The Fashion System shows signs of recovery: travel sustainability, outdoor and AI are the growth drivers
The forecasts for 2024, made by McKinsey and The Business of Fashion and contained in the 2024 edition of The State of Fashion report, highlight an encouraging sign of recovery starting from the current year.
In general, the McKinsey Fashion Growth Forecast indicates a cautious outlook for 2024, with an estimated growth ranging between 2 and 4 percent. The luxury segment is expected to see a rise of 3-5 percent.
China is the only market showing a higher (from +4 to +6 %) and more consistent growth in both luxury and non-luxury sectors. According to executives interviewed, the most promising markets in 2024 are expected to be the Middle East (mentioned by 51% of respondents), particularly Saudi Arabia following the award of Expo 2030 in Riyadh, as well as India (39%) and the Asia Pacific region (excluding China, with 34% of preferences).
The real driver of fashion in 2024 is travelling: “It is the first year in which we are recording travel levels higher than those of 2019 – confirms Gemma D’Auria, Senior Partner at McKinsey. 80% of the consumers, we interviewed for the State of Fashion Consumer Survey 2024, will shop while travelling, and of these, 28% plan to spend more. Many people will not travel to the same places: more than half said they are looking for new destinations to live cultural experiences, also related to food”. According to D’Auria, this shift towards experiences is an opportunity of development for fashion and luxury brands: ‘It can promote an ecosystem of partnerships between fashion and hospitality, fashion and entertainment”.
Among the factors of growth in 2024 and in the coming years, along with this mix between brands, products and experiences, that are relatively new (especially luxury, in fact, has various lifestyle experiences under its belt), “The State of Fashion” report identifies two key strands: the world of the outdoors, with a renewed interest in both sport disciplines and a push for a healthier life, which grew during the pandemic, and the use of generative AI which for 73% of the executives interviewed will be a priority in investments for 2024: «Despite the fact that people have started putting on jackets again to go to the office – explains D’Auria – the desire of a healthier lifestyle is leading to look for garments and accessories that combine style and functionality.
We experience it in the performance of sportswear and outdoor brands, which continue to be positive.” If this change of direction is already a recognizable reality in the performance of brands dictated by consumer choices, the AI challenge has much more the contours of a bet for the future: «Generative AI will have a very disruptive impact and companies are starting to think about how it can be used to increase human capabilities in creative processes to limit waste and be more efficient”.
The State of Fashion 2024: Riding Out the Storm | BoF (businessoffashion.com)
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