The Fashion Reboot, organized annually by the Institut Français de la Mode (IFM), brings together experts on various topics such as inflation, purchasing power and the mass market vs. luxury industry. Relatively new words are being introduced into the fashion vocabulary – such as decoupling, shein, framing effect, curation, artificial intelligence, traceability, fashion politics – which can reveal perspectives for 2024.
“The worst may not be behind us” – this phrase, uttered by Gildas Minvielle, director of the IFM Economic Observatory, at the Fashion Reboot 2023 event, echoed throughout the day in a lecture hall filled with professionals at the end of 2023 were in a rather subdued mood. The economic situation is difficult, which the speakers kept repeating, citing various reasons for this.
Alain Frachon, a columnist for the newspaper Le Monde, and Denis Ferrand, general director of the market research institute Rexecode, reported on the erosion of the Chinese market. “Without social security and family solidarity due to the one-child policy, Chinese people are more likely to save than buy. In addition, China’s real estate sector is collapsing as the goal is to recover national industrial assets. On the other side of the globe, Americans continue to consume but are investing in their production facilities to anticipate the energy transition and the arrival of artificial intelligence in work processes.”
“Fortunately, new markets like Indonesia or Mexico are emerging,” says Ferrand, and perhaps French companies should look in this direction in their international development.
“Decoupling” or the reduction of French consumption
Compared to the previously mentioned countries, France is in a “decoupling phase”. This word, often repeated by the speakers, has several meanings, but here it can be understood to mean that France has a different attitude: it saves rather than consumes. Conversely, the country’s companies have invested and hired staff in 2023, implying that their liquidity may be strained in 2024.
This frugality of the French market is reinforced by price inflation, which, according to Ferrand, the author of the study, will not stop. This applies in view of the inflation-driving factors of the energy transition and the persistently high interest rates. Inflation is expected to be around 1 percent at the end of 2024.
Inflation puts clothing at the forefront of budget cuts
Minvielle then makes his traditional socio-economic assessment (which Fashionunited will return to when the opportunity arises). The main results of surveys in the sector predict that the clothing market will reach a total value of 27 billion euros (excluding accessories) in 2023, with sales volumes falling by 4 percent compared to 2022.
With prices rising 4 percent in 2023 (versus 6 percent in 2022), 73.7 percent of respondents said inflation had changed their shopping behavior. In fact, buying clothes or shoes takes a back seat to cafes/restaurants, household goods and leisure activities. After a boom during austerity policies due to the Covid crisis, online sales also experienced a setback, falling by 7.1 percent, but are still above the 2019 level (+6 percent).
In this context, Minvielle asks the question about the impact of the ultra-fast fashion newcomers, starting with Shein (a frequently mentioned brand), Lidl and Temu. Yann Rivoallan, President of the Fédération du Prêt-À-Porter Féminin (Federation of Prêt-À-Porter Women’s Fashion), addressed the issue and called for a radical solution.
To counterbalance this somewhat bleak finding, Minvielle points to an encouraging perspective: French fashion exports are up 11 percent per year from 2020 to 2023. Contrary to what you might think, only a third of exports come from the luxury sector.
What options are there to motivate hesitant consumers?
Thomas Delattre, professor and head of the IFM’s Fashion Entrepreneurship Center, then gave young entrepreneurs their say through his film, which was shown in the lecture hall. This is intended to pave the way to new creative focal points.
What is the challenge? Compensating for the mass market offering with something different. In other words: adapting to the reality of purchasing power. The professor points to three paths: new technologies such as artificial intelligence, targeted communication and a multidisciplinary offering with fair pricing and attractive styles.
Delattre points out the importance of the framing effect that fast fashion industry players use: it is a cognitive bias that causes us to respond to messages or decisions presented to us depending on the nature and The way they are presented to us reacts differently. As an example, he cited the fact that consumers are more likely to buy a sweater with 25 percent cashmere than the same sweater with 75 percent polyamide.
The key word to curb the irrationality of purchasing behavior is “curation,” that is, selecting and highlighting what is on offer, according to Léa Germano of clothing rental company Studio Paillette and Timothée Richard, founder of Choose, a data-driven application for timely sales. This new generation is reinventing customer advice digitally.
The temptation to diversify is quickly dismissed by Anouck Duranteau-Loeper, CEO of Isabel Marant: “It could be a marketing coup, for example, to go into furniture.”
Artificial intelligence and ecological transition: the pillars of transformation for 2024
“We had NFT, then the Metaverse, this year it’s artificial intelligence, is there a new fashion trend?” asks moderator Lucas Delattre, professor at the IFM, legitimately. “No,” replies Grégory Boutté, Kering’s director of digital and customer relations, and explains his arguments: AI enables personalization between sales staff and customers and the specification of purchases.
On the business side, it would make the way projects are carried out more efficient by predicting how items will sell in order to be able to produce accordingly (at least those that are produced new each season). According to the digital expert, AI is above all a rationalization tool that does not replace the creative teams, but rather promotes “test and learn” instead of “wait and see”.
Will this new technology help the fashion industry achieve the mandatory energy transition? Possibly yes. The Oritain software is able to assess the traceability of a fabric, even if it consists of multiple fibers. This process, which relies on physical testing, is more streamlined than declaration-based certifications that “companies trust too much,” said Michela Mossali, Oritain’s business development manager.
Traceability also applies to the French leather industry, which must go beyond the constraints of general agricultural policy to enable the production of first-class products while respecting animal welfare regulations.
Isabelle Guichot, General Director of the SMCP (FashionUnited will have the opportunity to elaborate), gave a first overview of the day in seven lessons, which was about “rethinking the fashion industry”. She then handed the microphone to Olivia Grégoire, Deputy Minister of Small and Medium Enterprises, Trade, Crafts and Tourism. Your speech, which sounds like a sketch of a fashion policy for 2024, is up [FashionUnited.fr](https://fashionunited.fr/actualite/business/fashion-reboot-2023-olivia-gregoire-annonce-l-ebauche-d-une-politique-publique-de-la-mode/2023120133692).
This article originally appeared on FashionUnited.fr. Translated and edited by Simone Preuss.