom, though, and these trends open up opportunities for retailers to help pull consumers out of it.
“Nobody buys stuff because they feel good; we’re buying things to solve problems,” Yarrow said.
The Tech Pendulum Swings Back
Everything that’s old might be new again by the time to ring in 2030.
Eventually, the solidly middle-age Millennials, used to merchants bending over backward for them, might start to see the world through new eyes. And if the 2010s were about those Millennials, the 2020s up to 2030 and a bit beyond will be about Gen Z. With Gen Alpha right behind it.
“As the Boomers die off, this next generation, the digital natives, will have grown up completely conversant with technology, which is going to change the way everyone has to use technology,” consultant Jonathan Low, partner at Predictiv, said of the Millennials. “There’s going to be a lot more shorthand, if you will, the connection between consumers and merchants is going to be faster and easier because everybody’s going to know what everybody else wants and is doing.”
But all the personalization that has made that possible is going to start to push people all the more into their own silos.
“There’s going to be a push back into a demand for more communal experiences,” Low said. “By 2030, people who have grown up with phones in their hands are going to want something else. If you grew up going to malls, then e-commerce is new and interesting and convenient. If you grew up with e-commerce and never going to malls because that was a hassle seemingly, that could be new and interesting.”
A Local for Local Supply Chain
While fashion companies serve up new styles for new consumers in new ways on the front ends of their businesses, they’ll also be managing through big changes on the back end.
Stephen Lamar, the newly minted president and ceo of the American Apparel & Footwear Association, said the biggest change the industry’s seen on the sourcing front in a generation has started and is now “irreversible.”
But in many ways the changes that have flowed out of the U.S.-China trade war were already underway when Donald Trump became president.
“People have been talking about moving away from China for a long time,” Lamar said. “The sourcing disruption is obviously because of the trade policies, but it was received by an industry where a lot of the thinking was already happening or a lot of the action was already occurring. In many cases, it didn’t start something, it accelerated it. Ten years from now we’ll see a lot more of the effect of that.”
Companies with a lot of production in China are looking at Vietnam or beyond. “There’s a lot of interest in Africa now and I think that interest will only grow over the decade,” he said.
But Lamar said “lower-cost labor may not be the driver that it was 20 years ago” as new technologies come online and as brands look to produce closer to where they sell.
“There will be a very strong local for local part of this,” he said. “China will be a big market that will be serviced out of China.”
The work will change as well.
“The jobs will be different,” Lamar said. “Fifty years ago, we were looking for seamstresses and now we’re looking for software engineers and that’s just going to continue. It’s going to reflect back to the technology needs, where as the industry becomes more dependent on technology to either make the product or get the product from point A to point B or to sell the product, more and more jobs that are needed in this industry are going to be rooted in technology.”