Home » Fashion fears a stagnant 2024. Travel, sustainability and AI are the growth drivers

Fashion fears a stagnant 2024. Travel, sustainability and AI are the growth drivers

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Fashion fears a stagnant 2024.  Travel, sustainability and AI are the growth drivers

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38% of fashion company executives think that conditions will worsen in 2024 compared to the current year. Another 37% believe they will remain stable and 26% that, instead, they will improve. The forecasts for 2024, made by McKinsey and Business of Fashion and contained in the 2024 edition of The State of Fashion report, are divided into three blocks. The interviews for the survey were carried out in September 2023 and therefore before the start of the war between Israel and Hamas – and this could, in reality, reduce the number of optimists – but the fact is that, even net of this event, a great uncertainty hovers over 2024 in world fashion (as well as many other sectors).

Executives divided on 2024

«It is the first time that we have seen such a clear fragmentation of points of view – explains Gemma D’Auria, senior partner at McKinsey and one of the authors of the study -. The future is primarily affected by geopolitical instability (which is the main risk for 62% of executives) and not only that linked to war zones, but also, for example, to relations between the United States and China, to presidential elections in USA. Then there is the cost of living, which has increased and weighs on consumption and finally, the issue of sustainability: with the numerous rules coming soon but also the enormous economic impact of the climate crisis, companies have understood that it is an issue in which investments can no longer be postponed.” According to the report, fashion is currently responsible for a percentage of greenhouse gas emissions ranging between 3 and 8% globally and climate change could have an impact of 65% on clothing exports globally. billion euros, with an overall loss of one million jobs in key segments, again by the same date. To date, 67% of cotton exports and 52% of global clothing exports are highly impacted by environmental disasters linked to climate change.

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Growth between 2 and 4%, while luxury will reach up to +5%

Overall, the McKinsey Fashion Growth Forecast speaks of a stagnant 2024 with growth estimated between 2 and 4 percent, with “driving” luxury rising by 3-5 percent. China, like Europe and the USA, will record a marked slowdown compared to 2023, but it will be the only market in which growth will not only be higher (from +4 to +6%) but also more homogeneous: the increase estimate it is in fact the same for both the luxury and non-luxury segments. In the opinion of executives, however, the most promising markets in 2024 will be the Middle East (cited by 51% of those interviewed), with Saudi Arabia fresh from the award of Expo 2030 in Riyadh, and India (39%) and Asia Pacific ( excluding China, with 34% of the preferences).

The return of travel “saves” Europe

The real driver of fashion in 2024 will be travel: «It is the first year in which we have seen levels of travel higher than those of 2019 – confirms Gemma D’Auria -. 80% of the consumers we interviewed for the State of fashion consumer survey 2024 will shop while traveling, and of these 28% think they will spend more. Many people will not travel to the same places as before: more than half said they are looking for new destinations to have cultural experiences, including those related to food.” According to D’Auria, this imbalance towards experiences is a development opportunity for fashion and luxury brands: «It can foster an ecosystem made up of partnerships between fashion and hospitality, fashion and entertainment».

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The new drivers: outdoor and generative artificial intelligence

Among the factors that will push growth in 2024 and in the coming years, in addition to these mixes between brands, products and experiences that are relatively new (especially luxury, in fact, has various lifestyle experiences under its belt), the report The State of Fashion identifies two key strands: the outdoor world, with a renewed interest in both sports disciplines and a push for a healthier life born during the pandemic, and the use of generative artificial intelligence which for 73% of executives interviewed will be a priority in investments for 2024: «Despite the fact that people have started putting on jackets again to go back to the office – explains D’Auria – the desire for a healthier lifestyle is leading to the search for garments and accessories that combine style and functionality. We see it in the performance of sportswear and outdoor brands, which continue to be positive.” If this change of direction is already a recognizable reality in the performance of brands dictated by consumer choices, the AI ​​challenge has much more the contours of a bet for the future: «Generative artificial intelligence will have a very disruptive and companies are starting to think about how it can be used to amplify human capabilities in creative processes, as well as limit waste and be more efficient”, he concludes.

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