The Fashion and Apparel Industry is a behemoth in the global economy. Making up 2% of all global GDP, clothing generates over three trillion dollars every year. The upsides for a successful clothing company are nothing short of massive. Approximately 80% of the industry is concentrated in the womenswear, menswear, and luxury goods segments. However, companies are moving into new lines and expanding the definition of apparel. Several plus-size clothing companies are finding success serving a highly relevant but historically underserved demographic. Cookware and ‘athleisure’ are also niche segments rising quickly. Companies expanding into new segments should be cautious of encouraging substitution. An increase in yoga pants sales has been associated with a decrease in leggings sales.
The size of the industry has been steadily growing for many years. The number of people employed by the industry has more than doubled since the turn of the century. With other fifty million people employed, the industry has proven to be a substantial job creator all over the world. With the clothing and textile trade representing $726 billion, the industry offers countless lucrative opportunities.
Emerging Markets on the Rebound
Of late, much of the excitement surrounding emerging markets have cooled. Only a few short years ago, China, Russia, and much of the middle east seemed poised to be bright new frontiers for the fashion industry’s growth. However, global developments have thrown these predictions into question. China’s economic growth has at long last stalled, and Russia has weathered damaging economic sanctions. Many of the most promising emerging markets rely heavily on oil, and the plummeting price of oil have put their economic futures into question. However, there is still good reason to invest in emerging markets. Rumors of a coordinated output reduction by OPEC and non-OPEC oil producing nations has fueled hopes that oil-reliant nations will partially recover. Despite the economic worries, many fashion related investments have gone forward unimpeded. A $30 million luxury mall refurbishment in Kazakhstan has gone unimpeded, and major developments in Egypt, UAE, Quatar, and Saudia Arabia are not expected to be threatened by economic downturns. For its part, Russia has adapted to the sanctions by adjusting their retail model. Several multi-brand stores shops are being opened and many malls are switching from charging a fixed rent to a percentage share of the turnover. While economic uncertainty should never be underestimated, there are still many reasons to be optimistic about an international business’ future.
New Online Models
Like every consumer good industry, fashion and apparel has been heavily impacted by e-commerce and mobile apps. Many companies have found success carving exclusive niches on Facebook Shop. These online platforms have provided excellent opportunities for new entrants to establish their brand. And customers are highly engaged with these online stores. Nearly two thirds of all shopping occurs online. However, only 19% of all sales take place on these platforms. What this tells us is that customers are using sites and apps primarily to research offers and compare prices, with the actual purchases still being made in stores.
To best take advantage of this, companies need to not only have a comprehensive online presence, but partner with reliable and innovative stores. Many stores have turned to using big data to run more efficiently. Chico’s has recently experimented with providing its workers tablets to use data to provide the best service possible. These retail partners will serve clothing companies well as the line between online and off continues to blur.
Finding Strategic Partners with Powerlinx
With all the changes facing the Apparel Industry, it’s vital that companies build a strong network of strategic partners. Powerlinx has worked tirelessly to create an unprecedented B2B network to help businesses find, evaluate, and connect with investors and supply chain partners. As the Fashion Industry becomes more fast paced and unpredictable, companies must have lean, nimble, and reliable supply chains to adequately compete. Lisa Harrington, president of the Lharrington Group, stated that clothing companies need, “to serve markets around the world with a supply chain that is resilient enough to withstand shocks, agile enough to respond quickly to sudden or unexpected change, flexible enough to customize products and efficient enough to protect margins.”
Powerlinx is a pioneer in the B2B space. The proprietary PowerScore™ algorithm provides a quantitative score so companies can quickly and easily measure their compatibility with a potential partner. Every day, Powerlinx helps apparel companies source warehouses, establish distribution channels, find suppliers and manufacturers from all over the world, and connect with retailers and specialists. With millions of companies present and new opportunities added daily, Powerlinx is a valuable tool for fashion companies looking to succeed.