The global pandemic and the war in Ukraine have placed intense stress on global supply chains. Purely cost-based models have shown their limits, and fashion companies are now trying to pivot, as uncertainty is the “new normal”. They also need to anticipate regulatory shifts in terms of sustainability to plan for the future. From using AI to investing in bioengineered fibres or nearshoring some operations, this briefing looks at the steps companies can take today to build their future resilience.
This report comes in PPT.
While global sales of apparel and footwear bounced back more quickly than previously expected, the war in Ukraine, all time high inflation and China’s strict COVID-19 policies have further disrupted the global economy, forcing market players to reassess their supply chain architecture.
Geopolitical considerations have led fashion players to reassess their supply chain locations, moving away solely from cost considerations to take into account the need to secure timely deliveries; however, for nearshoring or reshoring to scale up, legislation and public investment will be essential to create production clusters.
The pandemic highlighted the need for better collaboration with supply chain partners, while some market players have sought vertical integration, to help cut costs and secure their access to craftmanship and materials, or reduce reliance on wholesale in order to control their image and prices.
Automation and smart technologies can help reduce inefficiencies within supply chains, for example by working around the clock and ensuring resilience in the event of another major health crisis. Technology, especially AI, could also empower brands to better manage inventory and forecast demand.
Innovation in materials is being pursued in anticipation of new environmental regulations in fashion, and because conventional commodities are seeing their prices soar. In the future, these new materials could facilitate nearshoring, which remains difficult at present owing to the challenges of sourcing raw materials.
Traceability is becoming critical to identify risks, in terms of sourcing as well as green claims or forced labour, and to help prove compliance with relevant laws, in due time. Consumers increasingly demand that companies are more purpose-driven, and regulation in that regard is toughening.
Apparel is the aggregation of clothing and footwear. This dataset covers retail sales of apparel through both store-based retailers and non-store retailers. Excludes black market sales (i.e. untaxed, generated within informal retailing)and duty free sales (travel retail). Items must be new when sold to the consumer; second-hand/used items are excluded. Antique and/or vintage clothing and footwear is also excluded.
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