Is it possible to grow an exclusive brand in the digital world? That in short is the whole idea of a debate staring at the luxury fashion industry where growth has slowed. This at a time when digital technologies have allowed other sectors to expand globally. The mood in the luxe sector is grim. Global volatility and stock market uncertainty have led to an overall slowdown. A report by McKinsey and London-based publication Business of Fashion last month revealed, nearly 70 per cent of surveyed fashion executives, investors and industry observers believe conditions for the industry have become worse.
According to Achim Berg, a lead author of the McKinsey report and leader of the firm’s apparel, fashion and luxury practice, the key message is that 2016 was a really bad year for the industry, probably the worst one since the financial crisis. That was especially true for the luxury part of the industry which was a bit surprising because everyone knew that the year gone by was bad. But it was never expected to be so bad.
Some brands have turned to new technologies to connect with an increasingly digital consumer who demands immediate gratification, quick service and ever-new ways to interact with old brands.But the luxury world, by its very nature, can seem out of place with trends in today’s marketplace.
Many brands are trying anyway, though for now success seems limited. The McKinsey and Business of Fashion report forecasts annual online sales of luxury fashion will increase fourfold to 12 per cent of total sales in 2020 from an anaemic 3 per cent in 2010. Perhaps no other innovation has garnered more attention in recent years than the “see now, buy now” process in which a designer’s collection is presented on a fashion show runway to the usual select cadre of press and retailers, but also streamed on the web.