1. WE
9 KEY QUESTIONS
FOR THE FASHION
INDUSTRY
DON’T
M ORE NEED
CLOTHES
BY ÁLVARO GONZÁLEZ-ALORDA @agalorda

2. Before
I
present
these
slides
to
students,
I
would
/agalorda
like
to
know
your
@agalorda
opinion.
Join
the
conversation!

3. GLOBAL UNCERTAINTY
SUPPLY CHAIN CONSTRAINTS
CONSUMER SHOPPING MOOD
A NEW OPPORTUNITY
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4. The
world
has
become
an
extremely
fast-­‐moving
place.

5. The
global
economy
is
struggling.

6. The
slowdown
in
Europe
is
here
to
stay
(for
a
while).

7. We’ve
got
a
situation…
and
it’s
entirely
unpredictable.
Where
will
demand
come
from?
#1

8. This
global
recession
has
and
will
continue
to
reduce
sales.

9. In
the
short
run,
the
luxury
customer
is
the
most
reliable
spender.
Should
brands
focus
on
them?
#2

10. GLOBAL UNCERTAINTY
SUPPLY CHAIN CONSTRAINTS
CONSUMER SHOPPING MOOD
A NEW OPPORTUNITY
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11. The
spike
in
cost
of
utilities
will
erode
the
margins
of
companies
that
rely
heavily
on
electricity.

12. Pricing
volatility
of
raw
materials
make
suppliers
and
buyers
very
cautious.
Speed
to
market
is
at
risk.

13. Despite
their
economic
slowdown,
wages
are
rising…

14. …putting
the
cost
advantage
of
manufacturing
in
China
at
stake.

15. Should
brands
pass
on
the
cost
increases
to
their
customers
in
a
recessionary
environment?
#3

16. Finding
new
factories
is
hard
as
it
has
ever
been,
given
the
lack
of
manufacturing
skills..

17. Sourcing
from
alternative
Asian
countries
might
be
an
option.
But
infrastructures
are
not
so
efPicient.
BANGLADESH
INDIA
VIETNAM
CAMBODIA
SRI LANKA
INDONESIA

18. Some
domestic
producers
are
shifting
towards
supply
to
the
domestic
market
in
China.

19.
By
2015,
it
might
be
just
as
cheap
to
make
things
in
the
US
as
to
make
them
in
China
and
ship
them
back.

20. #4

21. Levering
internationally
the
“High
Street”
model
is
not
the
most
effective
cost
strategy
to
compete…

22. …with
the
growth
of
the
ecommerce,
which
demands
high-­‐level
service
for
delivery
and
returns.

23. Margins
are
diminishing
due
to
a
growing
demand
for
lower
prices.

24. Are
some
long
successful
fashion
business
models
#5
heading
for
the
cliff?

25. GLOBAL UNCERNTAINTY
SUPPLY CHAIN CONSTRAINTS
CONSUMER SHOPPING MOOD
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26. We
will
have
been
controlling
our
buying
impulses
for
so
long
that…

27. …by
the
“end”
of
the
crisis,
our
approach
to
fashion
will
be
more
rational.

28. What
used
to
be
considered
as
a
celebration,
nowadays
may
be
regarded
as
plain
obscenity...

29. …given
the
current
unemploy-­‐
ment
rates
and
the
growing
number
of
struggling
families.

30. In
this
context,
one
wonders:
Do
I
really
need
60
pairs
of
shoes?
#6

31. The
new
shopping
mood
is
creating
new
habits.
Fashion
won’t
be
so
‘right-­‐side’
in
our
brain.
f
f

32. Sewing
your
own
clothes
might
start
to
be
‘cool’.

33. And
clothing
exchange
could
be
the
next
disruption.

34. Besides,
our
closets
can
barely
store
the
insane
amount
of
clothes
we’ve
bought
in
the
pre-­‐crisis
years.

35. And
despite
marketing
efforts
to
reactivate
consumption,
we
know…

36. …we
don’t
need
more
clothes.
Do
we?
#7

37. However,
brands
try
to
fascinate
us
with
repetitive
expensive
formulas,

38. THE SARTORIALIST
while
our
attention
moves
towards
new
low-­‐budget
fashion
phenomena.

39. GLOBAL UNCERNTAINTY
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40. A
new
middle
class
is
growing
in
the
emerging
markets:
2
billion
people
expending
$6,9
trillion
annually.

41. And
they
live
in
a
dozen
emerging
nations,
not
only
in
the
fast-­‐growing
BRIC
countries.

42. These
new
spenders
offer
an
opportunity
for
early
winners
to
gain
lasting
advantages.

43. But
multinational
companies
face
challenging
competition
from
local
players
with
growing
market
share.

44. Should
brands
replicate
business
models
designed
for
developed
countries
in
the
emerging
ones?
Or…
#8

45. …meeting
the
needs
of
these
new
consumers
requires
#9
a
different
course?

46. GLOBAL UNCERNTAINTY
SUPPLY CHAIN CONSTRAINTS
CONSUMER SHOPPING MOOD
A NEW OPPORTUNITY
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47. Join
the
conversation
at:
/fashionopenclass
/agalorda
@agalorda