Fashion Industry In 2023: Sustainability Surges, Tech Soars, Challenges Persist
In 2023, the fashion industry witnessed a transformative shift towards sustainable practices, reflecting a changing consumer ethos. The demand for eco-friendly clothing saw a remarkable 25 per cent increase, indicating a growing consciousness among consumers. Sustainable fashion became more than a trend; it became a cornerstone of consumer preferences.
Another significant trend in 2023 was the adoption of smart textile-based wearable devices, with a notable 15 per cent uptick. Consumers sought not only sustainability but also convenience, comfort, and customisation in their fashion choices.
Despite these positive trends, challenges such as inflation continued to pose difficulties for the industry. The BoF-McKinsey State of Fashion 2023 Survey highlighted that 85 per cent of fashion executives anticipate inflation to be a continued challenge in the coming year.
Here is a look at what the industry players say and their outlook for 2024.
Global Fashion Tech Market
One of the notable aspects shaping the future of the fashion industry is the exponential growth expected in the Global Fashion Tech Market between 2023 and 2030. Key players are increasingly adopting innovative strategies, contributing to the market's projected reach of USD million by 2028, with a Compound Annual Growth Rate (CAGR) of 5 per cent. This growth underscores the industry's commitment to integrating technology and innovation.
Increasing Penetration Of Brands In Tier II and Tier III Markets
Manish Kapoor, MD & CEO, Pepe Jeans India said that the retail fashion industry saw substantial growth in 2023. Pepe Jeans India reported a substantial consumer sales revenue of nearly Rs 1,200 crore and a book revenue of Rs 562 crore, achieving an impressive 55 per cent growth compared to the previous year. Pepe Jeans, specifically, experienced a surge of 42 per cent, surpassing pre-COVID numbers.
Kapoor remarked that the strategic shift towards becoming a consumer-centric company and a keen focus on digital aspects and trends proved to be the driving force behind Pepe Jeans' success. Notably, Pepe Jeans London, a prominent player in the premium denim space, reported a significant proportion of its growth coming from smaller tier II and III markets. This success can be attributed to factors such as rising disposable incomes, increased exposure to fashion trends facilitated by growing internet penetration, and a consumer base with aspirations comparable to those in metro cities.
Focus On Sustainability And Eco Friendly Material
In 2023, the retail fashion industry witnessed several transformative trends, as highlighted by Roshan S Bisht, Promoter - Cape and Cloth & Co-Founder, Asort. Sustainability emerged as a critical factor, with a focus on eco-friendly materials and transparent supply chains. Gender-neutral fashion gained momentum, fostering inclusivity. Virtual fashion experiences, powered by augmented reality and virtual try-on technologies, enhanced the online shopping journey. Personalization, driven by AI, reached new heights, offering custom-fit clothing options. Upcycling and vintage fashion gained popularity, reflecting a growing desire for unique, timeless pieces. Functional fashion designed for comfort and utility also gained prominence, marking 2023 as a transformative year for retail fashion.
Expansion Of Virtual Fashion Experiences To Enhance Sales
Rashmi Chopra, Founder & Managing Director, Ecloset said that sustainability remained a paramount focus in 2023, with brands emphasising eco-friendly materials, ethical manufacturing, and transparent supply chains. Gender-fluid fashion gained significant traction, offering more inclusive clothing options. Virtual fashion experiences expanded, enhancing the online shopping journey through augmented reality and virtual fitting rooms. Personalization, driven by data, continued to be a key trend. The industry saw a surge in demand for versatile and multifunctional clothing, reflecting consumers' desire for practicality and value. These trends underscored a shift towards conscious consumerism, innovation, and adaptability.
Role Of Digital Retail And Ecommerce
Ravi Gupta, Creative Director of Gargee Designer's said that digital retail took centre stage in 2023, with e-commerce surging in popularity due to its convenience and improved internet accessibility. Vibrant shades like electric blue, fiery red, and sunny yellow became staple choices. The introduction of digital displays, interactive kiosks, and apps curated for in-store use enhanced the overall in-store experience. The adoption of new payment modes like mobile wallets and cryptocurrencies provided customers with seamless and diverse payment options.
Integration of AI In Shopping Apps
Talking about use of tech to enhance shopping in 2023, Kapil bhatia, CEO & Founder, Unirec said that the retail industry experienced significant growth, marked by several milestones. E-commerce continued its upward trajectory, witnessing a 20 per cent YoY increase in online sales.
Brick-and-mortar stores embraced innovative technologies, contributing to a 15 per cent boost in in-store revenue through enhanced customer experiences. The adoption of sustainable practices and a focus on eco-friendly products led to a 25 per cent rise in sales for environmentally conscious brands.
Additionally, the integration of augmented reality in shopping apps resulted in a 30 per cent surge in consumer engagement. Overall, 2023 showcased the industry's resilience and adaptability, with a collective growth rate of 18 per cent.
Industry Outlook For 2024
The fashion industry, a dynamic and ever-evolving landscape, is poised to experience moderate growth in retail sales in 2024, with estimates ranging from 2 per cent to 4 per cent.
This comes on the heels of significant economic profit levels achieved in 2022. However, the industry faced persistent challenges in 2023, marked by slow growth in key regions such as Europe and the US. China, a powerhouse in the fashion market, experienced a deceleration in performance during the second half of the year.
The luxury markets, while positive in the first half, encountered a decline in consumers' appetite for fashion, leading to slow sales and an uneven performance in the latter part of 2023.
As the industry steps into 2024, fashion leaders are anticipating further headwinds and uncertainty, emphasising the need for adaptability and strategic planning.
