The Biggest Challenges in Fashion Retail and Apparel Industry

What is the apparel industry like? Glamorous, classy, and profitable are some words that come to mind but, many times, the behind-the-scenes image isn't so pretty, and those who want to succeed in this field must arm themselves with a lot of information. The U.S. apparel market had a revenue of $341.6 billion in 2018, and it could reach $390 billion in 2025, which makes it one of the most lucrative sectors of the U.S. economy. However, managing a fashion business isn't easy because, just like the products themselves, the industry is subject to many trends. Apart from facing off against serious competitors, you have to carefully follow the consumer sentiment and adapt when a new trend emerges, without losing focus of your long-term goal. Businessman Lawrence Jemal, who has many years of experience in managing fashion businesses, explain the biggest challenges in the apparel industry and how entrepreneurs can overcome them.

Consumer shifts

The fashion industry has changed a lot in the past decades. Although some trends have returned, consumer personas have evolved, and people no longer expect the same things from fashion labels. Saying that a person chooses a certain brand purely because they want to look good would be a drastic minimization of the modern buyer's psychology. Millennials and Gen Z now have the highest buying power and influence on the market, and their preferences are significantly different from those of Gen X and Baby Boomers. According to a report from Mintel Analytics, shoppers want brands to give back to the community, prioritize people over profits, have ethical values, and be reasonably priced. At the same time, young consumers are setting the new rules of style by choosing function over looks, athleisure, and gender-neutral outfits.

Sustainability

After a few (very profitable!) years, fast fashion is suddenly coming to a halt, as retailers understand that this isn't a sustainable business model in the long run. As consumers become more aware of the massive environmental impact of fast fashion practices, brands like Zara and H&M no longer seem that appealing and are forced to adapt. A recent study showed that 52% of consumers want the fashion industry to be more sustainable, and 28% said that they would stop buying clothes from a company if they found out it has unethical practices. Granted, launching a sustainable fashion brand isn't easy because the production costs are higher, but, in the long run, this strategy can pay off.

Digitization

Digitization means so much more than having an online store. It means incorporating innovative technologies into the online shopping experience to enhance it and help shoppers make the best decisions. Big brands are already experimenting with AI and Big Data to offer personalized shopping suggestions, immersive "try-on" experiences, chatbots, and 360 product videos. In other words, the trend is for online stores to mimic real life as much as possible and offer unique features. For retail stores that don't have an online store, that can be a major challenge because they have to come up with new ways to persuade clients to visit them, so, most of the time, they need to completely rethink their strategy and establish an online presence too.