Trends dominating the industry, and how we’re addressing them
The Business of Fashion and McKinsey & Company have partnered to release the annual “The State of Fashion Report” for 2022. Their analysis is based on interviews with top industry executives and an expansive industry survey, outlining what businesses are expecting in the coming year and how they are preparing.
Here are ten of the report’s key findings, and how Kornit is working to address these developments in the global fashion industry:
Uneven Recovery – Recovery COVID-19-related economic shocks will be uneven across consumer markets and sourcing regions, as countries with strong healthcare systems and economic resilience outperform. In this patchy environment, fashion players with international footprints will need to look at investment decisions with precision, reassessing local conditions regularly while mitigating for market-specific risks. Kornit Digital’s sustainable, on-demand production capabilities are exactly what they need to produce quickly, and with the agility to meet market demands accurately, in real time.
Logistics Gridlock – The fashion industry is reliant on an intricate web of global supply chains that are seeing unprecedented levels of pressure and disruption. With logistical logjams, rising shipping costs, and shortages of many kinds adding new layers of complexity, companies must rethink their sourcing strategies while implementing cutting-edge supply chain management, and building in greater flexibility to keep products flowing with customer demand. With Kornit, you can bypass such complexity and focus on producing exactly what is needed, with minimal need for logistics, storage, and other persistent sources of risk, cost, and headache.
Domestic Luxuries – Travel has traditionally been a key driver of luxury spending, but international tourism is not expected to fully recover until 2023 or 2024. To capture the shift in shopping patterns set to shape the year ahead, luxury players should engage more deeply with domestic consumers, rebalance their global retail footprints and duty-free networks, and invest in clienteling for local e-commerce channels. Kornit Digital’s workflow technology enables streamlined coordination with any local designers or brands, creating opportunities to respond immediately to local market needs, independently of foreign consumer needs.
Wardrobe Reboot – After focusing on the likes of loungewear and sportswear for nearly two years, consumers will reallocate wallet share to other categories as pent-up demand for newness coincides with more social freedoms outside the home. To anticipate these nuanced and sometimes paradoxical preferences, brands should lean more on data-driven product development, adjusting their inventory mix accordingly to ensure that assortments resonate with consumers adjusting to new lifestyles. Our new technology takes creativity to the MAX, and will allow any fashion brand to create outfits that will make everyone want to leave their pajamas and go out with their amazingly printed look.
Metaverse Mindset – As consumers spend more time online and the hype around the metaverse continues to cascade into virtual goods, fashion leaders will unlock new ways of engaging with high-value younger cohorts. To capture untapped value streams, players should explore the potential of nonfungible tokens, gaming, and virtual fashion — all of which offer fresh routes to creativity, community-building, and commerce. Kornit technology can easily provide interpretation to the unreal and make the move from one mindset to another: doable.Our audience at Kornit Fashion Week Los Angeles saw Kornit’s first step into the metaverse with Placebo, and we’re planning to do much more in the virtual world and marketplace. Stay tuned!
Social Shopping – Social commerce is experiencing a surge in engagement from brands, consumers, and investors alike as new functionality and growing user comfort with the channel unlocks opportunities for seamless shopping experiences from discovery to checkout. Though use cases differ across global markets, brands should double down on tailored in-app purchase journeys and test opportunities in technologies such as livestreaming and augmented reality try-on. Kornit Digital empowers brands to bring social media-born inspiration to life quickly, with an on-demand production mechanism suited for today’s web-native, see-now-buy-now consumer; one prominent Kornit customer’s business is largely driven by what they call an “Etsy army” of creators seeking immediate fulfillment of their creations.
Circular Textiles – One of the most important levers the fashion industry can pull to reduce its environmental impact is closed-loop recycling, a system that is now starting to be rolled out at scale, promising to limit the extractive production of virgin raw materials and decrease textile waste. As these technologies mature, companies will need to embed them into the design phase of product development while adopting large-scale collection and sorting processes. Our on-demand technology is all about transforming traditional production mechanisms and avoiding textile waste, by enabling fulfillers and brands to produce only what is required. Establishing this standard across the textile and fashion industries will decrease their environmental impact considerably.
Product Passports – In a bid to boost authentication, transparency, and sustainability, brands are using a portfolio of technologies to store and share product information with both consumers and partners. To get the most from these digital “product passports,” which can help brands tackle counterfeiting, differentiate themselves, and build loyalty by enhancing consumer trust, businesses must coalesce around common standards and engage with pilot projects at scale. Traceability and transparency are top priorities at Kornit Digital, and our technology allows the producer to communicate exactly what went into each garment delivered.
Cyber Resilience – As the digitization of fashion businesses reaches new heights, companies face more threats of cyber attacks and growing risks relating to improper data handling. Amid increased sophistication in cyber crime and rises in consumer and regulatory pressure, brands need to act urgently to shore up their defenses and invest more to make digital security a strategic imperative. Kornit technology empowers brands and fulfillers to streamline the workflow of orders from POS to shipment of finished product, and eliminate the vast complexities and risk associated with sourcing from, and producing in, locales far from the end-consumer. By simplifying and shortening the entire process, businesses following Kornit’s on-demand production model mitigate their exposure to risk, ensuring greater resilience.
Talent Crunch – Companies that rely on brand appeal or the allure of fashion to attract and retain talent will need to raise their game as competition from both within and outside the industry intensifies, leading to more vacancies next year. As employees from upper management to the retail front line reconsider their priorities, companies must refresh their talent strategies for an increasingly flexible, diverse, and digitized workplace. At Kornit Digital, we care about society and the environment, and therefore we recently released our first Environmental, Social, and Corporate Governance (ESG) report focusing on our intent to reduce carbon footprint and promote ethical business practices, from production to the way we make our employees feel when they come to work.
Consumers, their demands, their expectations, and the way they interact with brands is constantly in flux, and any business that remains too fixated on how things were done 20 years ago (or even two years ago) is not long for this world. These ten trends and developments are real and unlikely to be reversed, so adapting is critical to success and growth. Kornit is here, and constantly developing new capabilities to meet challenges to come, to make your business more agile, more sustainable, and better positioned to capitalize on the marketplace The Business of Fashion and McKinsey & Company has clarified.