The apparel sector will have many difficulties in 2024. Sustainability and greenwashing are important concerns, and there is an increasing need for real eco-friendly methods. Resilient methods are necessary in light of supply chain disruptions caused by climate change and geopolitical tensions.
Consumer spending is impacted by both high inflation and economic downturns. Threats to cybersecurity, diversity, and inclusivity are still major issues. Challenges include textile waste, digital change, e-commerce returns because of fit concerns, and talent retention.
To satisfy customer expectations and be competitive in this changing market, brands need to embrace creative ideas, make technology investments, retain transparency, and promote sustainable practices.
In 2024, the fashion sector will have to negotiate a challenging terrain. These problems, which range from digital transformation to sustainability, call for creative answers. The top ten obstacles that the fashion industry must overcome this year are as follows:
1. Sustainability and greenwashing
According to the UN Environment Programme, the fashion industry is one of the most polluting industries, contributing 8–10% of carbon emissions worldwide and generating 92 million tonnes of garbage annually. Customers want more from firms than just green-washed marketing slogans; they want transparency and true sustainable operations. According to a McKinsey report, 67% of consumers think that using sustainable materials is crucial when making a purchase. Brands that don’t implement true sustainable practices run the danger of losing market share and customer trust.
As customers grow more conscious of the effects their purchases have on the environment, particularly when it comes to clothing, sustainability is still a crucial concern. Companies need to show that they are making genuine attempts to lessen their carbon footprints, not just making platitudes. This entails making clothing out of environmentally friendly materials, implementing the ideas of the circular economy, and enhancing supply chain traceability. Businesses that use recycled materials and open supply chain methods, like Stella McCartney and Patagonia, have set an example. However, the financial and practical difficulties of putting such protections into place can prove too much for smaller brands to handle. The secret is striking a balance between sustainability and profitability, which may be done by forming clever alliances and creative business plans.
Another major worry is greenwashing, which is the practice of making false claims about a product or service’s environmental benefits. Brands need to make sure that their sustainability claims are supported by credible facts since consumer watchdogs and regulatory agencies are growing increasingly watchful. Establishing third-party certifications and following global guidelines can assist brands in gaining credibility and avoiding the traps associated with greenwashing.
2. Supply chain disruptions
Significant supply chain disruptions are still being brought on by geopolitical conflicts, inflation, and climate change. Supply chain disruptions were listed as the top challenge by 56% of fashion executives, per a Deloitte survey. In order to reduce these risks and guarantee seamless operations, businesses must create flexible, agile supply chains with real-time visibility and a variety of sourcing tactics. Proactive management is possible by tracking and anticipating disruptions with the use of technologies like blockchain and artificial intelligence.
The COVID-19 epidemic brought attention to the weaknesses in international supply networks, which resulted in delays, higher expenses, and a suspension of production. The fashion and apparel sector has to reconsider its supply chain strategies in light of the global disruptions caused by climate change and the persistent geopolitical conflicts. Reshoring and nearshoring have become practical ways to lessen reliance on far-off manufacturing centres. Clothes production can be moved closer to home markets, which will let businesses respond to changes in the market faster, with better quality control and shorter lead times.
Investing in technology is essential to supply chain modernisation. Blockchain can improve transparency and traceability, while AI helps optimise demand forecasts and inventory management. With the help of these technologies, firms can keep an eye on their supply chains in real time, spot possible bottlenecks, and react quickly to disturbances. Further enhancing supply chain resilience can be achieved by diversifying procurement alternatives and cultivating strong connections with suppliers.
3. Economic downturn and inflation
Consumers are tightening their budgets due to record-high inflation and economic uncertainty, which has an impact on their spending on non-essential items like fashion. Global inflation is expected to stay high in 2024, hovering at 5.9%, according to the International Monetary Fund (IMF). In order to maintain consumer loyalty without sacrificing profitability, brands must carefully balance their pricing strategies, emphasising value and quality. Sales may be sustained by providing reasonably priced yet fashionable options and highlighting the robustness and adaptability of items.
A major concern in light of customers becoming more frugal with their purchasing is economic unpredictability. Sales of luxury labels may be on the wane, and quick fashion shops may come under more scrutiny for their environmental policies. Brands must investigate new revenue streams and implement flexible pricing strategies in order to succeed in this environment. For example, rental services and subscription models might draw in budget-conscious customers and provide consistent revenue.
Investing in innovation and quality can also help you weather economic downturns. Investing in long-lasting, multipurpose items with good value is more likely to appeal to consumers. In order to attract socially conscious consumers, brands can also highlight their environmental and ethical initiatives. Brands may stand out in a crowded market and increase consumer loyalty with the help of marketing efforts that accentuate these characteristics.
4. Cybersecurity threats
The danger of cyberattacks increases as fashion firms use digital platforms more and more. Current high-profile examples highlight the industry’s vulnerability. For example, the Italian fashion brand Moncler was hit by a ransomware attack in 2021, and as a result of the company’s refusal to pay a $3 million ransom, stolen data of customers, suppliers, consultants, and staff was made public. Comparably, French Connection was the target of a ransomware assault that exposed confidential company data by taking advantage of a security flaw.
The average overall cost of a retail data breach in 2024 was $4.88 million, according to IBM’s Cost of a Data Breach Report. These expenses were significantly increased by the complexity of the systems and the noncompliance with regulations. Fashion firms must secure strong cybersecurity, data encryption, and privacy legislation in order to preserve sensitive client information and foster trust.
Because they own high-value data, such as intellectual property, product-specific data, and the personal information of high-profile clients, luxury brands are particularly appealing targets. These dangers can be reduced by making frequent staff training investments in data protection procedures and cybersecurity infrastructure. In order to lessen the appeal of brands as cyber targets and protect against any breaches, it is also crucial to perform technical audits, examine supplier chains, and put in place thorough cybersecurity procedures.
The advent of digital transformation and the growth of e-commerce has made fashion firms easy pickings for cybercriminals. Significant financial losses and reputational harm to a brand can result from data breaches. Consequently, it is essential to invest in strong cybersecurity measures. This entails putting multi-factor authentication into practice, conducting frequent security assessments, and fully encrypting data.
An additional critical component of cybersecurity is employee training. Since staff members are frequently the weakest link in cybersecurity defences, phishing attempts can be identified and data protection should be prioritised. To promptly handle and lessen the effects of any security breaches, brands should also create incident response plans.
5. Inclusivity and diversity
The fashion business still has issues with diversity and inclusivity in its workforce and product offers. The CFDA and PVH Corp.’s “State of Diversity, Equity & Inclusion in Fashion” report emphasises the industry’s formidable obstacles to diversity, equity, and inclusion, especially with regard to racial equity and talent acquisition and retention.
This report comprised 20 stakeholder interviews, three focus groups with students and young designers, and a survey of over 1,000 industry professionals from 41 firms. It is based on research and analysis conducted by McKinsey & Company. The results highlight how, in order to appeal to a diverse consumer base, firms must embrace a wider range of sizes, genders, and races in their collections and marketing initiatives.
Encouraging diversity in advertising and fostering an inclusive workplace culture can increase customer loyalty. Six main areas of potential are identified in the report: awareness, access, advocacy, promotion, remuneration, and belonging. These categories offer a framework for organisations to enhance their corporate culture and develop a talent pipeline from under-represented cultures.
Consumers now hold inclusivity and diversity in high regard, particularly younger generations. Although the fashion industry has long faced criticism for its lack of diversity, efforts to address these concerns have stepped up in recent years. Fashion and beauty brands such as Fenty Beauty and Savage X Fenty by Rihanna, which provide a broad selection of sizes and colours to accommodate a varied customer base, have raised the bar for inclusivity in these fields.
Brands need to make sure that the variety of their client base is reflected in the products they sell in order to promote inclusion. This entails broadening the range of sizes offered, developing collections that are gender-neutral, and using models with a variety of ages, ethnicities, and body shapes in their advertising campaigns. Brands should actively encourage diversity in leadership roles and recruiting practices in order to foster inclusive environments.
6. E-commerce returns and fit issues
Higher return rates—often because of fit problems—have resulted from the growth of e-commerce. According to the National Retail Federation, in 2023, 14.5% of all fashion purchases made online were returned. By giving clients precise sizing information and tailored recommendations, virtual try-on tools and superior fit technology can help minimise returns. Reducing return rates and improving the online shopping experience can both be achieved by using AI to analyse return patterns and improve product descriptions.
In addition to bringing forth new difficulties, e-commerce has revolutionised the fashion sector. For retailers, high return rates resulting from fit and product expectations problems are expensive. In order to ensure that clients obtain the correct size the first time, advanced fit technologies like virtual try-on systems and 3D body scanning can assist reduce this issue. Furthermore, correct expectations can be formed and the possibility of returns can be decreased with the aid of thorough product descriptions, excellent photographs, and customer evaluations.
7. Textile waste management
An annual million tonnes of textile waste are produced by the fashion industry. Less than 1% of clothing is recycled into new items, according to the Ellen MacArthur Foundation. Waste can be greatly decreased by implementing closed-loop systems, in which used clothing is recycled into new items. Solving this problem will require advancements in biodegradable textiles and effective recycling techniques. With their recycling collections and take-back initiatives, companies like Circle Sportswear and Patagonia are setting the standard.
We at Heuritech adore Circle Sportswear, a French company that is revolutionising sustainability in the sportswear industry. The design and production procedures of Circle Sportswear demonstrate their dedication to sustainability. Their products are made to be completely recyclable, so you can easily turn old clothes into new ones. SuperNatural Runner, their most recent invention, is an excellent example of this strategy. Because it is designed to be easily disassembled after usage, every part can be efficiently recycled and used to create new goods.
Millions of tonnes of textiles are disposed of in landfills annually as a result of the massive waste problem in the fashion sector. A multifaceted strategy is needed to address this problem. Companies should make investments in closed-loop recycling programs that gather used clothing, disassemble it, and make new items out of it. The environmental effect of the fashion industry can also be lessened with the advancement of sustainable and biodegradable fabric technologies. In order to reduce textile waste, it is also essential to educate customers about sustainable methods of use and disposal.
8. Adapting to digital transformation
The fashion and apparel business is undergoing a digital shift. Brands need to invest in cutting-edge technologies to improve consumer experiences and optimise operations, from augmented reality (AR) for virtual try-ons to AI-powered personalisation. 75% of fashion executives intend to invest in digital innovation in 2024, according to a Business of Fashion and McKinsey survey from 2024. Businesses can gain a competitive edge by adopting these technologies, which can increase customer satisfaction and operational efficiency.
Technological developments in AI, AR, and machine learning are propelling the fashion industry’s digital revolution. Companies that want to remain competitive and satisfy the changing needs of tech-savvy customers need to take advantage of these technologies. Supply chain optimisation, trend prediction, and personalised buying are all possible with AI. Through virtual try-ons made possible by augmented reality, shoppers can see how things would appear on them, improving the online purchasing experience. Adopting these technologies can boost productivity and consumer happiness.
Using digital solutions can also lead to chances for improved inventory and production management efficiency. For instance, demand forecasting powered by AI can assist firms in cutting waste and overproduction. Tools for digital product development can expedite the design process, allowing for a quicker time to market and lower expenses. Clothing companies may maintain their flexibility and responsiveness to market developments by embracing digital change.
9. Attracting and retaining talent
The lack of skill in the fashion sector is made worse by low pay and a bad reputation for sustainability. In order to draw in highly qualified individuals, companies should provide competitive pay, welcoming work environments, and chances for professional advancement. Developing a lively and upbeat work atmosphere can improve employee retention and happiness.
In the fashion industry, attracting and keeping great talent is a constant problem. Because of the industry’s bad image for low pay and unfavourable working conditions, skilled people are less drawn to it. In order to get around this, companies need to enhance their employer value proposition by providing prospects for professional advancement, competitive benefits, and high pay. Furthermore, cultivating a welcoming and encouraging work environment can draw in a varied talent pool and increase employee retention.
Clear career advancement pathways, ongoing learning opportunities, and mentoring programs can all improve employee happiness and loyalty. Additionally, brands ought to concentrate on developing a supportive workplace that encourages ingenuity, cooperation, and creativity. Businesses can create a solid, driven team that can propel development and innovation by investing in their staff.
10. Consumer trust and transparency
Gaining the trust of customers is more crucial than ever. The 2024 Edelman Trust Barometer indicates that a sizable segment of the public is dubious about the veracity of sustainability claims made by companies. According to the report, only 56% of people worldwide (including 39% of people in the UK, which received the lowest score) believe that firms are trustworthy overall, with the fashion industry being particularly sceptical. Fashion firms need to be more open about their sourcing, production methods, and sustainability initiatives in order to address this. Product traceability and standardised environmental impact assessments using blockchain technology might help restore confidence and show a sincere commitment to moral behaviour.
Gaining the trust of customers is essential to success in the fashion sector. As consumers become more conscious of environmental and social issues, they are asking firms to be more transparent. By giving transparent, verifiable information about their sourcing, production, and sustainability initiatives, businesses may foster confidence. In this sense, blockchain technology might be a useful tool for firms to offer legitimacy and traceability for their products. Standardised assessments of the environmental impact can also assist brands in showcasing their dedication to moral behaviour.
Establishing trust requires open and honest communication. In terms of their sustainability efforts, brands ought to be transparent about their struggles and advancements. Using blogs, social media, and other platforms to interact with customers can help create a feeling of community and loyalty. A brand’s products’ ethical standards can be further reassured to consumers by third-party certifications like Global Organic Textile Standard (GOTS) and Fair Trade.
How Worldglamz Can Help
Fashion firms may effectively tackle these difficulties by utilizing Worldglamz sophisticated AI-driven social media research tools, which offer insights into consumer trends, forecast market movements, and provide data-driven recommendations for product creation and marketing tactics. Brands can stay ahead of the curve and handle the intricacies of the fashion industry in 2024 by utilizing Worldglamz technologies.
Comprehending these obstacles and putting strategic solutions into place will help fashion firms not just survive but flourish in 2024. Worldglamz is here to help you navigate the dynamic and constantly changing fashion scene by providing you with cutting-edge technologies and useful insights.
