The State of Fashion 2023 report from McKinsey and The Business of Fashion has just been released. It is quite a sobering read overall, but definitely worth a look! As I did last year, here is my rundown of the main takeaways when viewing the 2023 report through a trade mark lens:
- Overall it looks like it will be a difficult year ahead for the fashion sector with inflation, the war in Ukraine, supply chain issues and the energy crisis all playing a role. Whilst global sales in the fashion sector are likely to shrink by 2-3% in 2023, sales in the luxury fashion sector are tipped to be more robust with potential growth of 5-10%.
- There are expected to be clear regional differences in performance within the sector. Whilst Europe is expected to struggle in 2023, the US market is tipped to be more robust, with 61% of executives expecting the same or better conditions in 2023 as 2022. The report also indicates that the Middle East fashion market is likely to grow in 2023, along with parts of Asia Pacific, with many respondents planning to increase their operations in these areas in 2023. If these do become higher priority territories, fashion brands will need to review, put in place or bolster trade mark protection for these markets. The Middle East traditionally has been expensive across the board when it comes to trade mark protection, but things are starting to move in the right direction. The UAE is now a party to the Madrid System and the Saudi Arabian Registry reduced their official fees earlier in the year, which will certainly help. However planning your trade mark protection strategically in this area is still very important to make the most of your trade mark budget.
- In a post-pandemic world, casualisation is expected to continue as a key trend, with casualwear and sportswear still being touted as areas for continuing growth. However 40% of those surveyed also expected occasion wear to be one of their top three growth areas for 2023, but not necessarily through the usual channels. The report suggests that we will see consumers turning to statement-making outfits for those special occasions in 2023, with rental playing a larger role. Will we see a rise of trade mark filings by fashion brands in class 45 to cover “rental of clothing” in the coming year?
- It is not just rental that brands look set to explore in 2023, the report suggests that fashion brands will be increasingly looking at the “3 Rs – resale, rental and repair”, so we may also see an increase in class 37 trade mark applications too.
- Sustainability continues to be a key theme in the report this year, as the top identified opportunity for the fashion industry in 2023. The challenge for brands being getting the sustainability message across without greenwashing. Brands need to find a way to communicate their green credentials by showing that they are making meaningful change, whilst still meeting regulatory requirements. In 2022, we saw the Competition and Markets Authority launch an investigation into ASOS, Boohoo and George at Asda over their eco-friendly and sustainability claims, with the CMA saying that they would consider whether to look into additional companies too. We are also seeing an increasing number of trade mark filings for brand names and logos intended for use on sustainable ranges or to generally support brands in communicating their green credentials to their customers and we expect this to continue.
- We are likely to see innovation in the digital marketing strategies of fashion brands in 2023, with a potential move away from paid social media ads, and a focus on using retail media networks and the metaverse to build a strong brand community. We are already seeing increasing use of NFTs in customer loyalty programmes and this is likely to continue. Like last year, we are expecting NFTs to become even more common place in trade mark specifications in 2023.
The full report is available as a PDF: The State of Fashion 2023