Fashion is a business that has long been seen as the be-all and end-all, but the style sector may need to find a new way forward.
Fertility rates around the world have fallen dramatically in recent decades - many generations are having fewer children - and are expected to fall below replacement levels before 2050, resulting in a decline in the world's population.
More from WWDThe long-term consequences for fashion are enormous.
As the world transitions to a place with fewer people, retail will face a battle for market share, an increasing international push and other changes that could reshape the industry in unforeseen ways.
Martin Lindstrom, a consultant who specializes in business transformation and branding, said brands need to return to their roots and produce styles that last and that consumers want to invest in, while also reducing their environmental impact.
"Fashion needs to move from a cost to an investment," Lindstrom said. "And if they don't succeed soon - it's such a sensitive industry now - I don't think the fashion houses can keep it alive."
In many ways, the sector is ill-suited to deal with this shift. Not only is a shrinking population a major and pervasive problem, it's also one that today's CEOs and boards of directors may prefer to ignore. Historically, humans have been bad at planning for remote and complicated problems. See: climate change.
And right now, brands are pursuing growth at all levels. Billion-dollar brands are often not content to stay that way: they want to expand to $3 billion or $5 billion. Even flat sales equate to failure in the eyes of Wall Street.
A steady state is not something that fashion or business is generally good at. It hasn't been necessary yet.
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According to the United Nations, the world population has grown explosively since the 1950s from 2.5 billion to more than 8 billion today.
Above all, growing a business required the ability to ride that wave and attract more customers. But soon the wave will reach the shore.
Researchers raised a warning flag last month in the medical journal The Lancet, noting that global fertility rates have fallen from 4.84 percent in 1950 to 2.23 percent in 2021 - just above the 2.1 percent needed to keep the population stable hold.
By 2050, the fertility rate is expected to fall to 1.83 percent, with the lowest-income countries accounting for an increasing percentage of births. "We have broadly found that human civilization is rapidly converging towards a reality of persistently low fertility," the researchers said in Lancet.
The effect will be widespread.
"Low fertility levels may over time result in inverted population pyramids with a growing number of elderly people and a declining working-age population," the researchers said. "These changes are likely to place an increasing burden on healthcare and social systems, transform labor and consumer markets and alter patterns of resource use."
The population growth that fueled the rise of the modern economy is slowing and will likely end in the coming decades. Business leaders need to think about how to train the next generation of leaders to be agile enough to handle that change.
It's difficult to look ahead. The fashion world was thinking hard about e-commerce and the Internet in the early 2000s, but didn't anticipate the invention of the iPhone or social media, which turned business plans upside down.
Still, the industry muddled through and came out bigger on the other side. There will be a path from here to the future, even if there will ultimately be an epic battle as brands face the dwindling supply of consumers in high-income countries.
And many of the things that matter today will continue to matter.
Brands and how they make people feel will matter. It will be important to be able to forge a personal connection with consumers. And like everything else over the last twenty years, digital will matter too.
"Fashion is not about keeping you warm, not 'I wear clothes to keep myself warm,'" Lindstrom said. "It's to protect an image. It is to perform a transformation to another universe. It aims to create a sense of connection with like-minded people. It is to build on my sense of ambition. All these factors can in principle be replicated virtually."
Although the metaverse has fallen out of fashion, or at least out of the glowing spotlight in the industry, Lindstrom said, "We'll probably very soon find the code for how you actually enter the virtual world, where this is more is just a stupid square avatar jumping around."
If a move into the metaverse or a scenario where "investment" fashion outpaces costs or fast-fashion seems like a leap, the good news is that fashion is actually pretty good at making these kinds of moves, especially when it gives them a can take you a step further. a time.
New York's fashion manufacturers moved from Seventh Avenue to South Carolina, from Mexico to China, just as brands moved online and advertising moved from the printed page to social media.
These changes all caused major disruptions, but the fashion endured.
"The market is going to adapt, I think people are going to adapt," says consultant Jonathan Low, a partner at Predictiv who specializes in the impact of intangibles such as strategy execution.
"Do you remember walking down Madison Avenue on a weekday and every man was wearing a blue or gray suit with a nice shirt and tie," Low said. "Now you see people wearing Lululemon pants and padded vests and shoes that look like they were invented in another solar system. That's a pretty fundamental change.
"Thanks to the internet and mobile communications, there is a global fashion market," he says. "People are going to do what they have to do to achieve it. And conversely, the marketers will say, "Okay, I'll sell it wherever I can sell it."
Still, brands - at least those that make IRL fashion - will likely find that there are fewer and fewer places to sell as the world becomes smaller and smaller.
To win, players must now organize their thoughts about the problem.
The Bottom Line is a business analysis column written by Evan Clark, deputy editor, who has been covering the fashion industry since 2000. The column appears every other Thursday. The best of WWD
