Textiles & Fashion: As world's fashion centres host major international events, McKinsey's State of Fashion 2024 report gives valuable insights

Fashion companies will continue to face major challenges in 2024, revealed in a recent report: The State of Fashion 2024 by management consultancy McKinsey & Company.

According to a panel of experts and authors of the report*, there are still pockets of growth due to shifting consumer priorities that will continue to offer opportunities despite the economic headwinds, technology shifts, and an evolving competitive landscape in 2024.

Première Vision Paris - SS24
Photo by Lucia Carpio

Looking back to 2023, the fashion industry faced challenges that were both persistent and deepening, says the report. On a regional basis, Europe and the United States saw slow growth throughout the year, while China’s initially strong performance faded in the second half, according to the report.  Though the luxury segment initially fared well, it too began to feel the effects of weaker demand in the latter part of the year, leading to slowing sales and uneven performance.

Looking toward 2024, the most prominent sentiment among fashion industry leaders is uncertainty, reflecting the prospect of subdued economic growth, persistent inflation, and weak consumer confidence. Against this backdrop, businesses will be challenged to identify pockets of value and unlock new drivers of performance.

According to McKinsey’s analysis of fashion forecasts, the global industry will post top-line growth of 2 to 4 percent in 2024, with regional and country-level variations. Once again, the luxury segment is expected to generate the biggest share of economic profit. However, even there, companies will be challenged by the tough economic environment. The segment is forecast to grow globally by 3 to 5 percent, compared with 5 to 7 percent in 2023, as consumers rein in spending after a postpandemic surge. European and Chinese growth is set to slow, while US growth is expected to pick up after a relatively weak 2023, reflecting the slightly more optimistic outlook there.

The Première Vision Paris international trade fair for
the fashion and textile industry.
Photo by Lucia Carpio

Beyond luxury, growth of 2 to 4 percent is predicted for the year ahead, in line with the probable outcome in 2023. 

Texworld Evolution Paris - SS24
Photo by Lucia Carpio

The European market will likely expand by just 1 to 3 percent, compared with 5 percent in the first half of 2023 and 1 to 3 percent in the second half. Slumping consumer confidence and declining household savings are expected to be the most probable causes of restrained spending. 

In the United States, nonluxury sector growth of 0 to 2 percent is forecast. 

And China is expected to be similarly challenged amid 4 to 6 percent growth, which is a slight uptick from the end of 2023 but slow when considered on a historical basis.

*The McKinsey report was a collaborative effort by Imran Amed, representing views of Business of Fashion, and Anita Balchandani, David Barrelet, Achim Berg, Gemma D’Auria, Felix Rölkens, and Ewa Starzynska, representing views from McKinsey’s Retail Practice.

Shoppers are hunting for energy-saving bargains this Christmas; Gen Z and millennials are going for "Buy Now, Pay Later"

According to new research announced this November by the research platform quantilope, more than a quarter (28%) of consumers plan to buy products to help save on their energy bills this winter, while a third (34%) are looking for basic essentials for themselves or their family.

"Sheep" and "Duck" blankets, made with a pure wool and cotton (80%/20%) blend, measuring 130 x 180 cm from J.J. Textile, an independent business based in Derbyshire, UK., known for their cosy blankets, cushion covers and throws in their original designs.

Quantilope executives said shoppers today are planning to hunt for energy-saving bargains, including blankets and small space heaters. According to new research announced today by quantilope, the research platform that automates advanced research methodologies, more than a quarter (28%) of shoppers plan to buy products to help save on their energy bills this winter, while a third (34%) will look for basic essentials for themselves or their family.

The rising cost of living is clearly having a big impact, with a quarter of those surveyed abstaining from Black Friday shopping saying that inflation has affected their discretionary spending.

The research platform that automates advanced research methodologies had recently surveyed 400 consumers in the UK (and 400 in the US) to understand more about their Black Friday shopping habits and how they plan to pay for their purchases. 

Rainbow Stripe Wool Blanket Throw
measuring 150 x 183 cm and cushion, all made
with 100% pure new wool
from Cushy Home & Style, a 
family-run business based in
Taunton, Somerset, UK.

A quarter of consumers said they were avoiding Black Friday this year, with the majority saying there is nothing they need to buy on a Black Friday deal (64%). Nearly half (46%) thought Black Friday was over-hyped and one in ten said it stressed them out. 

Alex Hall, Associate Director at quantilope, says. “(Black Friday) is a time when people usually look for deals on gifts for themselves and their families ahead of Christmas. While this still holds true this year, we’re also seeing substantial metrics for those stocking up on basic essentials, items for the household, and even energy-reducing items. This might signal the start of a changed perception about Black Friday.”

The ‘Buy Now, Pay Later’ generations

Additionally quantilope’s research revealed that younger shoppers are planning to use "Buy Now, Pay Later" (BNPL) services – perhaps so that they don’t miss out on any Black Friday bargains that could save them money in the longer term. While around a quarter of all consumers (26%) plan to use BNPL in the UK, this rises significantly among younger generations, with 40% of Gen Z (between age 12 and 25) and 36% of millennials planning to do so.

This is backed up by new research from McKinsey & Company, which indicates that BNPL services are becoming increasingly popular as the cost of living crisis worsens and people turn to shopping on credit. 

It also states that millennials and Gen Z are more likely to use BNPL in the coming months.

“This is further evidence that the current economic climate impacts what shoppers buy and how they plan to pay for it. But what’s really interesting is that as well as people planning to buy on no interest credit services like BNPL as well as credit cards, cash is also still a common form of payment. Despite the rise in contactless payments, one-in-four shoppers in the UK are planning to pay for their Black Friday purchases in cash”, adds quantilope’s Alex Hall.