NYCEDC’s new Fashion.NYC.2020 report investigates New York City’s fashion industry, which has long been core to the City’s economy.
In January 2010, Mayor Bloomberg kicked off the Fashion.NYC.2020 program to better understand the current strengths and weaknesses of the City’s fashion industry, the trends that will impact the industry over the next 10+ years, and the actions the City can take to bolster the industry’s strengths—and address its weaknesses—in light of these trends.
Led by five industry chairs—Richard Darling, CEO of LF USA; Diane von Furstenberg, Chairman and Founder of Diane von Furstenberg Studio L.P. and President of the Council of Fashion Designers of America; Terry Lundgren, Chairman, President and CEO of Macy’s, Inc.; Andrew Rosen, CEO of Theory; and Kevin Ryan, CEO of Gilt Groupe—and conducted in partnership with Bain & Company, the Fashion.NYC.2020 effort has involved research, surveys, and interviews with more than 500 industry professionals, including CEOs of leading fashion companies. Here’s a glimpse of what we learned.
Where are we?
NYC is the preeminent global fashion capital, serving as the headquarters to more than 900 fashion companies adn host to one fo four major Fashion Weeks, a biannual event that draws well over 200,000 attendees each year. It is also the hub of fashion design, boasting several of the world's top fashion design schools. Fashion manufacturing represents 31% of all manufacturing jobs in NYC, and NYC's wholesale market accounts for 27% of the U.S. wholesale market. NYC's fashion retail market is the country's largest, generating over $15 billion in sales annually.
Where are we going?
The major trends impacting the industry are as follows:
- Spend polarization: Consumers are spending at high and low price points while reducing spend at mid-tier price points.
- Growth in emerging markets: The market for fashion is growing in emerging markets, particularly in the BRIC countries, all of which have displayed a strong demand for foreign brands.
- Rise of contemporary brands: Contemporary brands, including teen fashion and premium denim labels, have been expanding rapidly. This shift favors LA, where many contemporary brands are based.
- Demand for on-trend and in-season merchandise: Consumers are increasingly adopting a "buy now, wear now" mentality, though according to the current fashion calendar, merchandise is typically sold ahead of each season. This accounts for the explosive growth of fast-fashion retailers, with growth outpacing that of specialty retial stores.
- Growth of vertical brand strategies: Vertically-integrated retailers can create products in short cycle times, expediting the delivery of designs from the runway to stores. Wholesalers and department stores are increasingly adopting vertical brand strategies to meet consumer demand for on-trend and in-season product.
- Appealing to online and mobile customers: More and more, consumers are researching products and making purchases online. Online sales growth is projected to be approximately 10% annually, while overall fashion retail sales are projected to grow 2% annually.
- Rise of new media and social networks: Fashion trends are now covered on easily-accessible new media outlets and shared on social networks, necessitating innovative and diverse marketing strategies.
- Consumer centricity: Consumers are providing more input into the design process, with designers adopting crowdsourced collections, and shoppers customizing their purchases in a variety of ways.
- Sustainability: Designers are increasingly interested in developing, and consumers in purchasing, merchandise that is produced sustainably.
How do we get there?
Based on the above, NYCEDC has recommended and is in the process of implementing six Fashion.NYC.2020 fashion industry initiatives. Find out more by downloading the full report.