The State of FASHION 2022: GAINS, Pains, CIRCULARITY, and the Metaverse

If you look at fashion as a big corporate machine, well this is the report that comes out every year to forecast what the corporate industry will be up to in the coming year.  The sixth report produced by BoF and McKinsey & Company’s The State of Fashion 2022 forecasts a year of recovery, challenge, and change; although “uncertainty”, as expressed in the 2021 report, still lingers in the minds of the 222 international fashion executives and experts surveyed.

Amid the pain from COVID-19: business casualties and consolidations, supply chain disruptions, set-backs, and on-going travel-restrictions, some sectors of the industry are rebounding, much quicker than expected.  The global luxury market stands out.  No surprise.  This was a wealth building, “revenge spending” time for those of means. The report estimates 2021 luxury market sales 5-15% ahead of 2019 (pre-COVID), and projected to increase 15-25% 2022 compared to 2019. China exploded with domestic spending on luxury goods locally, as spend previously allocated abroad was repatriated to China.  Compared to 2019, China’s luxury market was up 60% 2020, and projected to increase 70-90%, 90-110%, 2021, 2022 respectively.  In contrast, luxury markets in the US and Europe dropped in 2021, with the U.S. set to reach +5-10% in 2022.  The non-luxury market 2020, 2021 was much more dismal globally with the exception of the U.S.; estimated 2021 results are up 5-10% compared to 2019.

Despite widespread operational disruptions, and a more cautious economic recovery in Europe, the pandemic has done little to slow down the megatrends reshaping the industry.  In fact, these have accelerated over the past year, with industry leaders making bold moves in digital, taking action on environmental and social priorities and focusing more sharply on diversity, equity and inclusion in response.

Digital and sustainability are seen as fashion’s biggest opportunities for growth; 32% of the respondents ranked digital as a top priority, while 12% ranked sustainability as a top priority.  What does this mean?  Let’s take a look at these megatrends.

Each year the report covers 10 megatrends or themes in depth. 2022 the themes are within the headings of Global Economy, Consumer Shifts, and Fashion System.  I will highlight the themes that matter to a creative and responsible future.

Within Consumer Shifts, Metaverse Mindset is on the radar and rightfully so.  We need to pay attention to Metaverse Fashion (MF) which has been seeded in the gaming industry for some time now.   The Report summarizes: As consumers spend more time online and the hype around the metaverse continues to cascade into virtual goods, fashion leaders will unlock new ways of engaging with high value younger cohorts.  To capture untapped value streams, players should explore the potential of non-fungible tokens, gaming and virtual fashion — all of which offer fresh routes to creativity, community-building and commerce.  81% of Gen-Z played video games in the past six months, averaging 7.3 hours per week.

Digital fashion may be more than what it seems or what we can imagine beyond what we know today, with a compelling creative business platform. Virtual simulation is emerging as we speak, where the technology is racing for best efficiencies; plus the social and cultural aspects are at play.  Think about this: the value of virtual fashion versus traditional ‘ownership’ fashion; or is there room for both; or will MF moves us to dematerialization – the path to sustainable fashion?

Sustainable. Within the category, Fashion System, Circular Textiles is a newcomer of themes. Over the years, sustainable fashion has not been on the priority list of these major players, until the last couple of years, however, even this year, the response is rather lukewarm.  Here’s what’s notable: the content has shifted to “circularity”, and “closed-loop recycling”.

Since the EDGE Fashion Intelligence platform provides data, stats, reports, resources, interviews, news, and dialogue regarding a circular fashion system, here is what the Report summarizes: One of the most important levers that the fashion industry can pull to reduce its environmental impact is closed-loop recycling, a system which is now starting to be rolled out at scale, promising to limit the extractive production of virgin raw materials and decrease textile waste. As these technologies mature, companies will need to embed them into the design phase of product development while adopting large scale collection and sorting processes. 60% of fashion executives have already invested or plan to invest in closed-loop recycling next year.

Let’s hold the industry accountable for this one, along with the renewed commitments out of COP26, the UN’s 26th Climate Change Conference, which took place in Glasgow, UK in October and November 2021.  It is time that these words “to be rolled out at scale, promising to limit the extractive production of virgin raw materials and decrease textile waste” and “need to embed them into the design phase of product development while adopting large scale collection and sorting processes” are on paper, at least.  These structural shifts will matter.

The 144 page Report is very informative with data, charts, graphs, an excellent reference – a window into the world of 2021 fashion industry with a comprehensive outlook for 2022.

The State of Fashion 2022 full report, pdf.

Feature image:  photo, @manonceartist, courtesy of Sayoko Kojima, designer, New York, whose design practice is part of a circular fashion system.  She reimagines unwanted garments rescued from the streets of Brooklyn.  Her story will publish 24 January 2022.


Rhonda P. Hill

Founder, Publishing Editor