The Top 5 Areas to Focus on to Approach 2023 with a Winning Formula of Optimism and Innovation
By Angela Baidoo
It goes without saying that after the pandemic, 2022 was the year that no-one saw coming, with the Russian invasion of Ukraine, economic uncertainties, and consumer sentiment erring on the side of caution, driving change globally. So, how can the fashion industry meet these challenges and weather the incoming storms to come back stronger by year end 2023?
As the cost-of-living crisis causes a decrease in discretionary spend, the industry will see less frivolous purchasing as more pressing priorities come into play, such as staying warm at home, and a need for products that enhance value by serving multiple end uses for different lifestyle needs.
– Laura Yiannakou, Senior Womenswear Strategist, WGSN
Here at The Impression, we are taking a look at the five key areas that the industry should look to optimize and take into 2023, as global events impact the way in which consumers, across all regions, will think and act differently. These thought-starters should provide a catalyst to assist your brand in thinking differently about how to approach dealing with continued change with resilience, optimism, and innovation.
Index
- Re-branding the Retail Experience
- Develop a Multi-dimensional Marketing Approach
- Lean into Legacy Planning
- Harness Creativity With, and For the Culture
- Take a Byte out of Virtual Reality
1. Re-branding the Retail Experience
Due to the unforeseen events that derailed the post-pandemic rush of optimism – the war in Ukraine, rising inflation, the cost-of-living crisis – the retail landscape will remain a challenging terrain into 2023, as the relief that was promised for the sector is likely to be set back another year.
To combat these headwinds, the retail space should be repositioned as a place to engage with your customer 365 days of the year. Utilise storytelling and experiences, which takes the pressure off overt selling methods and is a way to immerse your customer in your brand. Imparting knowledge on history and craftmanship, or deep diving with the creators of your latest collaboration. And invest in personalization through the enhanced customer service approach over broad-sweeping digital tools which can feel invasive.
In 2023 it will be all to play for but creating connection to encourage footfall will be key. The customer needs to be reminded of why they fell in love with your brand, and why you should remain on their wish list. As they consider how to maintain their pre-pandemic quality of life, making choices on where and what they shop for will become more intentional.
Moving through uncertainty requires wise use of resources. Consumers are refocusing on what value means to them and spending more intentionally.
– Joey Kong, Mintel Trends Analyst, APAC
Expanding into Experiential
As consumers start to re-evaluate their spend (North America and Europe have seen the biggest decreases in financial and economic confidence since mid-2021, with confidence in the economy dropping by 40% in North America and 24% in Europe, according to market research company GWI), look to convert them through immersive experiences, enabling them to continue interacting with your brand through learning, creating, or simply making memorable moments. Create novel experiences that connect on an emotional level and explore these in the virtual and physical realms.
Lessons can be learned from the sportswear arena, with brands such as Nike perfecting the art of collecting and analyzing customer data in order to develop a retail experience that specifically meets the needs of the local community. Experiences should encompass the journey the customer is taken on when in store, considering what they need before they have to ask, providing frictionless purchasing, and creating moments of natural discovery when it comes to products. And for those in the high-net worth category, these moments should be unique and tailored by person and take on board regional nuances.
CASE STUDY – Nike’s Rise concept opened its latest store (following on from locations in Guangzhou, China, and Seoul, South Korea) in Miami’s Aventura Mall – the first in North America – which will focus on community, specifically the Latinx population who make up just over 70% of residents. Harnessing technology through consumer insights means a curated selection that better represents the customer’s needs, while embedding a hyper-holistic service of bi-lingual sales assistants. The store opening saw Nike provide a platform for local illustrator Ruth Burotte Tamfee, who developed a collection of Miami-inspired illustrations, which included the iconic 305 area code. The Lounge is a boutique space where products can be tested on treadmills, and The Stands acts as a service destination for live programming, such as talks and panels with local athletes and tastemakers. The digitally connected store also features a floor-to-ceiling screen tracking real-time running stats from Nike Run Club members.
Prioritise the 3 R’s: Resale, Rental and Repair
Due to the explosion in the rental and resale market – valued at between $100 and $120 billion worldwide, nearly tripling since 2020, as tracked by the Boston Consulting Group – buying now means big business, as it’s not just StockX obsessives that are fuelling the market, it turns out we are all traders now. When seeking to invest in luxury goods buyers are factoring in a product’s ‘resale value’ and how much revenue today’s purchases will garner tomorrow. According to the Boston Consulting Group “The second-hand market is already worth 3% to 5% of the overall apparel, footwear, and accessories sector and could grow to as much as 40%, depending on macroeconomic conditions”.
Despite value and affordability remaining top of mind, and driving the acceleration of this market, the idea of securing a rare vintage find or exclusive limited-edition drop is also fuelling the sectors growing popularity. Enabling players from across the industry to partake in resale or rental.
The resale market is often underestimated, yet the increase of ‘limitarian’ consumers with a more frugal, sustainable mindset will continue to drive this business model. Consumers are increasingly looking for products that will hold future resale value, which we’re tracking more and more in the apparel, footwear and accessories markets.
– Laura Yiannakou, Senior Womenswear Strategist, WGSN
The supply-chain problems from 2021 which led to the over-ordering of stock to compensate, will be an ongoing headache as retailers work through their stock levels with promotions and discounts as incentives. The future may be about a reduction of inventory and the taking of a minimalist approach to the depth of product buys.
The industry should be inspired to create a sustainable solution that is both environmentally sound, taps into the way consumers are shopping now, and will drive sales via owned channels. Taking the form of an additional re-commerce space within physical stores or via ecommerce platforms will mean control over the resale narrative, maintaining brand image and avoiding the pitfalls of devaluing the brand with ongoing discounts. Build a branded offer that will inspire audiences to make your brand the first stop on their purchase journey, knowing that by coming direct they will get an authentication guarantee, the chance to trade-in their pre-loved items, and as rising inflation creates an environment of cautious spending, they will still be able to shop with the brands they know and love, without having to trade down.
The Gender Fluid Revolution
Far from cannibalizing sales from men’s and women’s categories, gender fluid fashion is leading a new wave of category expansion by breaking down traditional codes around dressing according to type. As visual search engine Pinterest clarifies, based on the growing number of searches from Gen Z and Millennials (ruffles shirts men, was +95%), 2023 will be the year of “Femme for All”. To approach this shift, there should be a revision of language around marketing copy, campaign and ecommerce model casting, and styling choices.
Gen Z are a generation more empowered than ever to speak up on their preferences and going forward we can expect them to be unbound by gender identity when it comes to purchasing fashion. As consumers they are naturally more receptive to the idea of shopping across the aisles, and outside of their assigned gender. Evolve the narrative and merchandising strategies around gender to cater to this growing demographic whose ideas are more progressive and whose purchasing power will continue to shift the market.
We are entering an era which sees a considerable shift of purchasing power from Millennials to Generation Z. Millennial spending sits at just over $65 billion – whilst Generation Z is at almost $100 billion”
– Naji El Arifi, Wunderman Thompson
Gender fluidity as a cultural movement also found its way onto the runways during both the men’s and women’s show this year, with designers from Ludovic de Saint Sernin to Joseph Altuzarra’s Altu, and non-binary model Joakim Gjemmestad who has walked for Louis Vuitton and Balmain leading the way.
In recent years colors such as Millennial Pink and Gen Z Yellow have been worn inclusively by men and women, and both leading consumer and trend forecasting company WGSN and color authority Pantone’s Colour of the Year were universal shades of purple (WGSN opting for Digital Lavender for 2023, and Pantone for Very Peri for 2022). A shade made by merging two colors heavily associated with the male (blue) and female (red) genders, pointing towards the way in which this blend will become more mainstream.
Test the waters and forgo gender-specific tropes to develop ranges that don’t simply rely on sweatshirt and track pants, utilitarian or oversized silhouettes to negate fit issues. Look to the way in which black-owned brand K.ngsley’s signature tank top, which features multi-straps and cut-outs has become a celebrity favorite, and Australian brand Dion Lee whose ‘Dion Lee Core’ range is a collection of “seasonless essentials in unisex silhouettes”, alongside Fang NYC’s take on “Gender-expansive” bodycon knitwear.
Designs should take on the details and construction typically associated with both genders to accommodate an expanded range of body shapes – from seaming to broader shoulders, fastenings, and body-contouring – to redefine the way gender is expressed, and capitalize on a movement which is quickly becoming the norm.
Adapting store environments to meet this new co-hort, will also need to be factored into retail strategies, starting with the reworking of fitting rooms and training in-store staff to welcome all however they present, and look to cast and style campaigns with non-binary models in a range of looks that demonstrate how gender-fluid fashion can work for all.
2. Develop a Multi-dimensional Marketing Approach
As marketing spend becomes more fragmented across even more channels, marketers will have to think more creatively to drive engagement with their audiences who are seeking moments of escapism, at a time of heightened digital fatigue. According to a GWI survey of participants aged between 16 and 64, those who were using social media less because it was causing them anxiety was up by 11%. 2023 will shift digital marketing towards moments that matter in order to cut through the noise. Marketing messaging should take a multi-dimensional approach and be adapted per platform, with honest, playful, and expressive methods likely to resonate.
Disseminate marketing budgets across influencer collaborations, podcasts, ‘snackable’ short videos and campaign films, streaming show partnerships, virtual experiences, lo-fi product placements, and hi-low collaborations – key examples from 2022 include Polo Ralph Lauren x Salem and Morehouse HBCU’s, Bottega Veneta’s app, Palace x Gucci’s campaign with puppets, Coach’s #y2coach Demi bag campaign, and Loewe’s collaboration with whimsical creator Nick Trawick to promote their spring summer 2023 men’s runway show.
Learn lessons on what users are reacting positively to fast (through likes, shares, remixes, and challenges), and reinvest into what is working. But as with the fast-moving nature of digital media, always look to what is next on the horizon and shift along with the zeitgeist.
The Streaming Opportunity
The major streaming giants – Netflix, Amazon Prime Video, Disney+ – have been known to influence fashion trends, even if inadvertently. Netflix’s The Get Down and Stranger Things sparked a resurgence for all things retro, while Emily in Paris’s off-beat fashion choices have seen fans clamor to replicate the main character’s looks.
Netflix, spotting this rise in demand, opened a dedicated e-commerce store (Netflix.shop) to house its range of show-inspired merchandise for superfans, with a tie-in with US big-box retailer Walmart focussed on sales of products across music, apparel, toys, and games, from CoComelon bed sets to Squid Game T-shirts. While Amazon’s established e-commerce platform allowed for a more seamless merger of fashion and tv show fandom, as it created a ‘shoppable series’ when it launched Making the Cut in 2020, with winning looks from the designers instantly selling out.
As streaming platforms move to the integrated ad format, brands will have to devise new ways to create campaigns that steer away from the intrusive and fit more naturally, either after show trailers, as users are scrolling for content to view, or via more covert partnerships within shows. Banner ads could be placed at the bottom of episode previews, and seasonal (New Year’s Eve, Halloween, or Christmas) ads could be filtered between suggested content in the relevant categories, for example, Chanel’s No5 Christmas campaign starring Marion Cotillard would not look out of place as a user is scrolling the ‘Romantic Films’ list. While OOH activations could embed QR codes that direct to a brand sponsors capsule collection inspired by a series.
The Future is Co-Creation
With the majority of social media platforms reliant on user-generated content (UGC) as their main source of output, brands should seek to work with creators who share their values and are a good fit, for equitable partnerships. Test the idea of bringing in the voice of the next generation to spark new ideas and trust them to remix your products in unexpected ways.
As attitudes towards data gathering, privacy, and tracking grow increasingly suspicious, marketers will need to develop new ways to engage through creative campaigns and activations, that build deeper connections with audiences. Working in partnership with those native to established social media platforms, and emerging spaces such as BeReal, Ello and Discord, can result in honest and open conversations with a broader audience. And ensure you are speaking to marginalized communities by giving them the chance to tell their own stories. Moving to co-creation will help brands speak with, rather than just sell to potential customers, embedding themselves within creator communities in a way that is not forced, fostering trust and a positive dialogue.
Customers can also become a part of the co-creation model, by developing feedback loops and roundtables, or simply by using voting polls via social media, they can influence the decision-making process, which also means producing goods that are more in-line with demand – from new colorways, to trims, and re-releases, bringing the customer into the formerly unseen development process.
And as younger consumers are more susceptible to recommendations from their peers within online communities, takeovers (on Instagram Stories and TikTok) and letting creators lead on marketing activations should be tested during key seasonal events, especially those from a global perspective, such as festivals in new regions across the Middle East (Soundstorm MDL Beast in Saudi Arabia) and Africa (Afrochella in Ghana).
3. Lean into Legacy Planning
Fashion’s merry-go-round went into overdrive in 2022, as the year was met with departures, new appointments, and brand closures, creating an atmosphere of immense change, which could have presented as instability to those on the outside looking in. The coming year is an opportune time for luxury and heritage brands to revisit their legacy planning strategies for those working at – as well as emerging talent considering – the Creative Director level.
Invest in New Talent and Take the Long View
A case can be made for both the distilled signature that a seasoned Creative Director who has embedded themselves into the DNA of a brand (for example a Max Griffiths at Max Mara), and the excitement that plucking a new hire from their own eponymous label to head up a legacy brand can bring. Both scenarios are equally welcomed, but over the last two decades we have witnessed a lot less of the former and an increasing reliance on the latter, with a middle ground of industry veterans making up the difference.
In 2023, brands should revisit their pledges of industry-wide change from 2020, where slowing down and simplifying were heralded as the way to go. In adopting this new mindset new talent, whatever stage they are within their careers, can enter a luxury fashion house knowing that there is a concerted effort to place support behind their appointment, and that they are being invested in for the long term. Whether that means placing these new hires in categories that align with their aesthetic (i.e., separate hires for each department, rather than a ‘one hire, does all’ approach), allowing them to continue building their own brands outside of their day job, or encouraging them to create and hire a collective of like-minded creatives to continuously produce the churn of new ideas needed to satisfy the accelerated pace that the industry works to today.
Trial the Guest Designer Programme
Guest designer and collaborative programs could also be a way forward for luxury houses who are grappling with future succession planning. Rotating designers will gift them with the thrill of contemporary design ideas that are of-the-moment, without the media scrutiny that comes with yet another new name being taped over the old.
At Jean Paul Gaultier Couture (Chitose Abe, Glenn Martens, Olivier Rousteing), AZ Factory (Thebe Magugu, Ester Manas, and Lutz Huelle), and Karl Lagerfeld (Kenneth Ize), bringing on new names to put their stamp on a season offered a mutually beneficial solution that gave emerging and established names the chance to tap into the resources of an atelier, the framework of a global brand, and the spotlight of a runway show under the banner of said label, which in some cases, could also serve to introduce them to a new audience.
4. Harness Creativity With, and For the Culture
The importance of taking the time to understand how the cultural landscape has shifted cannot be stressed enough. Sticking with the status quo is unrealistic as we enter the third post-pandemic year. Consumers are growing weary of constant scandals and re-alignments from brands which many have known and trusted for decades, and rather than accepting the norm they are becoming much more vocal in expressing their opinions online.
Going forward there needs to be a concerted effort to meaningfully invite the culture in, to be part of the conversation, and in many instances to let them lead on activations (from storyboarding to casting), marketing campaigns, and even product development. Handing the reins over to those with lived experiences will create richer, more authentic content whose reach will be deeper. Resonating at a time when apathy is at an all-time high, as outlined in Mintel’s Global Consumer Trends 2023 report, which highlighted that 22% of US consumers have experienced mental exhaustion, and a further 20% burnout.
Be of Service to a Community
In these uncertain times consumers will be looking to brands that understand the current ‘Cost-of-living’ crisis and will respond in a way that shows how their values align. During the pandemic many brands chose to give their sample rooms and factories over to the production of masks and PPE, something which connected with customers on an emotional level. And now when they will once again be registering brands responses, there is scope for them to help the communities they operate in.
As consumers look to products that will offer them longevity, communicate the quality of the materials and manufacturing processes that goes into each item produced. Embed services such as repairs, that extend the life of purchases for an extended period. Bottega Veneta’s recent announcement of a lifetime guarantee with their ‘Certificate of Craft’ launch, was proof of the way in which this service goes hand-in-hand with luxury fashion.
And as the mental health toll of the past three years endures, bringing in wellness specialists for in-store sessions will appeal to all demographics, broadening the brand-to-consumer relationship and meeting caution (over spending) with care.
Integrate Cultures and Add, rather than Subtract Value
The rush to capitalize on a cultural moment, or a specific culture rising can sometimes lead to calls of appropriation, but the tide is beginning to turn.
Customers from the Middle East, Africa, and India require a localized approach when it comes to everything from product assortments to marketing activations. In-country influencers and local tastemakers should lead, and brands should follow. As was seen at Chanel’s Métiers d’art runway show in Dakar, where the students of the Kourtrajmé film school, that was founded by Ladj Ly and boasts Pharrell Williams as an advocate and ambassador, documented the pre-show preparations in a documentary-style film which was previewed across the luxury houses social media channels. And in India French department store Galeries Lafayette, and US multi-brand e-commerce store Revolve are all putting down roots and will do well to tap into the highly important wedding season, as was seen at Louis Vuitton, when they launched a limited-edition footwear collection for the bridal market.
Marginalized communities, such as those bringing to the fore queer and youth culture are starting to be recognized for their creative contributions with major luxury labels and streetwear brands. Dazed x Burberry’s Whitby Street takeover intentionally included a conversation between multi-disciplinary artist Darkwah Kyei-Darwah (who champions emerging queer talent) and recording artist and Non-binary Deity Virgin X on how they move through the world as openly queer people. While Oakley worked with Brazilian streetwear brand Piet for a collection of reimagined archive pieces, that saw Piet founder Pedro Andrade take the specific nuances of Brazil’s streetwear culture and create two lines that focus on both the brands’ future and heritage. With Oakley bringing in Brazilian Art Director Hick Duarte for the campaign with music artists and creatives from Kyan, to Fleezus, and Nenê Raridades.
5. Take a Byte out of Virtual Reality
For many the turbulent conditions of this year were reason enough to put digital projects on the back burner while focussing on sales of the tangible. But the pace of innovation in the virtual world is not set to slow, with Web3 opening the door for new ways to discover and review products, develop a parallel digital identity (i.e., avatar), and shop in a boutique in Tokyo when located in Berlin via a livestream on TikTok or digital store in Decentraland. Ignoring the future of life as we know it will mean playing catch-up, and when in the digital race being in second place will likely affect brand perception, as if what may be deemed luxury in the real world, translates to a Sims-like experience circa 2000, that may be where your journey ends with a generation of Z and Alpha customers.
Brand Ambassadors go Digital
Virtual brand ambassadors are gaining ground across fashion and beauty, as the choice of digital avatar as brand representative is looking ahead to the way in which we will soon solidify our dual identities. The ease at which the Lensa AI selfie app – which created digital portraits of its users who submitted their photos – went viral across social media, is a prime example of the way in which there is a growing appetite for envisioning ourselves as our virtual doppelgänger.
Virtual influencers and brand ambassadors also pose less of a risk, as their personalities can be crafted, an online presence built from scratch, and a set of values that align with the established brand messaging embedded in their back story. They can ‘exist’ across most social media platforms and are metaverse ready, and although the choice of a meta-human may at first seem controversial, it presents an exciting opportunity to tackle the issue of representation and challenge the almost impossible standards that have become the norm in the beauty world. These ambassadors can be “formed pixel by pixel”, as was the case for make-up brand Nar’s, who launched their Power Players, that act as virtual guides and represent a range of ethnicities and body types.
Set-up Virtual Stores for Seasonal Activations
Adding another dimension to e-commerce, brands investing in virtual stores for seasonal activations are preparing for future forays into the metaverse and educating their audience in a fun way in the process. Bridging the gap between the physical store space and online, the virtual store is an additional omnichannel experience which gamifies shopping for all demographics.
This store format can play a significant role in soft selling to a consumer weary of being tracked and mined for their data and will work particularly well for seasonal holiday activations and major global events. December 2022 saw both Coach and Crocs open virtual storefronts which acted as Holiday Gift Shops with shoppable content. Containing interactive elements, players could uncover hidden treats, and take mini-quizzes to help personalize the experience, while brands could build a conversation with new and existing customers.
These virtual spaces should be developed on existing platforms with digital specialists, who can provide the tools and expertise to create worlds that can only exist digitally and will spark wonder and increase store dwell time. As a new way to drive engagement and increase sales throughout the year, Coach’s ‘Holiday Gift Shop’ also came with an IRL activation at the Rockefeller Center skate rink, encouraging their customers to “shop, skate, and hang out” for the month of December.
Engage Consumers with a Phygital Fashion Hybrid
The infinite possibilities that the metaverse will bring presents a significant opportunity to grow sales in the virtual realm, but brands may face a challenge in convincing their audience to buy into the concept of intangible goods which only exist online. Look to 2023 as the year to integrate new methods to onboard the customer with the help of phygital fashion, as this hybrid model that pairs NFTs with physical products, offers a gateway to entry for those in the late majority adoption lifecycle.
At a time when there is still confusion over exactly what NFTs are and how digital fashion can be applicable to daily life, educate the customer on the nature of these digital goods and their worth and benefits, for example, the luxury market can use this tool to give a small engaged community early access to capsules, exclusive events and shows, and personalized styles, as well as a guarantee each item is genuine with traceable ownership – while simultaneously providing them with a tangible real-world product that links to their virtual purchase.
Early adopters and those entrenched in the world of gaming (a market currently valued at $197 billion, with key active regions including Asia, Europe, Latin America, and North America, according to Exploding Topics) will have already acquired branded NFTs and digital fashion. From Louis Vuitton creating skins for platforms such as Fortnite, to Nike’s acquisition of RTFKT and the subsequent release of its Cryptokicks collection, serious collectors are seeking out rare drops of exclusive merch, that is made all the more covetable by having an IRL twin. A recent example of this being Matthew M Williams’ Givenchy collaboration with (B).STROY of the TK-360+ knitted sneaker, whose release was celebrated with a complimentary NFT for the blue and green colorway.
At a more commercial level, social media filters are an accessible entry point for digital fashion, with H&M launching their latest ‘Metaverse Design Story’ collection with the Institute of Digital Fashion. Consisting of otherworldly creations and down-to-earth party pieces available to buy in-store, timed perfectly for the holiday season. As part of the activation users with the H&M App could download five augmented reality filters that replicated the dresses for a virtual try-on before purchasing, and an interactive virtual space made available on H&M’s site provided a deeper dive into the collection.
The increasingly virtual dimension of fashion creates exciting future opportunities for H&M, allowing us to create vibrant, bold and daring virtual counterparts to our physical collections.
– Ann-Sofie Johansson, Creative Advisor, H&M
This phygital hybrid model will allow new audiences to instantly apply a sense of value to a product purchase which may initially only exist outside of the real world, but through offering physical merchandise, alongside an NFT, customers can continue to reap the benefits post purchase. As an NFTs unique digital markers can provide access to a runway show and after-party, a preview of an upcoming drop, or a branded skin to wear on any of the virtual platforms – from Roblox to Decentraland.
Incentivizing any curious customers to take the leap into the metaverse with a trusted brand.