The Future of Fashion Industry in America - Case Study Example

Future of fashion industry Introduction Like any other industry, fashion industry too stands at the front of an impervious threat resulting from an overall world uncertainty, that is triggered by resource scarcity, climate change, consumer behaviour that is changing and vulnerable economic conditions. In order for fashion industry to stay as sustainable it is important that these threats are understood in the first place, appropriate actions taken while at the same time improve the lives of workers, customers and supplier around the world. Since these threats are uniformly strewn across the whole world, it does not really matter as to which context the industry is talked about - it could be in context of whole of United States of America or one of the 84 established or emerging global cities in the world. Global fashion industry, in what seems at the moment, is fraught with many challenges that range from climate change to resource shortages, new technologies to demographic change and even seismic shifts in the global economy. There are also many a things that can, at times, be hard to anticipate; which makes it impossible for the industry to get prepared for. Since all these problem areas are not region-dependent, it can be assumed that whatever challenges the industry might face in future would affect it through every other region. At the macro or micro level, these changes would be so profound that they are bound to affect everyone in the chain - designers, suppliers, big brands, small brands and even niche retail outlets. The future But that is not to say that these challenges must be seen in the negative light as far as the industry's future is concerned; they can also be pointers towards exciting opportunities in terms of promising new ventures or a promising new direction that the industry is not able to think of at the moment. At the moment the industry is huge, and that is a big deal. Think alone of the luxury goods and global apparel accessories market: it has already crossed around 1400 billion mark in revenues and the industry has already made a clout for itself. It is hard to predict how the industry would look like ten years down the line either in the US or even in New York or rest of the developed or developing world; but given how it looks like today might as well give us an idea on its future. Taking a look 20 years back, it can be seen that lots of changes have affected the fashion industry, including some landmark events, good or bad that have taken place in the last twenty years. These events have had global impact and thus changed everything else related to all types of businesses, including fashion. Some of these events were falling barriers to trade (now (Gereffi, 1999) worldwide, 9/11 attacks, new emerging economies, rise of oil prices from a small dollar 15 to dollar 150 a barrel, extended awareness in labour and pay conditions in the supply chain thing, and last but not least the boom that the mobile telephony and internet (Afuah and Tucci , 2000) has brought in a world economy that is global (International Labour Organisation, 2004). It can be argued that some of these changes are not directly linked to the industry that is being talked about, but then the way this industry has felt ripples from these changes is a clear indication that changes as these and more such are going to affect the future of this industry in a great manner. The industry is now globalised and pretty much faster (Morris et al, 2006). It is a matter of time before it is realised how the markets respond to these changes by 2025. It, in fact, depends on a number of factors, working in tandem with each other, or in a manner that is so bewildered, that are going to shape the future. Predictability At the moment there are a number of factors that are working their effect up on fashion industry and some of them will have a profound effect on the same. These factors are "more certain" for the future and thus more important as well. Factors as these can said to be common in whatever scenarios devevlop over the next ten years or so. Industry's preparedness or lack of it would transform into the corresponding results. One of these factors is: Major ecological and environmental challenges Over the next decade or so, the world will have a billion extra people inhabiting it and that means a billion more needs. By 2025 it is expected that the world population grows to 8.1 billion people. Nations that are less developed would share the greater responsibility of inhabiting these people. The developed world's population would stay around 1.2 billion (United Nations, 2009). To interpret it in terms of fashion industry, it means that the there will be more needs arising from the developing nations rather than the developed ones. The affluence would not be in as much demand as would be budget apparels. The way the industry has been working in the recent past will not be the way it would work in the near future; the demographic change would also mean a strategic change for the industry. On the flip side, it will not only be that there would be a complete demographic shift, there will also be a greater older lot, less fashionable but more needy. The fashion industry, thus, would have to bear many new implications. Climate change and growing costs Another problem that the industry will have to face and response to which can determine its future is the climate change. year 2025 is again at the focal point of seeing the impact since all the pollution generated previously is going to manifest its effect in and around this year. What actions are taken between 2025 and now is not expected to alter anything in a major way; though it can be said that society would be, in a sense, resilient to the changes that are felt then. This change is going to alter the response times and needs of the people and how clothing would be viewed at that point of time is to be seen; would people prefer to adopt something in fashion that is sustainable in nature or would they prefer to develop some alternatives to the present trends is only to be seen. This might sound as an inapt correlation but since cost of key resources is bound to increase on account of the climate change, it will also change people's behaviour towards fashion, which, by far, stands in the luxury segment of needs a man has. Clothing industry is largely dependent on natural resources and since the industry is dependent on water and energy, which might be scarce then, it will have more worries in future than what might be envisioned now. The 1.8 billion people will hold a key to how fashion succeeds or does not a decade from now. These people will be living in those parts of the developing world where water is scare and cotton being the basic raw material for fashion industry would tend to be scarce as well. There will be constrains in the raw material supply. At that point of time world might be more worried about feeding the growing population that draping them in fashionable accessories. There would be stricter regulations on waste water treatment, water usage and its use on industry as a fashion. Since each country or a region would be vying for its share, anything related to fashion might become political in nature. Since all industry’s need energy to run, that might pose another problem to the fashion industry. Global energy demands are bound to rise, particularly in China and India, and if International Energy Agency is to be cited, energy needs in 2030 would be 40 percent higher than what they are now. To translate this into statistics, the energy costs would rise, living costs would rise too, and that might have fashion industry to bear the brunt. It might be difficult for this industry to maintain itself with respect to pressures as these, unless, of course, it opts for some sustainable ways and methods. Only time will decide as to what sustainable steps would be needed then (WTO, 2005). This is not to exclude the oil prices, which will have unimaginable effect on apparel industry, supply chain and more importantly cost of polyester. This is because polyester is an oil industry-by-product. There would be a ripple effect across all processes – printing, finishing, dying and more. Impact of globalisation There is no doubt that globalisation has had a great impact on fashion industry. The global consumer patterns have permeated deep into global; retailer and customer bases. Luxury global brands like Louis Vuitton, Prada and Michael Kors have become local in almost all continents, mainly Asia (Bhardwaj & Fairhurst, 2010; Johansson, 2010; Joy, Sherry, Venkatesh, Wang & Chan, 2012). This is because this continent has been witnessing rapid economic growth in the recent past. Cross-cultural consumption is working wonders on the products in particular and industry as a whole (Cvetkovich, 1997). Global retailers are doing a wonderful job by adopting strategies that are based on cultural branding (Daye et al., 2008). This trend is continuing and is likely to continue for a long period to come; as globalisation expands further, these trends are bound to expand more. Global retailers do and will thrive on studying consumer behaviours in different region and more often than not it has been found that Asia has emerged as one of the leading consumers of international brands. Milan, New York, and Paris have started making inroads into uptown cities in the Asian region. That means if fashion industry in New York is to be defined in terms of its uniqueness, the same can as well be found in its brands spread over big and small outlets across different regions throughout the world. The fashion landscape is changing (Flanagan, 2003) . And one silver line that can be felt is that since most of the Asian region is developing, the fashion industry can ride the bandwagon of development for the next many years. Asia is likely to be the key; the US doesn't seem to be, since it is dogged by its own problem of unemployment and outsourcing to a cheaper destinations, one of which is again Asia (Wassener, 2011). Technological intervention Technology has done to fashion industry what globalisation has. It has increased the inventory, speed, strength and sensibility of the industry. The turnaround is fast-paced since the production is automated. Now technology holds key to almost everything else in the industry - design, innovation, development, style, discovery of new fabric and much more. Even printing is so rapid that experts hardly need a huge time lag between concept and implementation. There is improvement at every net level. The industry can now boast of fire retardant garments and sweat-wicking clothing, not to speak of 'super suits' - like the ones NASA uses. Today's fashion industry rests on the pivot of fast turnaround and innovative design and the way the trend is growing, it can safely be said that this is going to have a profound impact on the industry's future (Chesbrough and Rosenbloom, 2002). Competitive environment Fashion industry is all about glamour, changing trends, creativity and high concentrations. But it must be construed that the industry is not fragmented - it is. All jostle for some space in this industry - apparel designers, distributors, manufacturers, licensors, importers, retailers, and even customers (Bhardwaj and Fairhurst, 2010). The nature and level of competition varies from company to company and market to market. There are certain markets that would warrant quick and successive changes in their processes, thinking and manufacture. In what is foreseeable, the fashion industry is expected to evolve rapidly in the next decade or two, despite the odds, as outlined above, that it might have to encounter on the way. Given the way world is digitizing itself, it will not be out of place to mention here that innovation will be a key to every rapid or slow evolution the industry might take place in the near future. Innovation will be first step towards having a competitive advantage (Bruce et al, 2004). Conclusion With regard to the future of fashion industry within or outside of America, one thing emerges very clearly. Future as on date has emerged as a global phenomenon that sans boundaries and a decade or more later there will be multiple factors working up on the industry to determine its current standing then. References Afuah, A., & Tucci, C. L. (2000). Internet business models and strategies: Text and cases. New York: McGraw-Hill Higher Education. Bruce, M., Daly, L. & Towers, N. (2004). 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