The New Year begins with expert insights and predictions across many industry sectors, with marketers forecasting what will stay and what will go in the coming months. According to McKinsey’s State of Fashion Report, retail trends that emerged in the past 18 months will continue to escalate, bringing the industry into a seamlessly digitized and more sustainable future.
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Here are three trends expected to accelerate in the coming year that retail marketers should consider:
Anticipate Supply Chain Pressures
Supply chain is top-of-mind for every business executive today. As we know all too well, supply chain blockages in recent months have been a menace to businesses globally, and few industries have been hit as hard as retail and other low-margin sectors.
Retailers have taken measures to combat pressures with some effectiveness, proactively managing assortments and striking the balance between having core products in stock, which are high replenishment and on demand, and seasonal products, which take longer because they are cut-to-sew. Even once the supply chain has returned to normal, attention to this distinction is expected to remain, producing less waste by tackling production holistically, “rather than pegging their profitability to one selling season.”
For those wondering when these troubles will resolve, there is good news and bad news. The bad news: systems will remain backed up for the next couple of months, and marketing teams will continue to exist in reaction mode into 2022. The good news: the economy is nothing if not adaptive, and markets are expected to reconfigure to adjust to labor shortages caused by COVID by the second half of the year.
In the meantime, marketers can lean into the adoption of technology. Retailers are growing increasingly savvy with AR and VR technologies which allow for a significant decrease in sample production, alleviating some of the pressure. In turn, adoption of AR tech could lead to a more sustainable means of production across retail industries.
To effectively support wholesale merchandising and sales in today’s complex global environment, the leveraging of digital technology is critical. As the technology becomes more accessible and readily available, integrating it into your wholesale business model significantly diminishes current roadblocks and generates efficiencies that help to mitigate supply chain challenges.
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Take The Hybrid Approach
Another major trend we expect to continue is a hybrid model for retail trade shows and events. For some, the digitization of events was viewed as a stopgap solution until COVID subsided and the world could return to in-person meetings. However, as small businesses and designers with limited resources have observed, there are positive impacts of a retail environment with less overhead and travel. While the retail industry pushed forward out of necessity, it has now realized the benefits and adopted hybrid models for the long term.
Rather than differentiating between the pre-pandemic world of physical gatherings and the new one of digital, the two will complement each other in this new economy. Digital events serve as extensions of physical events, offering wider, often global, access not previously available to all.
While it is unfortunate that the return to in-person events continues to be impacted, the hybrid model actually enhances the buying/selling experience and enables brands to extend their market season over multiple weeks and achieve a larger global reach, among other benefits.
Those benefits include a significant reduction in carbon footprint, brought about by the decrease in travel for events, trade shows and product sourcing. Low carbon production and sustainable practices have become greater priorities for consumers in recent years, and a decreased footprint offers a significant marketing advantage for businesses.
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Continue a Holistic Pursuit of Sustainability
Last, and certainly not least for the coming year, is the rapid move toward sustainable business models. While sustainability is a buzzword that has hovered around the retail space for years, the last 18 months have seen a massive increase in actionable commitments by companies that have learned talk alone is no longer sufficient.
Today, and going forward, it’s simply not enough for a retailer to make independant commitments. Rather, everyone contributing to the retail ecosystem must focus their efforts on making the entire process more sustainable. Brands are applying sustainable standards to every step of the process, such as sourcing smart materials, selecting eco-friendly packaging and optimizing delivery methods. These positive steps forward are great for marketing executives (in all industries), as it allows them to join a global conversation around environmental impact and showcase their brand’s position and dedication to change.
Luckily, companies are offering and adopting technology that provides transparency into how brands or retailers are rising to environmental standards. We can expect these types of innovative technology solutions to gain value as the industry leans into environmental consciousness.
While 2022 may have surprises in store, we have the opportunity to ready our businesses for the year ahead, not to react to the changing times, but to adapt and innovate.