2020 will go down in history as one of the most challenging years for the textile industry marked by declining sales, disrupting supply chains and shifting consumer behaviour. COVID-19 is the catalyst for an industry at the brink of digital transformation. The pandemic has created an opportunity for the denim world to compound on our digital presence, enabling us to be more innovative and efficient. For Neela, this shift was inevitable and will continue to create opportunities for us to differentiate between building better and smarter operating models.
Equally, we feel that the pandemic has emphasised the need to be more sustainable and responsible for many players across the denim supply chain. While, we have always been responsive to create a better future for our customers, workers and the planet, this will prove to be a long-term boon for everyone across the supply chain as more brands respond to this need.
If you’re looking for an interesting ‘start of the year’ read, we recommend taking a look at the 100-page State of Fashion Report by McKinsey & Company and Business of Fashion (BoF). For those of you looking to skim, we’ve summarised our takeaways relevant to the denim industry in just six points:
45% of fashion executives and stakeholders surveyed in the report, predict that COVID-19 will be the top challenge in 2021.
The report anticipates a partial to full recovery for brands in sales by the third quarter of 2022. The primary driver in this scenario will continue to be through digital channels, as people in many countries will be reluctant to gather in crowds. For denim mills, this means that global trade shows will most likely remain virtual until 2022. At Neela, we are investing heavily in digitalisation and communication, and we will be launching a series of new collections, resources and projects throughout every quarter of 2021.
Two-fifths of executives plan to make the move towards season-less fashion, adding to a growing chorus of brands and designers, calling for the fashion calendar to be rewired.
Since stock prices for sportswear have gone up by 7%, we predict demand for softer and more comfortable stretch denim for the work-from-home reality that most of us are currently suspended in. Next year, our priority is to closely follow the global consumer markets to support our customers in staying ahead of the market. Our new product launches will focus on meeting new lifestyle changes and critical expectations of consumers today.
Almost three-fourths of fashion executives expect their online business to grow by 20% or more in 2021.
Digital adoption soared during the pandemic, with brands worldwide embracing live-streaming, influencer marketing, and social shopping. Manufacturers must also optimise their digital presence while persuasively integrating human touch. With that understanding, we are now adopting smarter operating business models and shorter production cycles. We will soon be launching a new digital web platform for insights, news and innovative product launches in the first quarter of 2021. To know more, sign up for our newsletter here.
Two-thirds of consumers reported that they would stop buying, or significantly reduce purchasing from a brand if they found it was not treating its employees or supplier employees fairly.
As consumers become more aware of vulnerable garment workers and cotton farmers’ plight, companies need to offer more security and justice throughout the global value chain. At Neela, transparency is at the forefront of our objectives, and we offer justice, dignity and security to all our employees, at all levels.
66% of fashion executives expect travel retail sales to recover to their former growth levels in two or three years.
Travel and Retail sector remains heavily disrupted, and destination shopping will be far from reality over 2021 and possibly 2022. In light of that, brands will need to Category shifts aren’t alien to the denim world; however, it’s about who can offer the best product, combined with best, sustainable and ethical practices. The light at the end of this tunnel is recovery, driven by innovation and empathy.
Nearly half of the fashion executives expect a market share redistribution, resilience and strategic partnerships to be top themes in 2021.
We need to mitigate future supply chain disruptions and move away from transactional supplier relationships. Instead, we must move towards forging deeper partnerships that perpetuate agility and accountability. Neela believes strongly in openness and transparency, which is why we continue to provide relevant information along with our products, even before it is asked of us. With our new initiative in the next quarter, we aim to become even more open towards our customers and their consumer markets.
Read the full report here.
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