Which trends offer opportunities or pose threats in the European apparel market?
The European apparel market is affected by multiple trends. The main trend is sustainability, connected with corporate social responsibility and transparency. The second major trend is the influence of technology on production processes, sales, and the relationships between buyers, suppliers, and consumers. Although some trends pose threats, others if properly explored could generate big opportunities for developing country exporters.
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1. Sustainability is new industry standard
The fashion industry is one of the major polluting industries in the world, largely due to overproduction, the use of synthetic fibres and colours and the agricultural crop pollution. The apparel sector alone produces 10% of all CO² emissions, creates 20% of all waste water and uses 10-20% of all pesticides for the production of cotton. Because of this, sustainability is becoming very important to governments, consumers and manufacturers. In 2021, the European Commission launched a ‘Beyond your clothes’ campaign to raise awareness of the environmental impact of the fast fashion industry. In 2022, it also presented a strategy for sustainable and circular textiles. The strategy aims to place textile products on the EU market that are recyclable, last a long time, do not contain any hazardous substances and are produced in a socially and environmentally sustainable way.
Producers are approaching the issue from multiple angles including climate neutrality, use of sustainable and alternative materials, material recycling and upcycling, more sustainable production techniques, chemical management and animal friendliness. The developing country suppliers who are the fastest in adjusting their sourcing and production to these trends, will have the biggest opportunities in the European market.
The fashion industry is responsible for 10% of the carbon footprint of the world according to UNFCCC. It is set to rise by more than 60% by 2030 if the industry does not transform. Currently, fibre production, yarn preparation, dyeing and finishing account for over 50% of emissions in apparel production. Industry players (including H&M Group, Inditex, Kering, Hugo Boss, Adidas and Puma) and the United Nations Climate Change are working together on reducing greenhouse emissions and in 2018 signed the Fashion Industry Charter for Climate Action. The Charter pledges net zero emissions for the fashion industry by 2050. In 2021, the European Union agreed on a law that is closely tied to the Paris Agreement goals. The Paris Agreement aims to achieve climate neutrality by 2025 and negative emissions after 2050. The EU is also responding to the issue of ‘greenwashing’ with the ‘Initiative on Substantiating Green Claims’ that was published in March 2022. Under this initiative, companies will have to prove their ‘green’ or ‘eco-friendly’ claims with recognised third-party methodology.
In the medium term, we expect that regulations about the fashion industry’s emissions will become stricter. For suppliers, this means that they will have to work on reducing their emissions within the next 3-5 years, and that they need to develop a longer-term strategy for even more emission reductions. Strategies could include using materials with low climate impact, focusing on energy efficiency, using less water in production, using renewable energy and not using coal-fired power sources.
Vietnam’s Unisoll Vina, a subsidiary of Hansoll Textile, is one example of a company that is committed to implementing sustainable strategies. The company expects that its solar rooftop installation will save $250,000 in the coming year, based on the reduction of its standard electricity use and the opportunity to sell the power it generates back to the electrical grid. This installation will reduce the company’s emissions by 3,260 metric tonnes per year.
- Investigate ways in which you can make your company more climate neutral
- Promote your climate neutrality to potential buyers and partners
Use of more sustainable material mixes and alternative materials
Europe is currently the biggest market for sustainable material alternatives. Common fibres such as cotton, virgin polyester, virgin polyamide and cellulosic fibres have a significant negative impact on the environment, and more and more companies are deciding to use more sustainable materials. Most common sustainable materials can be divided into 4 types: (i) recycled fibres made with waste materials (e.g. recycled polyester, nylon/econyl, recycled cotton and wool), (ii) plant-based fibres with low environmental impact (e.g. organic cotton, linen, hemp, ramie and natural rubber), (iii) animal-based fibres produced in a sustainable way (e.g. peace silk, alpaca wool, sheep wool, merino wool, camel wool, responsible cashmere wool and yak wool), and (iv) semi-synthetic fibres with low environmental impact (e.g. lyocell, orange fibre, pineapple fibre, sustainable viscose and cupro fabric).
H&M aims to only use recycled or sustainably sourced materials by 2030, and the company has introduced a ‘Conscious Collection’ made of organic cotton and recycled polyester. Similar collections have been produced by C&A, Only, Zara and others. Adidas and the Bestseller Group have committed to sourcing only sustainably produced cotton and will use more and more recycled polyester in the next 3-5 years. Earth Polo, one brand of Ralph Lauren, aims to save 170 million plastic bottles from landfills by 2025. Another factor is that more companies are choosing not to use animal-based materials. For example, Asos demands that suppliers do not use animal-derived materials that are part of vulnerable, endangered, exotic, or wild-caught species. H&M and Inditex also have animal welfare policies in place. Leather alternatives are currently being produced from apples, pineapples and mushrooms.
Another emerging trend includes clothes made of carbon dioxide. In June 2022, Zara and LanzaTech Inc. released party dresses made of recycled greenhouse gases. The dresses include 20% of a polyester made with an ingredient sourced from industrial carbon emissions. Rubi laboratories is another innovator working on a carbon-negative fabric made from carbon emissions with samples released in February 2022. Materials that absorb CO2 are also being developed by brands such as H&M in cooperation with the Hong Kong Research Institute of Textiles and Apparel (HKRITA).
A production process based on innovative, sustainable and biodegradable materials creates an opportunity for developing country suppliers, especially if the fibre material can be sourced locally and if it can demonstrate much lower water and energy usage than traditional materials.
- Monitor emerging trends related to discoveries in sustainable materials by visiting event such as the Future Fabric Expo.
- Look for cheap local materials that can be handled sustainably so they can be used as alternative material for clothing. A lot of the European textile waste and second-hand clothing gets transported to developing countries, so these could be interesting apparel materials.
- Research whether you could use vegan leather in your products, and connect with retailers and manufacturers who are committed to using vegan leather in production.
More sustainable production techniques
Current production techniques, especially in the fast fashion segment have a very negative impact on the environment. For example, textile dyeing is the second largest polluter of clean water globally, after agriculture.
In Europe, the use of hazardous chemicals in clothes, textiles and footwear is regulated under the REACH Regulation. Many hazardous chemicals are banned and more strictly regulated in Europe than in the United States of America and other parts of the world. Brands are pressured through this regulation and other campaigns into removing toxic chemicals from their supply chains. Many fashion companies have joined the Zero Discharge of Hazardous Chemicals (ZDHC) Association, which aims to ban harmful substances from apparel production processes. ZDHC is working with the Sustainable Apparel Coalition, which has developed the Higg Index: a set of supply management tools that more and more suppliers request from fashion brands.
Big apparel companies are using more sustainable techniques that reduce the usage of water and energy and limit the use of harmful chemicals in the production process. Some examples include waterless dyeing technologies, like DyeCoo’s CO2-based technology, and digital and laser fabric printing that is used at Levi’s in denim finishing. Solutions like these can cut out the chemical processing, reduce the finishing time and allow for personalisation. Another good strategy is using more environmentally friendly dyes, like aniline-free dyes and technologies such as Colorifix. Some big fashion brands have also signed the New Plastics Economy Global Commitment, which aims to reduce plastic waste.
Some intermediary players, such as Lyfcycle, connect fashion brands to a network of manufacturers from Europe, Turkey and Asia. This could be a good way for small manufacturers from developing countries with sustainable production techniques to attract new brands on the European apparel market. Another relevant network, based in Portugal, is Create Fashion Brand. This network sometimes works with worldwide partners for fabrics manufacturers.
- Innovate your production processes to reduce water, energy and chemical consumption. Give up coal as an energy source and, if possible, change to renewable energy sources. Inform yourself on the new production technologies that are more environmentally friendly, innovative and sustainable. Read to this guide for information on Ethical & Sustainable Fashion Trade Shows. Invest in wastewater treatment plants that can recycle water.
- Inform yourself about trends and possibilities to reduce the use of microplastics in fashion. Read articles like CBI’s recent report on Europe’s ambition to get rid of microplastics, and stay up to date on relevant state regulations.
- Adjust your production processes to provide cleaner products by using non-toxic dyes, better dyeing techniques and improving wastewater treatment. Consider using natural dye options for your products, such as Ecofoot and SpinDye. Keep yourself informed about new textile dyeing methods and partner up with companies with sustainable technologies.
- Minimise waste and explore waste management solutions. A strong or innovative waste management performance can significantly improve your market position and competitiveness.
- If you produce eco-apparel, apply for internationally recognised certifications such as the EU Ecolabel, Nordic Swan Ecolabel, Öko-Tex, GOTS and BSCI, and clearly indicate your certifications through your labelling. For more information about labelling, refer to the CBI Buyer Requirements in Apparel.
Regenerative agriculture is a conservation and rehabilitation approach to food and farming systems. It focuses on regenerating topsoil, increasing biodiversity, improving the water cycle, enhancing ecosystem services, supporting bio sequestration, increasing resilience to climate change, and strengthening the health and vitality of farm soil. In 2021, Timberland and its parent company VF Corporation put regenerative agriculture in the spotlight by announcing the first regenerative rubber supply system in the apparel industry. Other brands, like Patagonia and North Face, are partnering directly with farmers and farmer cooperatives to help pay the cost of compliance and to promote uniform standards to support regenerative farming techniques. In 2021, the luxury goods group Kering partnered with Conservation International on a $6 million Regenerative Fund for Nature to convert 1 million hectares of livestock and crop supply land into regenerative farms. If fashion brands make claims about regenerative farming, they have to develop rigorous systems of monitoring and quality assurance far down the supply chain. To help with supply chain management, some fashion brands are forming partnerships with one another and with environmental organisations.
- Explore ways of implementing regenerative agriculture in the production of your textiles, or use textiles from suppliers who can prove that they use regenerative agriculture practices.
Companies encourage European customers to reuse packaging and offer alternatives to traditional packaging. A good example is RePack. This company provides retailers with reusable and returnable packaging. MUD Jeans and Filippa K are 2 of RePack’s customers. The packaging is reusable for up to 20 cycles and comes in 3 sizes. Other brands, such as HARA, are also shipping products in reusable bags (sustainable underwear in bamboo bags).
Figure 1: Example of sustainable packaging
Source: Photo by Ron Lach via Pexels.com
Recycling and circular business models
Growing amounts of textile waste are an unintended consequence of fast fashion since people buy more clothes more frequently and do not keep them as long as they used to. The circular model reuses materials wherever possible, to turn them into new fabrics or garments with help of new recycling technologies. In 2018, the European Parliament adopted a strategy on plastics and new legislation on waste and the circular economy to reduce the amount of landfill waste. In 2021, it agreed on the Circular Economy Action Plan which aims to be a framework for future legislation on a circular textile system and to oppose greenwashing and false environmental claims. At the same time, the European Textile Association (Euratex) announced plans to open 5 hubs in Europe that will focus on the treatment of textile waste and the coordination of upcycling processes in the region.
According to McKinsey, within this new regulatory context, companies that are ready to create new strategies will drive innovation and adoption, which could stimulate investments. There are some promising new technologies that separate the most common blend of cotton and polyester, and more and more companies are innovating in textile recycling. For example, Resyntex, Re:newcell and Evrnu Technologies produce secondary raw materials from textile waste; Infinited Fiber turns textile, cardboard and agricultural waste into new cotton; Worn Again Technologies turns polyester polymers and cellulose from cotton, non-reusable textiles and PET bottles and packaging into new textile raw materials; and the Swedish forest company Södra has announced a new recycling technology that can recycle large amounts of blended textiles at the same time.
Apparel companies like H&M and C&A offer consumers incentives to return their used clothing, and these companies are using more and more recycled materials in their collections. Adidas, Ralph Lauren and Aquafil have launched collections made of recycled plastic waste, and Diesel has teamed up with Coca-Cola to launch The (Re)Collection that is made of partially recycled materials, including plastic bottles and recycled cotton. Popular Denim brands such as Levi’s, Ariat and Pacsun are have blue jeans buyback policies, where customers can bring in an old pair of jeans and get a voucher or discount for a new pair. Madewell, a pioneer in jeans buyback, is also establishing partnerships with other companies to collect and recycle jeans, which otherwise would end up in the landfill or incinerator. Companies are also increasingly exploring circular sales models such as clothing rental, resale and upcycling. These models lengthen the product life cycle and improve sustainability. Online platforms such as eBay and apps like Vinted enable consumers to sell used clothing peer-to-peer. Clothing resale is forecast to have a tremendous growth potential. Additionally, several large retailers are starting to launch repair and customisation services across their stores.
The recycling trend creates opportunities for companies that find good ways of designing more circular fashion production and for companies that produce better-quality, longer-lasting garments. In the short term, this trend constitutes a small share of the fashion market, but we expect that it will accelerate in the next 10-15 years and will threaten fast fashion. The evolving recycling technology could result in greater nearshoring as it would make fibre material available at the production sites. Additionally, resale, refurbishment and upcycling of used apparel could result in a declining demand for new apparel in the form of the ‘ReCommerce’ trend and the consumer’s desire to ‘buy less’. This could be achieved with the distribution of second-hand products, but also with leasing schemes (for example, jeans by MUD Jeans) and apparel renting platforms. This trend towards ‘buying less’ means that developing country suppliers should think about diversifying their production between fast and slow fashion, as well as exploring upcycling and recycling strategies.
According to a McKinsey article, the circular consumer goods proportion could increase from 10% to 25% or 35% by 2030, creating an annual opportunity for companies that is worth between €400 billion and €650 billion.
- The Circular Design Software offers a platform for material suppliers, fashion brands and recyclers to create an identification scheme for reusable materials. This will simplify the use of these materials by clothing manufacturers. It is connected to sorting software, product development tools and guidelines for circular design.
- Partner with companies that work on recycling denim, or think about becoming a supplier of recycled denim.
Fast fashion awareness and the emergence of ‘Slow Fashion’
Kantar analysis showed that consumers are learning more about fast fashion and its negative impact on people and on the environment. Many consumers are starting to embrace ‘Slow Fashion’ and support fashion brands that focus on high-quality apparel made of sustainable materials. The style of this fashion is more ‘timeless’ than trendy, with no more than 3 ‘permanent collections’ hitting the market each year. The products are produced ‘on demand’ and locally to avoid waste, and they are often sold in small local stores instead of huge fashion chains.
One example of this trend is the German brand Lanius, which is a member of the Fair Wear Foundation. Lanius only offers products that are based on GOTS certified cotton, and all the company’s production facilities are licensed under the SA8000 fair fashion label. The fashion brand TwoThirds from Spain uses ‘on-demand’ production. The company collects pre-orders for one month and then produces only the number of items that have been ordered.
It is expected that going forward the environmental and sustainability practices of apparel players will become a major purchasing criterion for European consumers.
- Join platform organisations or associations that support sustainability and help apparel manufacturers with innovation. Some helpful organisations include Fashion for Good, ZDHC and Sustainable Apparel Coalition. Use assessment tools like the Higgs Index or the MADE-BY Environmental Benchmark for Fibres and Textile Exchange’s Benchmark. Participate in training courses, audits and assessments.
- For more information about sustainable apparel, see the CBI study ‘Exporting sustainable apparel to Europe’.
Social fairness is a big trend in the apparel industry and together with transparency, it is becoming a key sourcing criterion for European buyers. Surveys show that ~37.5% of consumers across Europe’s biggest apparel markets (Germany, France, Italy, Spain and the UK) state they consider environmental and social impacts when buying clothes. They want to know more about where their clothes are made and by whom. They are interested in learning what fashion companies are doing to address social and environmental issues. Companies are increasingly sourcing from contractors who can assure that manufacturing is done in proper working conditions, in safe facilities, with workers wearing protective gear and not being exposed to hazardous or life-threatening production processes that are outlawed in Europe.
The demand for transparency has caused companies to add a framework and/or a Code of Conduct to their Corporate Social Responsibility policy. This framework can be certified under the ISO26000, and companies often include it in their evaluation systems and publish a regular sustainability report to offer full transparency to all consumers and partners.
Different initiatives aim to rank apparel companies based on transparency, for example Fashion Revolution’s Fashion Transparency Index, which ranked OVS, H&M and The North Face, Timberland as the most transparent fashion brands in 2021. The social fairness and transparency trend creates opportunities for fashion producers who focus on social responsibility and whose production is organised in a way that it benefits local communities. Companies that are transparent about their practices and the practices of their partners along the supply chain will have more opportunities in the European market. On the other hand, working with suppliers who are not socially responsible and who do not respect social fairness will jeopardise your contracts with fashion brands.
- Make sure that your factories are safe to work in and that there is no preventable risk of fire. Check your electrical and structural safety. Be aware that buyers may want to inspect your factories and your suppliers’ factories.
- Stop using any dangerous and illegal production processes (for example, sandblasting and PP spraying) and replace them with alternatives (for example, there are machines for spraying).
- Create a Corporate Social Responsibility (CSR) standard and social compliance policies. Introduce proper workplace safety guidelines, and make sure everyone follows those guidelines. The European Commission website explains why you should have a CSR strategy and shares legal insights and guidelines.
- Train your employees on occupational safety and chemical management (for example, through ZDHC). Equip your employees with protective clothing, provide them with training on how to use it and explain the risks of working without it. Make one person responsible for the personal protective equipment and safety issues.
- Make sure that all the companies in your supply chain are compliant with sustainable practices and workplace safety. Prepare and publish a list of all the companies you work with in a sourcing and production cycle (sewing, washing, printing) to present to buyers. You can use the supplier list of H&M as a template.
- Pay all your employees fair living wages, and capture this in your CSR standard.
3. The apparel industry is increasingly driven by technology
Though textile production has traditionally been considered a labour-intensive industry, it is now increasingly driven and influenced by technology. Developments in digital technologies, automation, artificial intelligence, data analytics and in IT platforms, make product development, production and sales faster and more efficient. Technological innovation also changes the power dynamics between consumers, brands and retailers.
Digital transformation initiatives in textiles are becoming widespread. More and more apparel companies are using digital technologies such as 3D design, digital prototyping, digital sampling and digital showrooms in product development. These technologies help companies to shorten design times, visualise products and samples, increase the speed to market and cut costs. Hugo Boss has a fully digitised product development for parts of its brand; Nike is using digital samples; Tommy Hilfiger has introduced a digital showroom for wholesalers; and Holy Fashion Group has digitised all of its value chain.
E-Commerce and mobile commerce
Manufacturers can use online sales channels to sell their products directly to the customers, so they bypass the brand or fashion retailer. However, manufacturers often profit from the services of online wholesalers that offer them the opportunity to distribute their products worldwide. For example, the Trident Group from India partners with Amazon to sell its products to end customers in Europe and worldwide. The growing number of online shops poses an increasing threat to local stores, but it also increases the potential of companies that mainly do business online. More and more online purchases are using voice assistants or ChatBots.
The Internet of Things and smart clothing
Microchips and sensors can equip clothes with information that can be easily read and interpreted by the customers, the manufacturers, the fashion retailers and anybody who owns a connected reading device. This technology is most popular with wearables and sports clothes, which can help the customers to track their activity and health. Clothes can also be equipped with the technology to share information on materials, care instructions and location.
Macy’s has added beacons to selected clothes to provide the consumer with targeted advertisements depending on the customer’s current location. Nike has launched a shoe that sends running statistics to the Nike+ app on the owner’s Apple devices. The shirts of the brand Hexoskin carry a chip that can trace the user’s heart rate and body temperature. NADI X’s yoga pants have built-in sensors to correct the user’s posture by vibrating as they move through yoga poses.
Artificial Intelligence (AI) and data analytics
In the future, we expect that the fashion industry will be shaped by developments in AI and machine learning technology. Apparel suppliers should adopt AI technologies as soon as possible to get an advantage in the market. Industry experts expect that the fashion and retail industry will spend $7.3 million on AI technologies in 2022.
Data analytics and machine learning algorithms use historical shopping and search data to understand consumer preferences and predict consumer demand. They can also provide an automated overview of manufacturing processes and track industry news and developments (for example, using a business intelligence platform). This helps companies to be better and more accurate when it comes to inventory management. AI-powered tools can help retailers reduce forecasting errors by up to 50% while reducing inventory by 20-50%. AI technologies can also play a role in textile manufacturing.
AI vision technologies can streamline quality assurance processes, e.g., they can be used to spot defects in fabric or ensure colour match between produced textile and the original design. Machine learning technologies are also being used to make supply chains more efficient. AI is clearly useful to fashion retailers who focus on the online distribution of products. Algorithms in the web shops analyse the customers’ purchasing behaviour and help the customer to find other products. They also produce a personalised range of products which might suit the customer’s style and choice. This aims to increase the number of products in the customer’s digital cart.
Brick-and-mortar shops can also implement AI strategies. In 2018, Ali Baba launched a Fashion AI concept store, with smart garment tags, intelligent mirrors and Bluetooth chips embedded in every product. Customers can choose from a personalised range of items in the store.
Virtual and Augmented Reality (VR and AR)
Virtual and augmented reality are being used more and more for marketing. Fashion retailers use this technology to close the gap between the online and in-store customer experience. Brands work with specialist AR technology companies such as NexTech AR Solutions, which has developed ‘Try-It-On’ AR software for fashion brands. Tommy Hilfiger has created a virtual image of its pop-up retail store to attract customers from all locations to the brand’s special collection, and H&M has presented 6 AR image filters to advertise a new streetwear collection. Zara has announced that it will close 1,200 stores over 2 years and invest €2.7 billion in store-based digital tools. The Suzanne Harward bridal brand has launched the Virtual View of its apparel. The app allows customers to see the products on real-life models and to zoom in to look at the details. GAP has launched a virtual dressing room that creates a virtual avatar with the customer’s real body measurements, so that customers can try on the product virtually.
Robotics and automation
Automation and robotics make production faster, more demand-focused, cheaper and more agile. As technology improves, production can go faster and it will be possible to plan more than one season’s collection. Automation is already used extensively in the footwear industry and is now increasingly incorporated in apparel production. The key automation technologies include sewing automation, and 3D knitting and finishing technologies (such as digital and laser printing). Other areas that may benefit from automation include fabric inspection, spreading, cutting, sewing, pressing and material handling.
Sewing robots such as the ones from Softwear Automation and Sewbo reduce production time and labour costs. Automation technology can create new business models such as in-store factories or micro-factories that could further drive the trend towards apparel customisation. For example, in 2017, Adidas launched a pop-up store in Berlin. This store scanned customers and knitted a custom sweater for them within 4 hours. The company’s production facilities in Germany have already been automatized. At the same time, Adidas and a Chinese manufacturer planned to produce 800,000 items a day using sewing robots to supply the European market. Levi’s is launching a new feature on its website that will allow customers to customise their jeans using laser finishing technology.
There are many explorative studies that are discovering and developing the potential of 3D printed apparel items that are made at home. A solution like this would free fashion brands from the production process and would encourage them to focus on designing the apparel products. In 2018, Nike launched the Flyprint, its first 3D printed textile upper. The technology makes it possible to produce sneakers through solid deposit modelling, a process in which a TPU filament is unwound from a coil, melted and laid down in layers. Because of this process, Nike produces prototypes 16 times faster and the company now has an easier testing phase for new products.
Tech companies like Intel also want to commercialise 3D printing for the apparel industry. They often work with smart technologies for athletes and other people who play sports. Some designers are already creating 3D fashion: Annie Foo, Anouk Wipprecht, Ganit Goldstein, Iris van Herpen, Julia Körner, and many more. Manufacturers like Shima Seiki can turn cones of yarn into a complete, seamless garment in less than an hour.
Another connected technology is 3D knitting, which automates the whole apparel knitting process. Many companies already use this technology in their factories to speed up production and reduce waste, and innovative companies like Kniterate aim to bring these machines to private houses.
Figure 2: Examples of 3D printing
There has been increasing investment in management platforms and data monitoring tools in the apparel industry. It is expected that in the future, apparel companies and their suppliers will increasingly get networked over integrated IT platforms. These platforms will be able to provide automatic information on free production capacity or possible efficiency improvement potential and will allow the buyers and suppliers to react faster to changes in demand.
In 2004, Euratex created the European Technology Platform for the Future of Textiles and Clothing, which connects more than 200 member organisations and more than 500 registered individual experts. It is the biggest European network for textile research and innovation expertise. The platform will bring together industry players and industry experts, share information about industry developments and changes, and improve industry education.
The smartphone application ‘DE-Brands’ is the first app to manage denim and sportswear sourcing procedures. It brings together buyers and suppliers by working as a platform, and it offers interaction tools and opportunities for suppliers to showcase their products. Buyers can search products worldwide, select different categories and connect with suppliers and mills. In the future, we expect that there will be more solutions like this and more app participants.
Because of the need for innovation and change, several apparel hubs and incubators have opened in Europe to develop new, sustainable solutions in which technology is important. Many ideas are currently entering the market, and they will probably enter the industry soon.
Personalisation and Hyper-personalisation
71% of consumers expect personalized interactions with companies. More and more customers also expect that designs will be adapted to them and their measurements. Haute couture already does this, but it has not yet been scaled up. 3D printing will help develop this trend. One example is the fashion brand Thread. When customers visit the website, they can enter their gender, preferred looks and brands, and date of birth. Asos now lets customers enter their measurements and the brands of their choice when they select products. ‘Micro brands’ are small brands that focus on a specific market or geographic area, and they use a lot of personalisation because they target niche markets.
McKinsey predicts 3 major shifts in personalization in the next few years. First, digital changing rooms will replace physical ones, for example with the virtual ‘try-on’ where customers can try personalised recommendations. Second, there will be more empathy and customers will expect that brands will reduce waste. More precise predictions of inventories that use machine learning methods can make this possible. Third, the use of AI means that brands and retailers will be able to better predict customer needs and preferences.
For more information on data analytics, AI and other technologies affecting the apparel industry, see the CBI study on Technology trends in the apparel industry and the most recent McKinsey “State of Fashion” study.
- Have a digital transformation strategy in place, with a clear mission with specific objectives that outline your expectations and lay out a scope and volume of your digital transition, including changes to the design process, legacy system updates, cost/benefit analyses, supply chain partnerships. Learn from peers who successfully underwent such transformation, some examples include Pacific Textiles and Getzner Textiles.
Update your IT to accelerate your communication with buyers and to streamline the ordering process. Investigate the different IT management platforms and systems and find out which platforms your clients work with and would allow for best integration. Read this blog on Sharecloth for an overview of IT management software for apparel industry.
- Start systematically collecting and analysing data with a focus on market and internal company data (for example, fabric data, production times, pricing, lead times, shipping, ecological footprint or sales) to help diversify your product range to include items that are more difficult to nearshore, such as labour-intensive, complex products that cannot be made by robots.
- Provide digital data for your products including photos and videos, find out whether your buyer needs different kinds of packaging and logistics solutions for e-commerce.
- Adapt your business to the growing trend of personalisation and hyper-personalisation.
- Read CBI’s article on the 8 tips to go digital in the apparel sector.
4. The potential of senior customers is recognised
Senior customers have often been overlooked. However, this segment in Europe is growing in size and in purchase interest. The total population of the EU-27 is expected to increase slightly from 447 million at the start of 2019 to 449 million during the period 2026-2029. It is then expected to fall slowly back to 442 million by 2050. The population of older people (defined here as those aged 65 years or more) in the EU-27 will increase strongly, from 90.5 million at the start of 2019 to 130 million by 2050 (30% of the population). During this period, the number of people in the EU-27 who are aged between 75 and 84 is expected to increase by 56%. Although Europeans are getting older, the boundaries of old age are shifting. More and more older Europeans still work, travel and use the internet, and they do not want people to think about them as ‘old’.
The ageing of the society creates opportunities in apparel targeting older and elderly consumers, including adaptive clothing (clothing designed for people with disabilities and the elderly who may experience difficulty dressing themselves due to inability to manipulate closures, or due to a lack of full range of motion). The high-activity level of the ageing populations creates opportunities for creating activewear styles for mature buyers. Currently the senior buyers are underserved, while most companies focus on targeting the younger consumers. Some brands which successfully target seniors include Ulla Popken, Gerry Weber, Taifun. Ageing influencers like Baddie Winkle and Iris Apfel show how social media can also inspire senior citizens.
- Recognise the importance of senior customers, calculate their potential and offer this group appropriate products such as activewear styles and related fabrics.
- Inform yourself about the demographics when deciding on the clothing segments that you want to enter. Research and understand the forecasted size for each segment, growth, demand, fashion taste and buying habits.
- Consider and research different clothing niches for seniors such as activewear, workwear, leisure wear and adaptive apparel. Research senior styles popular in Europe by checking the offering of the main market players.
- Focus your exports on Germany, France, the United Kingdom and Italy, 4 of the biggest European markets. Research opportunities for subcontracting for big brands or retailers who are successful in one or more of these countries, such as H&M, ASOS, the Bestseller brands and Inditex.
- Connect with senior customers by using authentic content, and get the support of relevant influencers.
Figure 3: An influencer takes a selfie to post it on social media
Apparel companies need to gain more insight into consumers and their buying behaviour to provide them with a more personalised and predictive shopping experience. The role of the consumer is shifting from being a passive purchaser to be more of an influencer, cocreating and interacting with the brands. Apparel companies have lost much of their power in trendsetting.
Today’s hottest trends in mass fashion are often made by individual influencers and consumers. Social media is becoming increasingly more important with Instagram and Facebook becoming some of the leading channels for consumers to discover new styles. A vast majority of consumers use digital channels all throughout the purchase process. This means that most brands must become digitally savvy to successfully compete in the market. Social media marketing creates an opportunity for companies to strengthen their brands, drive traffic to their websites, gain marketplace insights and even sell.
Instagram has become a new sales channel and now enables users to shop directly in its app through its Checkout tool (launched in cooperation with 20 apparel brands. Adidas, H&M and Zara participated in the launch of Instagram’s new feature, which includes a ‘shop now’ button to help e-commerce. Other social media channels like TikTok and Twitch have increased their influence on younger people in particular. TikTok users like Wisdom Kaye and Charli d’Amalio now have millions of followers, and model agencies hired them because they were very successful in representing fashion on TikTok.
Companies with successful social media strategies and presence include Missguided, Nike, Reebok, Everlane and Zara. Some strategies for creating successful social media presence and customer involvement include using stories and emotion, using beautiful and stylised imagery, creating user-friendly ways of referrals, creating surprising and viral content, and promoting sustainability and social responsibility. Monki, one of the H&M brands, co-creates their community and increases livestream shopping, using technology made by Bambuser, a Swedish start-up.
Influencers are now building their digital avatars. Forever21 and Tommy Hilfiger are successful in online influencing. For example, online influencers create and manage their own stores in Forever21’s ‘Shop City’.
Some apparel manufacturers are already on social media. For example, Esquel’s website has links to a Facebook page and a YouTube channel. However, most manufacturers seem to prioritise other things, such as productivity and cash flow. They do not realise social media helps them to stand out from the crowd, share expertise, build a collaborative culture and eventually become an influencer.
- Familiarise yourself with the latest fashion trends on social media by following the fashion influencers and/or leading European apparel players in your product segment. Check Harper’s Bazaar recommendations of best fashion Instagrammers.
- Develop strong design and production competencies in your selected fashion segments. Follow online trends and developments to stay ahead of what is fashionable in Europe and what the next big thing might be. Master the look and feel of the European market.
- Design a social media strategy: identify two channels that focus on the demographic you want to reach, and see if you can imitate brands that have a lot of followers. Cupshe’s Instagram account is an example of a company that is successful in marketing its brand on social media.
- Update your social media channels regularly and interact with your consumers. Have a dedicated person for answering questions and comment. Create a positive exchange to create trust and brand following.
- Familiarise yourself with the latest fashion trends on social media: follow relevant fashion influencers and big European apparel players. Check Harper’s Bazaar selection, for example, for top fashion influencers on Instagram.
Activewear outfits are becoming the new norm
As the SARS Covid-19 pandemic hit Europe and workers were sent to home office, they got used to wearing more comfortable clothing during their working hours. Industry experts expect this trend to continue to influence the workwear segment in the future. Many retailers have launched more comfortable workwear collections. For example, consumers now want simple, minimalist clothes and stretchy workwear that they can wear all day.
Brands are also expanding their ‘athleisure’ range. These clothes combine exercise apparel with comfortable, everyday clothing. We expect athleisure wear to increase by 7% on average per year until 2026. The global athleisure market will grow, to almost €480 billion in 2023 from less than €350 billion in 2019. Europe is one of the biggest importers of sportswear in the world. Most fashion brands and sportswear brands have launched new athleisure collections: Nike, H&M, Adidas, Zara and many more brands. Many of these brands have new products that include cooling, comforting and skin-sensitive technologies. Because consumers are now much more aware of their health and well-being, athleisure and active sportswear are unlikely to be a short-term trend.
Another fast-growing category that is practical and easy to wear around the house is ‘streetwear’ or ‘streetstyle’. Brandwatch’s industry trends for 2021 showed that luxury retailers now also offer streetwear. Brandwatch reported a 124% increase in mentions on social media in 2020 for sportswear, and a 309% increase in mentions for streetwear. This category continues to disrupt the market.
Sustainability in the fashion sportswear segment
Most brands have a sustainable range, but there are also brands that put sustainability at the centre of their brand and their product. More and more companies use recycled plastic, regenerated nylon, organic cotton or recycled polyester, and consumers actively search for brands that use materials like Econyl, Repreve, Tencel or organic cotton (we see this in collections from Girlfriend Collective, Adidas x Parley and Vyayama). Other sustainability efforts include printing with eco-prints and trying to keep the supply chains short and transparent to reduce carbon emissions.
The circular economy is about separating garments into their constituent elements and recycling them. It removes the need for new material, and in 2020 its influence increased in the sportswear category. In September 2020, Sustainable fashion brand Presca announced their collaboration with Poseidon Plastics and Teeside University to produce a range of ‘fully circular’ sportswear. At the same time, Swiss-based high-performance running brand ‘On’ announced the launch of the world’s first subscription-based service to bring fully recyclable sportswear to On customers worldwide. The subscription service, named ‘Cyclon’, will allow subscribers to receive and wear the newest running apparel and then return products to On at the end of their usable life, in exchange for the latest version.
We expect increasing digitisation to change the sourcing of fabric (for example, B2B platforms like Texdome connect brands and manufacturers in a digital way).
- Customers like athleisure apparel that satisfies their health and wellness needs.
- Find out about segment-specific apparel trends by reading CBI’s market entry study on (fashion) sportswear and market potential analysis on workwear.
- Use high-performance fabric to produce functional and technical athletic clothes. For example, North Face used nanospinning technology to introduce very thin polyurethane fibres, which protect users from harsh weather.
- Work with influencers. They can help you to build a brand profile as a cool sports or athleisure brand. Produce a marketing campaign or a collection together with celebrities like Daniel Fuchs, one of the most popular male influencers in Germany.
- Search the internet for trends that are doing well, such as streetwear trends for 2021. Do not be afraid to innovate and be different.
- Consider entering the sustainable sportswear market, because it is the future of European imports. Understand your buyers’ sustainability requirements, and find out where and how you can satisfy those requirements. For example, you could use sustainable materials, more eco-friendly production processes or recycling. Understand where your fabric comes from, and consider using platforms such as Texdome.
Inclusivity drives new trends
Gender inclusivity drives unisex clothing
Self-perception and awareness have been part of Europe’s fashion market for a long time. There is a social discussion of gender and body positivity, and people are interested in how fashion and the industry influence the social perception of identity.
Most fashion collections are clearly divided into women’s and men’s fashion categories, but these divides are starting to fade. Female clothing is now often available in larger sizes. This includes obese women, but also anybody who does not fit into the shapes that have been seen as ‘feminine’.
Some fashion brands now also offer unisex collections. Nicopanda, Gypsy Sport and Charles Jeffrey Loverboy describe themselves as explicitly ‘genderless’, and they actively promote the message of inclusivity. H&M and Zara have also taken their first steps in unisex fashion with the launch of the Denim United line and the Ungendered collection.
More collections and stores like these have appeared in France, Spain and Germany. However, this is not yet an established trend and the existing companies are pioneers as in the segment at the moment. For now, it is not clear how much they will define the market of the future.
When we look at dresses and skirts, the interest in gender lines is also growing: ‘men’s skirt’ was one of the most-searched fashion items of 2021.
Influencers make brands accept plus-size consumers more
The ‘body positivity’ movement has a big influence on fashion customers. Searches related to plus-size and fast fashion (for example, ‘shein plus size’) have increased strongly. Plus-size consumers often do not have much choice, because most mainstream brands do not offer their sizes. Influencers encourage brands to be more inclusive. TikTok influencer Remi Bader worked with Resolve and Victoria’s Secret to create plus-size lines.
- Because unisex clothing serves both the female and male fashion markets, this subsegment of the fashion industry could be an interesting place to start doing business with European companies.
- Find out about the ideology behind gender inclusivity and the current fashion pioneers in the market. Because the market is quite new, you can be a pioneer and offer suppliers and retailers interesting choices.
- If you want to do business in the female apparel segment, be ready to produce larger sizes and very simple designs for the consumers in Europe.
The COVID-19 pandemic dominates apparel trade flows
The COVID-19 pandemic strongly influenced the sales and processes in all segments of the fashion industry in 2020. In most European countries, many local shops had to close during lockdowns. Some survived thanks to support from their governments, big discounts and a shift to online sales. Overall, apparel sales decreased in 2020.
Industry experts think that the pandemic may change all market dynamics in the long term. They expect Asian countries to lose stakes because of local lockdowns and delivery problems, while companies in Africa and other regions could increase their market share by being a reliable and present partner. The pandemic also created new trends and demands among consumers. For example, some Chinese manufacturers have provided antibacterial and antiviral fabrics.
For more information about the impact of the coronavirus and how to respond, read the CBI’s market information about the impact of the Coronavirus.
The Conflict in Ukraine pushes companies to review pricing and production strategies
After the start of the crisis in Ukraine, inflation rates and the costs of shipping and raw materials increased. There is not enough warehousing, which has also increased costs. Some companies are using different strategies, such as micro-manufacturing or on-demand production, although these strategies are not yet widespread.
Micro-manufacturing is well adapted to the clothing sector. The concept is based on micro-factories that use automation instead of human workers, and it is mainly developing in developed countries and in regions that are close to customers. It helps companies to be more agile and to produce on demand. There are many examples, such as Fast Retailing, the parent company of Uniqlo, which offers an on-demand knitwear service in partnership with the 3D knitting company Shima Seiki. The German company Lesara produces 90% of its apparel itself, and the company only needs 10 days between the identification of a trend and its placement on the market. Adidas is also moving towards this new way of producing, by operating ‘speed factories’ in the US and Germany. These factories produced 1 million pairs of running shoes in 2020.
Amazon started testing an on-demand service called ‘made for you’ in 2020. This is a custom clothing service that allows customers to create clothes with their exact body measurements and fabric choices. In 2022, the service was expanded from casual tees to athletic shirts.
For these trends to keep developing, the regulation context needs to encourage these strategies. New carbon taxes and waste regulations, such as the one planned by the EU Strategy for Sustainable Textiles, would make it cheaper for companies to produce locally.
- Communicate with employees frequently and clearly. Offer them help, time off and solutions for them to work from home.
- Protect customers by introducing new processes and policies, such as safety procedures for handling and delivering online orders.
- Support long-term partners by clearly reviewing inventory positions, and consider trying joint planning.
- Improve your online presence, through your own efforts or through partnerships.
- Do not only focus on the things you have to do now. Plan medium-term and long-term actions to overcome any setbacks and be ready for new opportunities.
- Monitor the effect of the Ukraine conflict, such as micro-manufacturing and on-demand services, so that you are prepared for the impact on your business.
M-Brain GmbH conducted this study for CBI.
Please review our market information disclaimer.