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How is the Fashion Industry Doing in Times of Economic Instability?

The new RetailX Global Fashion 2024 report sheds light on the fashion industry's tumultuous journey from peaks in 2021 to troughs in 2022. It attributes the fluctuations to the interplay of global economic dynamics and geopolitics.

How is the Fashion Industry Doing in Times of Economic Instability?
Source: Depositphotos

In the wake of the war in Ukraine, energy prices spiked in early 2022, triggering a domino effect on global supply chains and the movement of goods. This spike in inflation has had a significant impact on fashion retailers as material, production and transport costs have skyrocketed, reducing profit margins. As a result, consumers have had to cope with sharp price increases across the sector, which has reduced their willingness to spend money.

Africa bore the brunt of soaring inflation and saw a sharp decline in fashion sales. In contrast, Asia weathered a milder inflationary storm, easing the impact on fashion retail sales.

Encouragingly, recent data suggest a rapid decline in inflation across all regions, accompanied by a positive response in fashion sales. However, with continued global uncertainty due to geopolitical conflicts and tensions, fashion sales forecasts for 2024 are challenging.

Post-pandemic enthusiasm

Following the pandemic and the economic turmoil, consumer interest in fashion has increased significantly. However, we can expect to see an increase in spending on clothing, footwear and accessories in some regions. This trend is particularly expected in countries such as India, China and the Middle East. Fashion could take second place behind food in the predicted ranking of increased spending, indicating a continued recovery and consumer interest in fashion after the pandemic.

Access to organic products is growing

“Sustainable fashion is now an important part of the industry and consumers love it. 46.4% of global shoppers bought sustainable clothing last year, more than any other retail sector. A third bought sustainable footwear and a fifth sustainable accessories,” the RetailX report said.

Social media as a sales channel

Fashion brands are actively using social media to interact with customers and drive sales. The popularity of user and influencer content on platforms such as TikTok is changing the way brands reach customers and influence their purchases. This new approach to advertising and the business of fashion has the potential to influence the future of fashion in the commercial space.

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