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Gen Z, the generation born between the mid-1990s and early 2010s, is rapidly emerging as a key driver of the fashion industry. Their spending patterns, shaped by digital fluency, social consciousness, and an evolving sense of identity, are influencing fashion brands across the globe. These digital natives preferences driven by factors such as sustainability, social consciousness, and instant gratification, are forcing brands to rethink their strategies. And understanding these patterns, and their nuances across different fashion segments and regions, is crucial for brands aiming to thrive in this new era.
Digital natives spending patterns
One major trait among Gen Z consumers is they are mindful of their spending and seeks value beyond price tags. They are drawn to brands that align with their values, whether it's sustainability, ethical practices, or social responsibility. Social media and e-commerce play a significant role in their shopping journeys. Gen Z relies heavily on online reviews, influencer recommendations, and seamless digital experiences. They value authenticity, sustainability, and inclusivity, often prioritizing these factors over traditional brand loyalty. Gen Z values individuality and self-expression through their fashion choices. They gravitate towards brands that offer customization and unique designs.
At the same time they are also impulsive spenders who look for experiential consumption. A recent survey by Zhaopin, an online recruitment platform, in China revealed that nearly half 49.1 per cent of Gen Z consumers have increased their spending to "live in the moment." This trend towards experiential consumption is further evidenced by the fact that 39.7 per cent spend to relieve stress and 31.9 per cent increase spending as their income rises. However, the same survey also unveiled a contrasting trend. Almost three-quarters (74.2 per cent) of respondents who reduced their spending cited prioritizing value for money as the primary reason. This suggests a cautious and considered approach to consumption among a significant portion of Gen Z.
While fast fashion remains popular due to its affordability and trendiness, Gen Z is also embracing premium and luxury brands, often for special occasions or investment pieces. This reflects a desire for quality, longevity, and self-expression. Their spending patterns exhibit regional variations. While American Gen Zers tend to prioritize comfort and individuality, European counterparts are more inclined toward classic styles and sustainability. In Asia, particularly in emerging markets, Gen Z is driving a boom in luxury consumption.
In fact, the rise of athleisure, driven by a focus on health and wellness, is a prominent trend across all regions. Denim remains a staple, but Gen Z is seeking more sustainable and innovative options. Casual wear, reflecting Gen Z's laid-back lifestyle, is also gaining traction.
Table: Gen Z fashion spending patterns
|
Factor |
Impact |
|
Market segment |
|
|
Luxury |
Increased interest, particularly for investment pieces and special occasions |
|
Premium |
Growing demand for quality and unique styles |
|
Fast Fashion |
Remains popular due to affordability and trendiness |
|
Region |
|
|
USA |
Focus on comfort, individuality, and athleisure |
|
Europe |
Preference for classic styles, sustainability, and premium brands |
|
Asia |
Rising luxury consumption, particularly in emerging markets |
|
Fashion Sector |
|
|
Menswear |
Growing interest in streetwear, athleisure, and self-expression |
|
Womenswear |
Diverse trends, including athleisure, vintage, and sustainable fashion |
|
Kidswear |
Increased demand for comfortable, stylish, and sustainable options |
|
Product Sector |
|
|
Athleisure |
Significant growth driven by health and wellness trends |
|
Denim |
Continues to be popular, with a focus on sustainability and innovation |
|
Casualwear |
Increasing demand, reflecting Gen Z's laid-back lifestyle |
|
Classicwear |
Steady interest, often for special occasions or investment pieces |
Understanding a complex cohort
The conflicting consumption patterns present a complex challenge for luxury brands. While they can capitalize on Gen Z's desire for instant gratification and status symbols, they must also demonstrate value and sustainability to appeal to the more rational segment. A study by McKinsey survey supports this duality, highlighting Gen Z's focus on health-conscious lifestyles and social interaction. This suggests that luxury brands should not only offer products that provide immediate pleasure but also align with consumers' long-term aspirations for well-being and personal growth. Trade analysts point out, Gen Z is the most diverse and socially conscious generation yet. They expect brands to reflect their values and contribute to a better world.
And to pander to their demands brands have reworked their strategies. Nike for example, successfully caters to Gen Z's desire for athleisure and personalization through its customizable sneakers and focus on sustainability. Similarly Everlane appeals to Gen Z's value-driven consumption with its transparent pricing and focus on ethical practices. And Gucci engages Gen Z through its playful and irreverent marketing campaigns and collaborations with influencers.
Gen Z's spending patterns are transforming the fashion industry, forcing brands to adapt and evolve. By understanding their values, preferences, and digital habits, brands can create meaningful connections and build lasting relationships with this influential generation.
The once-booming fashion and apparel sector is experiencing a noticeable slowdown, with growth figures slipping and consumption patterns changing dramatically. While the industry seemed impervious to economic fluctuations, recent statistics highlight a sector grappling with a new reality.
Numbers speak volumes
The data reveals a some hard ground realities:
• Global fashion industry growth: The global fashion market was valued at $1.5 trillion in 2022 and expected to grow at a CAGR of 4.75 per cent from 2023 to 2028. However, recent reports suggest that growth is likely to fall below this projection.
• Slowing sales: Major fashion retailers especially fast fashion brands have reported declining or stagnant sales in recent quarters. For instance, H&M, a leading fast-fashion giant, saw its net sales decrease by 6 per cent in the second quarter of 2023. As a stakeholder points out they are seeing a distinct change in how people shop. It's no longer about quantity; it's about quality and conscious choices.
• Waning consumer confidence: Consumer confidence has dipped in several key markets. Concerns about inflation and economic uncertainty have prompted many shoppers to tighten their belts and prioritize essential purchases. In fact, various surveys suggest an increasing inclination towards mindful consumption. A significant portion of consumers express a desire to purchase fewer, but higher quality items, suggesting a shift in values.
Segments facing maximum impact
While the slowdown is affecting the entire fashion industry, certain segments are facing the maximum impact:
• Value segment: The value segment, which caters to price-conscious consumers, is experiencing significant decline. As shoppers cut back on discretionary spending, they are less likely to indulge in impulse purchases of low-cost fashion items. The focus is shifting towards value brands that offer quality and sustainability.
• Fast-Fashion: Fast-fashion retailers are also struggling as consumers become increasingly aware of the environmental and social costs associated with this business model.
• Premium: This segment, positioned between luxury and value, is feeling the pinch most acutely. With consumers becoming more discerning and price-sensitive, the appeal of premium brands is waning.
• Luxury: While traditionally resilient, the luxury segment is not immune to change. Though still experiencing growth, it's at a more moderate pace than before. This can be attributed to factors such as economic uncertainty and a growing awareness of sustainability concerns.
The slowdown in the fashion and apparel sector has no easy solutions. However, brands that can adapt to the changing consumer landscape are likely to be the ones that thrive in the long run. Moving ahead there will be more focus on value and sustainability as consumers are increasingly looking for brands that offer a good balance of price and quality. Additionally, sustainability is becoming a key consideration for many shoppers. Moreover, the pandemic has accelerated the shift to online shopping. Brands need to have a strong digital presence to reach consumers where they are. And since consumers are looking for personalized experiences, brands that can offer tailored recommendations and services are likely to stand out from competition.
Exports of polyester products increased by 197,000 tons Y-o-Y to 1.047 million tons in July’24. However, these declined by 67,000 tons on a M-o-M basis. As per the latest customs data by the CCF Group, from Jan-July’24, total exports of polyester products increased by 802,000 tons Y-o-Y to 7.185 million tons. This reflects a relatively strong performance in polyester exports for the year, although some disparities are evident.
Analysing the data in more detail, exports of all polyester products except filament yarn exhibited year-on-year growth in July, continuing the trend seen in June. However, on a month-on-month basis, most products experienced a decline compared to June.
On a cumulative basis polyester exports rose to 802,000 tons Y-o-Y during Jan-July’24, surpassing the increase seen during the same period last year.
In June and July, exports of both filament yarn and staple fiber experienced significant month-on-month declines. Exports of filament yarn were particularly affected by BIS regulations, and a higher base from the same period last year led to continued negative year-on-year growth. Staple fiber fared slightly better, though it followed a similar
This decline in filament yarn and staple fiber exports during June and July could be attributed to two potential factors: domestic producers of filament yarn and staple fiber may have adjusted their strategies, gradually adopting a price-support approach, which complicated export negotiations; alternatively, a decrease in overseas demand may have led to a corresponding reduction in raw material procurement.
The appointment of Muhammad Yunus as the interim leader of Bangladesh has brought a glimmer of hope to the domestic apparel sector grappling with a series of challenges. With a staggering $46.99 billion in export value at stake in 2023, and the world's second-largest garment exporter, Bangladesh's apparel industry faces a pivotal moment with billions of dollars in business and thousands of jobs hanging in the balance.
Business at stake, billions on the line
The Bangladesh apparel industry generates an estimated $46.13 billion in annual export revenue. Disruptions to production and supply chains could jeopardize a significant portion of this income. Major brands like H&M, Zara, and Gap, who heavily rely on Bangladeshi manufacturing, are closely monitoring the situation.
Table: Bangladesh exports
|
Year |
Export Value (in billion $) |
|
2021 |
35.81 |
|
2022 |
42.61 |
|
2023 |
46.99 |
The disruption in the supply chain has left many current orders in limbo. According to a survey by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), nearly 30 per cent of orders are facing delays, with some buyers even cancelling their orders altogether. This has put immense pressure on manufacturers who are struggling to meet their commitments.
The critical Christmas season too is fast approaching, and buyers are scrambling to ensure timely deliveries. Many have already begun diversifying their sourcing strategies to mitigate risks. Countries like Vietnam, India, and Cambodia have emerged as major beneficiaries of this shift. For example, Swedish fast-fashion giant H&M, which sources a significant portion of its products from Bangladesh, has reportedly diversified its supply chain to mitigate risks. "We are constantly evaluating our sourcing strategy to ensure a resilient and sustainable supply chain," said a H&M spokesperson.
The search for Bangladesh+1
The current situation has accelerated the trend of Bangladesh+1’ sourcing. Buyers are increasingly seeking to diversify their supply chains beyond Bangladesh to minimize risks associated with political instability and labor unrest. This trend poses a long-term challenge for Bangladesh, which needs to address its structural issues to remain competitive.
Table: Major beneficiaries the uncertainty
|
Country |
Estimated increase in apparel exports (2023) |
|
Vietnam |
15% |
|
India |
10% |
|
Cambodia |
8% |
However, Muhammad Yunus' leadership is being seen by many as a positive development. As Faruque Hassan, President of BGMEA says, "We are confident that under Mr. Yunus's leadership, the industry will overcome its current challenges and emerge stronger." His promises of stability and initiatives aimed at improving worker conditions and strengthening supply chains have been welcomed by buyers.
Emily Chen, Chief Sourcing Officer, Gap Inc. opines, "We are cautiously optimistic about Muhammad Yunus' leadership. His commitment to improving labor standards and ensuring a stable business environment is encouraging. We will continue to monitor the situation closely and work with our partners in Bangladesh to navigate these challenging times." The new government has also taken several initiatives to boost the industry, including providing financial incentives to exporters and improving infrastructure. However, the effectiveness of these measures remains to be seen.
The Bangladesh apparel industry is at a crossroads. While Yunus' appointment and the government's initiatives offer a glimmer of hope, the industry faces significant challenges in the short and long term. The ability of the industry to adapt to the changing global landscape will determine its future success.
The Lenzing Group, a key player in the regenerated cellulose fiber industry, is set for a leadership change. Rohit Aggarwal will take over as CEO on September 1, 2024, following the departure of Stephan Sielaff, who will step down at the end of August by mutual agreement with the Supervisory Board.
Aggarwal brings decades of experience in the textile and chemical industries, with a deep understanding of global markets and strategic development. His extensive experience in Europe, the USA, and Asia positions him well to lead Lenzing through its next phase of growth. Aggarwal is recognized for his expertise in the textile, non-woven, and fiber markets, aligning closely with Lenzing's core business.
Cord Prinzhorn, Chairman of Lenzing’s Supervisory Board, praised Sielaff for his contributions during a challenging period and expressed confidence in Aggarwal’s ability to steer the company forward. Sielaff reflected on his tenure, highlighting the significant improvements made under his leadership.
Aggarwal acknowledged the challenges ahead, emphasizing the importance of continued efforts to drive Lenzing's turnaround and maintain its position as a leader in sustainable textiles. He expressed gratitude for Sielaff’s smooth transition and looks forward to working closely with the Lenzing team to achieve future success.
The Lenzing Group, a key player in the regenerated cellulose fiber industry, is set for a leadership change. Rohit Aggarwal will take over as CEO on September 1, 2024, following the departure of Stephan Sielaff, who will step down at the end of August by mutual agreement with the Supervisory Board.
Aggarwal brings decades of experience in the textile and chemical industries, with a deep understanding of global markets and strategic development. His extensive experience in Europe, the USA, and Asia positions him well to lead Lenzing through its next phase of growth. Aggarwal is recognized for his expertise in the textile, non-woven, and fiber markets, aligning closely with Lenzing's core business.
Cord Prinzhorn, Chairman of Lenzing’s Supervisory Board, praised Sielaff for his contributions during a challenging period and expressed confidence in Aggarwal’s ability to steer the company forward. Sielaff reflected on his tenure, highlighting the significant improvements made under his leadership.
Aggarwal acknowledged the challenges ahead, emphasizing the importance of continued efforts to drive Lenzing's turnaround and maintain its position as a leader in sustainable textiles. He expressed gratitude for Sielaff’s smooth transition and looks forward to working closely with the Lenzing team to achieve future success.
Martin Shankland has stepped down from his position as thecurrent Head-Global Operations, Adidas AG as the brand continues to shrink its executive board.
Having served Adidas for over 27 years, Shankland, resigned from the company’s board on Aug 10, 2024. Part of his responsibilities are being taken over by Harm Ohlmeyer, Chief Financial Officer, Shankland’s resignation reduces Adidas’ executive board to just four member.
Shankland joined Adidas’ executive board in 2019 under the leadership of Kasper Rorsted, former Chief Executive Officer. He appointment followed a series of crisis for the German company including boycotts in China and the implosion of the now canceled Yeezy partnership with the rapper Ye.
However, the company’s performance rebounded in the past year under the leadership of Bjorn Guiden, CEO, who joined the firm in Jan 2023. Guiden has been responsible for reinventing the company’s management team and overseeing the operations of the brand Adidas.
The Source Home & Gift show, happening from September 1-4, 2024, at NEC Birmingham, will showcase exhibitors from new regions, including Peru, South Korea, and Portugal, along with returning pavilions from the Philippines, Egypt, Nepal, China, and India.
Portugal’s Bioneuro design leads the charge with its innovative integration of biology, neuroscience, and design. Their River collection, blending ceramics and iron, is inspired by riverbanks and aims to foster emotional well-being through design. Each piece is crafted to promote tranquillity and introspection.
From South Korea, Ecomass will present eco-friendly kitchenware and household goods made from sustainable materials like sugarcane and recycled plastic, focusing on green management and sustainability.
Peru’s Sumaq Qara, meaning "Beautiful Leather" in Quechua, supports female victims of terrorism and domestic violence. Founded in 2006, they offer products made from natural fibres such as alpaca and merino wool, using ancestral techniques like embroidery and crochet.
Source Home & Gift 2024 is set to be a key event for the retail community, bringing global manufacturers together with leading retailers, brands, and designers to explore responsible and sustainable sourcing.
Australian fashion retailer, Forever New is enhancing its real-time inventory management, omnichannel order fulfillment and digital-to-store engagement by adopting the OneView Unified Commerce platform. This cloud-native platform offers a comprehensive view of orders, transactions, customers, and inventory, making this data readily accessible to store associates.
Naresh Teckchandani, General Manager –IT, Forever New, says, the OneView Unified Commerce Platform will facilitate seamless customer interactions with the brand through its modern, agile in-store tools and technology. The platform’s composable, API-first architecture provides the flexibility and control necessary to support the brand’s global omnichannel strategy as customer behaviors evolve and the company continues to grow.
Forever New operates in 25 markets and has over 480 retail and concession stores worldwide.
The Cotton Made in Africa (CmiA) initiative has joined the steering committee of the Partnership for Cotton, a new multilateral initiative aimed at promoting sustainable cotton production in Africa. The partnership, founded by the World Trade Organization (WTO) and FIFA, brings together key stakeholders in the cotton industry to support economic development in cotton-producing countries.
Tina Stridde, managing director of the Aid by Trade Foundation (AbTF), expressed enthusiasm for the partnership. She said that CmiA, which AbTF oversees, is thrilled to contribute its expertise to this important initiative. CmiA has a long history of working with small-scale farmers in Africa to promote sustainable cotton production. By joining forces with the Partnership for Cotton, CmiA hopes to help create a more equitable and sustainable value chain for African cotton.
The Partnership for Cotton focuses on West Africa's "Cotton 4" countries (Mali, Chad, Burkina Faso, and Benin) and Côte d'Ivoire. The initiative aims to increase business activity in the processing stages of cotton production, creating new opportunities for local economies. CmiA, with its experience in these countries, will play a crucial role in supporting this goal.
The steering committee of the Partnership for Cotton met in Cotonou, Benin, from June 4-6 to discuss progress and next steps. Members visited an industrial estate where African cotton is processed into textiles, highlighting the potential for growth in the sector.
The partnership's collaboration with CmiA is a significant step towards realizing its vision of a sustainable and prosperous cotton industry in Africa. By working together, these organizations can help to improve the livelihoods of millions of small-scale farmers and promote economic development in the region.
