The fashion industry is in a state of flux, with manufacturers, distributors, and retailers all facing significant changes. Consumers are becoming more aware of ethical and environmental concerns, and are demanding that brands become more sustainable. New technologies are emerging, prompting transformation across the industry. The pandemic has accelerated these changes, forcing companies to quickly adapt their supply chain strategy. In 2023, top brands are looking to make their supply chains more efficient and resilient to withstand any future disruptions. Three key trends are emerging as part of a new supply chain strategy, with major players in the apparel industry investing heavily in digitization, sustainability, and localized production to boost their operations and increase efficiency across the board.
One significant trend is the increasing use of digital technologies in the industry. According to McKinsey, investment in apparel technology grew by 66% in 2021, compared to 2019, a trend that will likely continue to grow in 2023. The investment is aimed at improving operations and providing valuable information to stakeholders. For example, Ralph Lauren has adopted RFID technology to track inventory and reduce waste, while Burberry has invested in augmented reality to create innovative digital shopping experiences. Top executives in the apparel industry continue to look at new areas of the supply chain to optimize with technology.
One such area that brands can improve would be their color management process. ColordesQ can be a game changer when it comes to speed, planning, cost-control, and sustainability. Businesses can also use QUONDA to digitize quality inspections.
Sustainability is also becoming important as part of the supply chain strategy. Consumers are increasingly demanding that companies prioritize environmental and social responsibility, and governments are introducing new regulations to encourage sustainability practices. For example, Adidas has pledged to use only recycled polyester in all of its products by 2024, while Levi’s has committed to reducing its water wastage by 50% by 2025. Stella McCartney, a pioneer in sustainable fashion, has launched a range of products made from Mylo, a mushroom-based leather alternative, and is actively promoting circular fashion through its rental and repair services.
Finally, the pandemic has led many fashion brands to consider nearshoring (moving production closer to the home country) and reshoring (moving production back to the home country) to reduce supply chain risks and increase agility. Due to the pandemic, brands realized their over-reliance on Chinese manufacturing, and as a result started to explore other options, including localized production. Companies are moving production closer to their customers to improve delivery times and gain more control over their operations. For example, Zara has opened a highly automated factory in Spain to produce customizable clothing, while Uniqlo has shifted production from China to Vietnam to reduce costs and improve supply chain resilience. These are not isolated examples, one report shows that in 2022 Chinese apparel manufacturing has slowed down significantly, with top brands favoring Vietnam, Malayasia and Bangladesh as viable alternatives. Part of the new supply chain strategy is to diversify manufacturing hubs to make sure that if there is a disruption in one area, operations do not stop completely.
The fashion industry is experiencing unprecedented change, with digitization, sustainability and localized production emerging as key trends that will influence the sector in the future. Brands that adapt to these changes are well-positioned to succeed in the years ahead, while those that fail to prioritize sustainability, technology, and agility may struggle to remain competitive.