The Four Trends Impacting the Global Fashion Industry in 2018

fashion industry trends 2018

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Over the last five years, the fashion industry has felt the same pangs as the rest of the retail world. However, unlike some industries, there have been bright pockets. Apparel brands, especially those with fast fashion or direct-to-consumer models, that have been able to quickly innovate to meet consumer needs have seen success.

At Bazaarvoice, we have a client base of over 5,700 brand and retailer websites, a large number of which are in the fashion and apparel space. As an Account Director on our Client Success team, I partner with some of our largest global retailers. Along with the rest of our Client Success and Sales teams, I work closely with our clients to understand their goals and pain points. Because of this, we have deep insight into industry trends. To get a broad understanding of trends impacting our fashion and apparel clients, I reached out to Client Success and Sales team members across the organization. What were their clients’ concerns for 2018? How are they trying to innovate in the year ahead? Based on that insight, these are the four fashion industry trends to stay on top of in 2018. 

fashion industry trends 2018

Staying competitive in a uniquely crowded market

Competition is a concern for any business, regardless of industry. But today’s retail environment is particularly challenging. Not only do brands have to adjust to changing consumer trends and preferences but also to an industry with a wide variety of players, including fast fashion, direct-to-consumer, and Amazon.

Account Executive Austin Rindner says, “There is a ton of increased competition in apparel. High end apparel brands are facing significantly more competition from fast fashion and other cheaper alternatives. Amazon is starting to dip the into the apparel space, which is another concern.”

Fast fashion brands like H&M, Zara, and ASOS have disrupted the industry by meeting a previously untapped consumer need — on trend clothing and accessories for a lower price. These brands can turn around new products in fewer than six weeks from conception to shelf, and their success is forcing the rest of the fashion world to keep up. According to McKinsey’s 2018 State of Fashion report, “sales of the traditional fast fashion-sector have grown rapidly, by more than 20 percent over the last three years.”

In 2018, fashion brands have prioritized innovation to stay competitive with consumers who expect trendy inventory. Mandy Oettmeier, Client Success Director, says that “increasing efficiencies and productivity within inventory management and supply chain” is a major focus area for many of her fashion and apparel clients.

When talking about competition, it would be remiss not to mention Amazon. Over the last year, the e-commerce giant has made a lot of moves to expand its reach, including acquisitions and forays into new markets. Andy Fryer, an Account Executive in our Asia-Pacific region, said, “Amazon just launched here in Australia. It’s not really a massive threat to fashion and apparel right now, but only time will tell.”

In addition to new markets, Amazon has been breaking into new verticals and has recently begun to make more aggressive moves to establish itself in the apparel space. The company has quietly rolled out its own fashion lines over the last two years, but, in late 2017, it branched out from basics with a trendier line called Find and its own athletic apparel collection, Goodsport. Austin added that, “Alexa has started to offer fashion advice like a personal wardrobe consultant. This gives Amazon even more direct insight into their customers that traditional brands and retailers struggle to access.” Just recently, Amazon announced that it was increasing its fees for the clothing and accessory category, making apparel the most expensive category to sell on Amazon.

The fashion industry is uniquely competitive, and that doesn’t show signs of changing anytime soon. Brands that don’t innovate fast enough will be left behind. 

fashion industry trends 2018 omnichannel

Delivering a seamless experience across all consumer touchpoints

Omnichannel — the concept of integrating all of your consumer touchpoints (social media, brick-and-mortar, online, mobile, etc.) to provide a seamless customer experience — has dominated industry conversation for the last five or so years. A headline of a Forbes article last year asked, “Can We Stop Saying Omnichannel And Just Say Retailing?”. While we might be tired of hearing the word, omnichannel should be table stakes for fashion brands. However, the reality is that many still struggle to figure it out.

Many of our fashion and apparel clients have prioritized providing an omnichannel experience for 2018. But first, to be able to do this, they need to get a grasp on their customers. In conversations with our clients, there was a desire to better understand their customers, especially a holistic view outside of their own properties. This means getting a handle on customer data. Technological innovation has given brands the opportunity to collect mass quantities of customer data, but the problem becomes making sense of it and putting it to work in the right way.

Brick-and-mortar, online, social media, mobile, and customer service are major customer touchpoints, and, therefore, major priorities for any omnichannel strategy. Our different apparel clients are focused on different areas. For example, Ashley Knowles, Client Success Director, says that “while one client is working towards a successful mobile app launch, another is trying to improve their in-store experience, and both see a truly omnichannel experience as a priority.” Similarly, Mandy says her fashion clients want to “accelerate their online and mobile businesses, try to meet customers where they are, better manage big data, and deliver buy online, pick up in-store and order in-store options.”

Whether focused on improving one particular channel or the journey as a whole, it’s clear from talking to many brands and retailers in the fashion industry that a seamless customer experience is still a goal that many are working towards.

fashion industry trends 2018 competition loyalty

Fostering brand loyalty with customers who have infinite choices

Once you reach and convert customers, how do you keep them? The rapid innovation and growth in the fashion industry has created new standards in retail, but, more importantly, it’s created new standards in consumer expectations. Shoppers can choose from a never ending list of brands and products. In addition to competing for new customers, fashion brands are investing in ways to keep the customers they have.

There are a variety of ways that today’s fashion brands foster loyalty — social media, rewards programs, mobile apps, discounts — but if you don’t have a memorable, quality product, you will lose customers right away.

The issue of returns is particularly challenging for the fashion industry, as customer experience relies heavily on fit. 80% of first time customers who experience a return will never shop at that retail website again. Carla El Gawly, Account Director for many of our European fashion clients, reinforced that the high rate of returns in fashion, particularly for e-commerce, remained an issue for her clients and results in major hits to sales and loyalty. Many retailers say that 20-40% of their online sales are returned, with fit being the #1 reason. On the flip side, 85% of consumers saying they go back to a brand specifically because of how it fits them. One way I have seen retailers combat this challenge is with specific efforts to get more information about fit into customer reviews. While the industry has begun to reduce returns and better align with customer expectations, this issue remains an obstacle to brand loyalty.

Whether working with recognizable influencers on social media or relaunching a mobile app, a number of our apparel clients are working on various programs to foster brand loyalty. No matter the tactic, loyalty comes down to building trust and positive relationships with consumers. In the world of fashion and accessories, this starts with having a quality product.

fashion industry trends 2018 personalization

Investing in and delivering on personalization promises

As it turns out, there’s a way that fashion brands are attempting to solve for their struggles with competition, omnichannel, and loyalty: personalization. Providing a 1:1 customer experience emerged as the biggest theme amongst our fashion and apparel clients, and McKinsey named personalization as the #1 trend for the fashion industry in 2018:

“Personalisation and curation will become more important to the customer. As consumer values coalesce around authenticity and individuality, brands will value data even more to tailor recommendations, engage influencers, and personalise experiences. The fashion companies that flourish will re-focus on their strengths.” 

Like omnichannel, successful personalization starts with consumer data. Research, including our own, shows that most consumers are comfortable with companies collecting personal data, as long as it “leads to products and services that make their lives easier, more entertaining, educate them, and save them money.

If brands tap into their consumer data, they can serve up content and recommendations that align with an individual’s preferences and shopping intent. In our own research, 66% of fashion and apparel shoppers said that a personalized shopping experience and product recommendations are somewhat or very important. Without personalization, brands risk providing an inaccurate or unremarkable customer experience and losing potential customers. According to a report from Boston Consulting Group, apparel retailers that have implemented personalization strategies see sales gains of 10% or more, a rate three times faster than other retailers.

Fashion brands are still figuring out how to provide personalization at scale, but, this year, many of our clients have made a commitment (and an investment) to deliver. John Sheffield, Account Executive, went as far to call 2018 the year of personalization: “Apparel brands are looking to customize the user experience through ads, recommendations, visual commerce, and display. It seems like many of my clients are investing in giving their web experience a facelift or a full overhaul. They are always exploring personalization and display advertising technologies.”

In this industry in particular, consumers are looking for clothing and accessories that help them express their personal style. It follows that when looking for products that reflect their individuality, these shoppers expect an individualized experience with a brand.


If one thing was clear across all of our apparel clients, it was that no one brand has everything entirely figured out. Whether it’s logistics, omnichannel, loyalty, or personalization, fashion brands are investing in innovation that will keep them ahead of their competitors. McKinsey predicts that the apparel industry will grow 3.5-4.5% in 2018. However, that won’t be evenly split across fashion players. When it comes to this industry, fortune will favor the bold.

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Superbalist, Spree merger sets the stage for new e-fashion gem

Author: Khulekani Magubane

Cape Town – Media24 will be the 51% owner of a new venture which will arise from a merger between Naspers-owned online fashion retailers Spree and Superbalist, the media company and Takealot announced on Monday.

The merger is set to be sealed on July 1. According to the statement, the merged entity will undergo a three-month period of integration planning and implementation. During this period, each business will continue to operate independently before final integration.
Takealot CEO Kim Reid said the merger presents an opportunity to accelerate growth in its online fashion retail business locally. Media24 CEO Esmaré Weideman  said e-fashion remains central to the business’ growth portfolio to ensure a diversified and sustainable future for Media24.

Media 24 and Takelot.com said the merger between Spree and Superbalist is the next natural step in creating an entity with the best of both business’ strengths.

“There is currently no integration between Spree and Superbalist, both part of the Naspers group, with each business running its own sourcing and buying, technical, marketing, warehousing and logistics functions while primarily targeting a similar, if not the same customer segment and demographic in South Africa,” the statement said.

The statement said the new venture would be held 51% by Media24 through its shareholding of Spree, while Takealot Group will own 49% of the venture. While Media24 will own 51%, Takealot will be responsible for day-to-day operations, the statement said.

“In South Africa the penetration of online retail sales is currently around 1%, while in the USA, China and the UK it is in excess of 13%. Clothing and footwear sales in the UK drive a large share of the growth of online retail with similar trends in the USA, China and India.

“This suggests that there is room to build a substantial position in the online footwear and apparel market in South Africa,” the statement said.

* Fin24’s parent company Media24 is part of the Naspers Group. 

Author: Khulekani Magubane

 

Why collaborative thinking beats individual smarts

An interview with Thomas Malone, author of “Superminds”, together with an extract from the book
Open Future
Jun 18th 2018

THREE decades ago Thomas Malone modernised how the business world thought about digital communications in organisations with a seminal paper, “Electronic Markets and Electronic Hierarchies”. It was 1987, before the commercialisation of the internet, yet he and his co-authors predicted “an overall shift toward proportionately more use of markets—rather than hierarchies—to co-ordinate economic activity”.

Evidence confirming that thesis is now everywhere. His book “The Future of Work” in 2004 foresaw “hyperspecialisation” in business, which has also come to pass. As a professor of management at MIT, Mr Malone has built on his earlier works to consider how new technologies and people can combine to create new kinds of productive entities, which he calls “superminds”—the title of his latest book.
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The Economist‘s Open Future initiative asked Mr Malone five questions with the stipulation that he reply in around 100 words each time. Below the interview is an excerpt from the book.

* * *

The Economist: What do you mean by “Superminds”? Human co-ordination has been going on for ages: why did you feel the need to coin a new term?

Thomas Malone: A supermind is a group of individual minds that are effective at working together to achieve goals. We’re surrounded by superminds, including hierarchical companies, global markets, governmental democracies, scientific communities, local neighbourhoods, and combinations of all these things. You’re right that these groups often need to co-ordinate in some way, but we don’t really have a good word that includes all the many different types of intelligent groups that exist. In the early drafts of my book, I called them “collectively intelligent systems”, but I think “superminds” is simpler and easier to remember…and it sounds cooler!

The Economist: You say that groups can make better decisions than smart individuals acting alone—and groups with women often do better. Why is this the case, and what does it mean for gender equality (and I stress “equality”)?

Mr Malone: Groups don’t always make better decisions than individuals, but they often do when they combine the different perspectives, skills and knowledge of their members. In our research, we found that groups in which the members were more socially perceptive were more collectively intelligent, presumably because they were able to work together more effectively.

Women—on average—are slightly higher on the measure of social perceptiveness we used than men, and this may be why groups with more women were more collectively intelligent. But many men have this skill, too, and what appears to matter is whether the individual group members have this skill, not what their gender is. That sounds like gender equality to me.

The Economist: You argue that groups of people “hyperconnected” with technology are smarter than artificial-intelligence systems. Please explain such a baffling assertion.

Mr Malone: I think I hear the irony in your voice! Even today’s most advanced AI systems have only specialised intelligence—the ability to do particular tasks. For example, the IBM Watson program that beat the best human Jeopardy player couldn’t even play tic tac toe, much less chess. But any normal human five-year-old has more general intelligence—the ability to do a wide range of tasks—than the most advanced computers.

A five-year-old kid, for instance, can converse sensibly about far more topics than any computer today. And as Wikipedia, Facebook and many other internet applications show, we can now connect the amazingly powerful information processors we call human brains to each other—and to computers—in rich new ways and at vastly larger scales than ever before.

The Economist: There seems to be a deep connection between the idea of superminds, markets and individual freedom—develop that a bit.

Mr Malone: Markets are one of the five types of decision-making superminds I describe in the book. And there’s a precise sense in which markets provide the most individual freedom of the five. In a hierarchy, you have to follow your boss’s orders. In a democracy, you have to abide by the majority decision. In a community, you are constrained by the community’s norms. And in an ecosystem, you are subject to the whims of those who are more powerful than you. Markets are the only type of supermind where you are not bound by any decision to which you didn’t agree.

The Economist: You note how institutions, whether companies or governments, have minds of their own, so to speak—and sometimes do things that are against the interests or even the will of their members. How can we control institutions better?

Mr Malone: Usually, the only way to control superminds is with other superminds. For instance, the investors, customers and employees of a company can all exercise some control over the company through the markets for capital, products and labour, respectively. Governments exercise control over companies through the legal system. In many countries, voters in democratic elections exercise control over governments. And community norms shape all the other superminds in a society. As individuals, we can sometimes get more of what we want by influencing these superminds, and the book has some guidelines about how to pick the superminds that are best for achieving different goals.

* * *

An Intelligence Test for Groups

From “Superminds: The Surprising Power of People and Computers Thinking Together” by Thomas W. Malone

Can groups be intelligent in the same way individuals are? Is there any objective way to say that some groups are smarter than others? In other words, is there a single statistical factor for a group—like there is for an individual—that predicts how well the group will perform on a wide range of very different tasks?

As far as my colleagues and I could tell, no one had ever asked this obvious question before. So we set out to answer it. For instance, we asked groups to brainstorm various uses for a brick, solve visual puzzles from a standard individual intelligence test, and type a long text passage into a shared online text-editing system. In all cases, the groups worked together on their assigned tasks as a group, not as individuals.

After we had given all the groups a chance to perform all the tasks, we analysed the correlations among them. It turned out that there is a single statistical factor for a group—just as there is for an individual—that predicts how well the group will do on a wide range of tasks. For individuals, this factor predicts about 30–60% of the variation on different tasks. For the groups in our studies, it was in the middle of that range—about 45%. Because this factor is called intelligence for individuals, we called our new factor for groups collective intelligence.

In other words, we found that groups have a form of general intelligence, just as individuals do. This means that, just as with individual intelligence, we may be able to use collective intelligence to understand much more about what makes groups effective on a wide range of tasks.

What makes a group smart?
Before we conducted our studies, we thought we might find a single collective intelligence factor for groups that was mostly predicted by the average individual intelligence of the group members—that is to say, the smarter the members, the smarter the group. But what we found was much more interesting.

First, we did find that the average and maximum intelligence of the group members was correlated with the group’s collective intelligence, but this correlation was only moderately strong. In other words, just putting a bunch of smart people together doesn’t guarantee that you’ll have a smart group. You might guess that from your own experience: most of us have seen plenty of groups of smart people who couldn’t get anything useful done. But if just having a bunch of smart people in a group isn’t enough to make the group smart, what is?

We looked at a number of factors that previous research suggested might have predicted how effective a group would be, such as how satisfied the group members were with their group, how motivated they were to help the group perform well, and how comfortable they felt in the group. None of these factors was significantly correlated with the group’s collective intelligence.

But we did find three factors that were significant. The first was the average social perceptiveness of the group members. We measured this using a test called “Reading the Mind in the Eyes”, in which people looked at pictures of other people’s eyes and tried to guess the mental state of the person in the picture (see below; answers at the end of the excerpt). This test was originally developed as a measure of autism—people with autism and related conditions do very poorly on the test—but it turns out that even among “normal” adults, there is a significant range of people’s abilities to do this task well.

You might call this a measure of a person’s social intelligence, and we found that the groups in which many of the members were high on this measure were, on average, more collectively intelligent than other groups.

The second important factor we found was the degree to which group members participated about equally in conversation. When one or two people dominated the conversation, the group was, on average, less intelligent than when participation was more evenly distributed.

Finally, we found that a group’s collective intelligence was significantly correlated with the proportion of women in the group. Groups with a higher proportion of women were more intelligent. But this result was mostly explained statistically by the measure of social perceptiveness.

It was already known before we started our research that women, on average, score higher on this test of social perceptiveness than men. So one possible interpretation of our result is that what matters in making a group collectively intelligent is the social perceptiveness of the group members, not their gender. In other words, if you have enough people in a group who are high on social perceptiveness, that may be enough to make the group smart, regardless of whether those people are men or women. But if you’re choosing people to be in a group, and you know nothing about a person except his or her gender, you are a little more likely to find social perceptiveness in women than in men.

Interestingly, our result didn’t match up with typical assumptions about diversity. Most people would think that the most intelligent groups should be the ones that have about half men and half women. But in our data, the groups with an equal number of men and women were among the least intelligent. As the graph below shows, our data suggests that the collective intelligence of the group may continue to increase along with the percentage of women.

It’s also important to realize that, since the points on the graph don’t follow any smooth line, there is probably a fair amount of “noise” in the data (for instance, the vertical lines extending from the data points show what statisticians call the standard error of the points). We expect that future research will shed more light on the complexities of what is happening here. But at a minimum, our results already provide intriguing suggestions about the role that the proportion of men and women in a group might play in determining the group’s collective intelligence.

[Note: in the Reading the Mind in the Eyes test, above, the woman’s eyes corresponded to “desire”; the man’s eyes corresponded to “insisting.”]

Excerpted from “Superminds: The Surprising Power of People and Computers Thinking Together”. Copyright © 2018 by Thomas W. Malone. Used with permission of Little, Brown and Company, New York. All rights reserved.