Welcome back to The Interline Podcast. I’ve got a bit of a pointed end of year question for you: do you feel like you know where the world’s headed? Because I think I’m less sure about that than I’ve ever been. I mean, I can give you my stick-a-finger-in-the-air-and-gauge-which-way-the-wind’s-blowing perspective. And in my role, I talk to more brands and suppliers and analysts than the average person.
But I’d be lying if I said I had any real certainty about what 2026, 2027, 2028, 2029 or 2030 were going to look like at a whole industry level. So today I wanted to bring on someone whose job it is to do exactly that kind of micro and macro forecasting specifically for fashion. Marguerite Le Rolland is the Global Insight Manager for Fashion at market research giant Euromonitor.
And I chatted to her around the time the company released its latest set of competitor strategies in apparel and footwear reports, which used to be annual publications, but which they now revisit within the year, which should give you an indication of the kind of unpredictability and reactivity we’re talking about here.
I wanted to ask Marguerite some sweeping industry questions about market growth, sourcing strategies, changing consumers, and so on. I wanted to ask her some specific questions about technology’s role in dealing with those things. And I also wanted to ask some annoyingly philosophical questions about forecasting as a whole in the kind of macroeconomic environment we live in. So here we go.
NB. The transcript below has been lightly edited.
Okay, Marguerite Le Rolland, welcome to The Interline Podcast.
Thank you for having me. It’s a pleasure to be here.
It’s a really good time of year to be doing this. So let’s start with an overview of the periodic research that Euromonitor puts together covering apparel and footwear. Tell us, how long have you been doing these reports and the remit of them, what you’re covering, the analysis that you’re putting together, has that changed over the years?
Sure, thank you. We’ve been researching variant footwear for 15 years at Euromonitor International.
And yes, as the industry evolved, we’ve had to change the way we approach our research and the scope of what we cover. For example, with the ongoing athleisure transformation of the industry, we’ve had to really increase our efforts to better capture the sportswear segment. And that’s something we’ve been doing. And now we’ll be looking at the latest evolution, talking also about everything that is about smart technology into clothing and what it means for our definition. So, yes, it’s constantly evolving.
So fashion, I think like a lot of industries, has been working with the assumption or the axiom that growth in consumption markets is all but guaranteed. Now, according to your analysis, it seems like growth is either slowing or flattening in key regions like Europe and China, but it’s accelerating in Latin America, India, where you have brands pursuing new presences in different markets and in other regions that we used to class as emerging markets.
What’s behind the divergent outlook between those different markets? And what does this sort of shift in the composition of growth – when it comes to global fashion opportunities – mean for brands that are currently really reliant on selling to consumers in the US or Europe, for instance?
I think there are a number of factors here. Thank you for asking. I think, first of all, the largest markets for apparel and footwear remain the US and China by far. The US share in global sales of apparel and footwear in 2025 is around 24% of the total value, that of China about 20%. So these are very mature markets and very large. So they are headed for flatter growth because of some economic challenges that are happening there. Nonetheless, in terms of absolute value growth, they remain key markets and that we know brands are not abandoning these markets, they’re just changing their strategy. And because of the current market uncertainty and really all the disruptions we’ve seen since the COVID-19 pandemic, the very high inflation, tariffs now, companies are really thinking more in terms of diversification strategy to mitigate their risks.
Also, they’re looking for new pockets of growth and emerging markets really present key opportunities in terms of growth prospects. So we see markets like India, but also Indonesia, some markets in Latin America and the Middle East really becoming top of mind for international expansion by various companies.
Do you think those mature markets, do you think there is a timeline or trajectory for them to go back to growth? Or is the bulk of growth destined to come from those new and emerging markets that you’re talking about? Where should brands that have presences in big mature markets, but also have growth ambitions and growth strategies, be focusing their attention? Should they be thinking that growth will come back in those mature markets? Or should they be prioritising those pockets that you talked about?
I think they should be able to do both, to be honest. I think, ideally, if they have the financial muscle and the capacity to extend their international presence, then they should try to have a good presence in the emerging markets as well as consolidate their presence in developed economies and developed mature markets.
What we’re seeing, for example, is brands that are already strong in the US, China, Europe, they’re looking for new demographic groups they can target. I’m thinking, for example, of the luxury brands that are more after the baby boomers. For example, we’ve seen a lot more focus on these demographics by Miu Miu, Burberry, LVMH. But we’re also seeing in the broader fashion industry, new stores like MangoTeen or Inditex expand their lefties concept, which is really tapping into the opportunity with the young Gen Z and Gen Alpha, the teenagers pocket money.
So we’re seeing that in the developed economies and at the same time in the emerging economies, the macroeconomic and demographic factors are really different. So we see a lot of organic growth just because the younger population continues to grow and continues to have rising disposable income. So there is an appetite there for more branded goods, more fashion goods, and the international companies really need to tailor their strategies to these different market realities, but ideally tap into both opportunities for growth because what we’ve learnt in the last few years is, if you are too dependent on one region or one market, then there can be unprecedented disruption and then you’re really struggling to survive or build resilience.
Yeah. And when you think about those emerging markets as well, you mentioned the organic stuff is there. There’s a cohort of people with disposable income who are the target market for brands that have presences in more mature markets and are targeting these emerging ones. How big a factor do you think digital maturity and digital readiness is in the sort of growth pockets that you talked about?
I’m thinking digital maturity from a consumer’s perspective. How ready people are to shop in different digital-first ways and digital maturity from a brand point of view. How ready companies are to reach digital-native shoppers through social channels, how successfully they’ve done their own digital transformation. Because it seems like the explosive nature of some of these growth pockets hinges on there being a very digitally savvy consumer and a very connected consumer, a very connected market straight away, rather than that being something that brands have had to grow into and that mature markets have had to grow into. Kind of like a leapfrog opportunity.
Yeah, that’s right. I think in general, I would say the majority of the e-commerce infrastructure in these emerging economies is quite good, actually. A lot of the younger cohort of the population is really tech savvy. So it’s really important for these brands that want to grow their sales in these markets to have a good digital presence. I think what we’ve seen is because the reality of the market is quite different from their domestic market, it’s also good to go through a partner. So we see, for example, a lot of brands working with Mercado Libre in Latin America, but also going through Myntra in India, or different, you know, established e-tailers that already have a clear solution and a good reach out among the population they want to target.
So that’s what we see. But looking at the numbers, of course, there is some more potential for growth and some variations from markets to markets. We see, for example, in Indonesia, according to our estimates, only about 17% of sales of apparel and footwear is online. When in more mature markets, very mature markets like the US or China, the share of online is already around 40% in these markets. It’s really important for brands to be online, to choose whether to do their own thing or partner with the right established retailers who will have the infrastructure in place. And also, however, to have a physical presence because what we see is for those products that are new to the market, it’s important that the consumers can choose to have the high touch experience and see the product, try it. And what we see a lot of now is how this international expansion has started to pop up in special events to really boost interest in the product, and the brands and young consumers answer really well to these kinds of activation.
Okay. And we looked at regions then. Normally it’s not really productive, from a predictions point of view, to look at one particular brand or one particular company. I think where that’s different is when we think about the ultra-fast fashion giants – Shein and Temu – if there’s one business model that seems to be unique. seems to stand alone. It seems to be fairly well insulated from a lot of the current market challenges. It’s the one practiced by Shein and Temu. Right now, I know we’re seeing different countries or different blocks in the case of the European Union trying to rein those companies in through policy. But according to your figures, Shein’s parent company, Roadget, saw year over year growth of close to 20% – I think 19% last year – which is far ahead of the average.
What’s the outlook for that model? Do you expect other brands and retailers to continue trying to push back against the tide of ultra fast fashion? Or do you think the affordability crisis, fairly present in a lot of mature markets, means that ultra fast value-centric businesses are actually kind of setting the tone for the mass market?
Very good question. I think, yes, you’re right. We see contradictory forces here. We see on the one hand, a big group of consumers that are facing this affordability crisis and we go for the low prices. And this has been driving the growth of Shein, Temu and other platforms until now. What we’re seeing, though, is that the impact of the US regulation changes is already tangible for Shein just because the diminutive exemption was banned in the US, meaning now their parcels are being subject to import duties when they come into the US and the fact that there are higher tariffs from Chinese-made goods coming into the US, instead of having Shein still growing double digit in 2025 globally, we are more around 10%. And the main reason is because, in most markets, Shenzhen is still growing double digit, but in the US, the growth has stalled because of these measures. and as you said, in the EU, there are a number of measures that are being taken as well.
At the same time, there was a lot of controversy because Shein actually opened its first permanent location in Paris in an iconic department store, the BHV. And some consumers were really keen, some others were really against it, including some of the store staff. And it’s been a very controversial move. So we see all these controversies and all these contradictions around ultra fast fashion. At the same time, I think we’re seeing
established market players trying to answer to the demand created by Shein. So, I mentioned quickly the Mango Teen concept or Inditex Lefties. We’re also seeing Amazon Bazaar launched especially in Latin America. So we’re seeing retailers and brands offering or developing a special sub-brand targeted for Gen Z and based on value and affordability.
I guess I don’t have the answer to your question, but we’re seeing a lot of movements and strategy changes shaped by the success of Shein and Temu. It’s something that we’re watching closely.
Yeah, same from our side. And I think where we tend to land is clearly ultra fast fashion is a damaging model from an environmental point of view and so on. However, there’s very clearly a market demand for it. And it’s hard to judge a company too harshly for catering to a market demand. So I think you’re right in that what we’re likely to see is other companies developing strategies that are designed to capitalise on the fact that, for a variety of reasons, people want affordable fashion in high velocity, high volume. That is a demand that the industry is going to need to find a way to cater to because it’s something that consumers clearly do want.
Exactly, and to a certain extent, I think we’ve seen a huge surge in resale and secondhand and it’s less damaging for the planet, but it’s also answering these new market demands, especially among younger consumers that want to renew their wardrobe often and it’s less about ownership than access really. It’s about having the right item for the right occasion and reselling it or not necessarily owning it for the rest of their lives like previous generations used to do with their wardrobe items. So it’s very interesting to see how things will unfold in the next few years.
Very much so. As somebody who is, as I am, in my 40s, my oldest child will be 12 in 2026. Younger people have a very, very different attitude to fashion and to shopping and to generally acquiring things and what it means to own things than my generation does. That’s been fascinating for me to see as an individual. It’ll be interesting to see how that plays out at market level as well.
Exactly. And we are seeing interesting developments. I’m sure you’ve heard, for example, in the US, there is this new startup and app created by Bill Gates’ daughter and another co-founder, Phia. And it’s basically a bit of an Opodo for the fashion industry really comparing – it’s a search engine that allows users to compare and find items across resell platforms as well as the primary market online and compare the different price options, shipping options, design and so on.
You know, that’s going to be interesting to watch as well. I’m sure the younger generations will love this search engine and that will really change the way they approach primary versus secondary market and even push more for access versus ownership in my opinion, because it’s all going to be really about a fluid and flowing market rather than owning items in your wardrobe.
Yeah, interesting. ‘Fluid’ is a good way to put it. I like that. Now, we’re a tech publication for the fashion industry, but we try not to be kind of blyth tech evangelists. We do tend to believe that technology is going to be one of the key levers that brands, retailers will need to pull in order to deal with some of the challenges we’ve talked about, and see some of the opportunities we’ve talked about. But we also recognise that the relationship between doing well in whatever market segment, whatever region you choose to target, and investing in technology and digital infrastructure is a hard one to reconcile when you as a brand are trying to push back against a lot of different headwinds the way they are today. It’s not an easy macroeconomic environment.
According to your data, with growth being at its lowest since the depths of the pandemic, brands wanting to recapture it – whether it’s through expansion into different markets, whether it’s through different channels, whether it’s through some of the resale stuff or the platforms that we’ve talked about – it requires companies to invest. It’s a difficult time, but the ask is for companies to sink potentially significant amounts of operational expenditure, CapEx, into tools and technologies that might get them a competitive advantage, but that might also just get them to baseline competitive.
How should our listeners be thinking about that equation? They want to succeed and thrive, which everybody does, but success and thriving means investing in technology. How do you justify that? How do you square that?
Yeah, that’s a hard equation, as you said, because the market environment is challenging. But I do think people who do not invest in their technology backbone will be left behind. So it’s really an investment for resilience, for agility. And to be relevant today and tomorrow. We know the way things are heading. We just mentioned how younger generations have a different approach to technology, to shopping. And so it’s definitely critical to have this infrastructure backbone to be able to reach out to these demographics and deliver what they want when they need it. And potentially in the future, we’ll see also, with AI – all these agents developing and potentially doing some shopping for the users and brands need to understand this and invest and maybe because times are hard prioritise what they want to do or a couple of markets where they really see a lot of potential or certain apps or technology that are really suitable for the core segment they’re trying to reach. I think that it’s about maybe prioritising the markets, the demographic segments etc., but it’s definitely a must and not a ‘good to have’ to invest in technology.
Ben Hanson (19:09)
We see it that way as well. One of the ways to kind of get ahead of some of the challenges that we’ve talked about, and this comes up in your data, is the need for brands and retailers to basically reach consumers wherever they are and everywhere they are. Which in practice, means understanding the scope and the limits of existing channels for engaging with consumers.
Also, it means capitalising on new channels, so social commerce and other ways to add new touch points with shoppers, which can be digital first or digital only, or which can be done in, you know, in store and in physical retail. An example that you pull out in the research is Zara’s Travel Mode – tell me a little bit more about that. But the aim is consistent, I think, across that and others, which is brands and retailers want and need consumers to spend more time engaging with them in scenarios where maybe they haven’t before in non-traditional touch points. How do you see this playing out over the next four to five years, between now and 2030?
I think it’s going to become increasingly relevant. The Zara Travel Mode is really interesting because, as you said, it’s quite an untraditional way to engage with the audience. It’s basically on the Zara app. You now have this content that is like a travel guide about certain cities around the world. Cities in Italy, in Japan, coming in the UK and France soon as well. Interesting because it’s not about directly selling their products to the users. It’s about giving them tips about the best restaurants, the best museum, the things to see in the cities they’re visiting. And it’s very clever because it’s creating content that the users will enjoy while of course having this option to order something from Zara and get it delivered at their hotel while they’re in these cities. But that means basically it’s a new way of building loyalty without forcing a sale.
And at the same time, our research shows that consumers are more willing to spend while they’re on holiday. They are increasingly wanting to spend on experiences, and that also means saving some budget for a nice holiday rather than buying a lot of new items for their wardrobe. So this way, by launching the Travel Mode in the app, Zara capitalises on consumers’ appetite to spend on their holidays. At the same time, they bring some free content that is relevant and will help elevate the brand positioning and their engagement with the users. So that’s an interesting development.
We’re also seeing Selfridges, for example, have applied for a license to open a private members club. And that’s an interesting way to further that engagement offline. And we see, you know, obviously Selfridges is a very reputed retailer and now moving to a third space where they leverage this reputation to open another type of community driven service. And that’s really going to also feed their loyalty for their shops, for their stores and other venues. So we see a lot of interesting developments into what we said, the third space of retail and engagement. And we see more and more of this. It’s fascinating because there’s lots of innovation and interesting ideas.
It is and it’s innovation in the wild sort of sense, not in the point of progressively iteratively better technology or incremental improvements to margins or what have you. It’s innovation in the purely, let’s show up in a completely different way and in a fundamental, let’s engage the consumer in a fundamentally different way. It’s genuine market innovation there.
Exactly. So it’s really interesting. I guess every company is under pressure to find the next new big idea, but that keeps everyone on their toes. And for consumers, it’s great to see so many things happen and so many different services and products being launched that are surprising in a good way.
Well, you want to talk about the next big idea. There’s an elephant in the room, I think, when we talk about engaging consumers and shopping channels and touch points, and that’s AI. So as a publisher here at The Interline, we’re observing just how quickly the web is changing, how quickly search and discovery and content is changing. But we also know from our conversations with brands that the shift is even more pronounced for fashion and beauty companies that sell online when you think about what is influencing the path to purchase, what intermediaries exist on the journey from finding out about a brand, finding out about the product, and then the final transaction. What do you see happening with generative AI over the next few years in that sense, both in terms of how the big apps like ChatGPT could start to swallow even more of the consumer journey, but also in the sense of the ways that brands and retailers can deploy generative AI to their advantage through the channels that they already own?
Very good question. Thank you. From a consumer’s perspective, we see how they are really more accepting of technology in their daily life. Yes, some consumers remain a bit worried about privacy and so on. But generally speaking, what our research shows with our voice of the consumer surveys is nowadays, almost 30% of the global respondents said they want to leverage an AI for better product recommendations, better chatbot interactions, and have a more personal assistance from the brands they buy and the retailers they buy from. So they see how this can simplify their life and make their shopping more efficient. And from the brands’ and retailers’ perspective, they see these attitudes changing. They see an opportunity here and with AI, also in the back end that can help them optimise some operations, but also make sure they can target people with more suitable recommendations based on their past purchases, based on their other research.
One pain point I’ve heard a lot of is how consumers don’t like being spammed or being sent the wrong recommendation or being sent the right recommendation, however, the item is out of stock. That’s very frustrating. You can create a really negative impression. So I think as technology evolves, this will not happen anymore because the technology will allow to recommend not only the products that are suitable for the user, but are available and can be delivered quickly and depending on certain criteria it will be more and more accurate recommendations including for availability, stock and so on.
Yeah, and I think the accuracy bit is really important there, the personalisation side of things, because your data suggests that there’s a lot of variation in consumer sentiment, spending power and so on across different age groups, social strata, the different levels of the market. It’s all very kind of non-normalised. So you have older shoppers, 65 and upwards, who have consolidated wealth that they’re willing to spend. And then you have younger people, as we’ve already talked about, struggling with an affordability crisis who are budgeting as a matter of course and leaning towards value first brands. We have 53% of people according to your data who bought secondhand clothing. There’s no clear lines there. There’s a lot of pockets of behaviour and then there’s a lot of crossover and blurring between those things as well.
With so many different variables at play, if I’m a brand and I’m thinking about how to target my consumer at that kind of individualised, personalised, hypersegmented level, how should I go about that? What’s the outlook for me being able to do that kind of either really granular segmentation or personalisation?
I guess what you need to do is, again, identify first the core target audience or segment you’re after and then try to understand the patterns. But I think you’re completely right. There’s a lot of crossover and maybe contradictions within the same consumer. Sometimes consumers want to buy online, especially when it’s a repeat purchase. Sometimes they don’t know what they want to buy, they go to the store for inspiration. I think what will be important for brands in future leveraging AI is to allow consumers to get these wide availability of options and to have the right recommendations coming to them.
I think there is this growing awareness, obviously, that the same person might want to shop online one day and go to the store another time, depending on what they buy. And I think that’s what AI will allow more of because it can scale people’s preferences, but also better understand and track their behaviour and their paths to purchase, and better predict as well. AI will be massive in better predict demand. I’m really hopeful this can help simplify the shopping journey, but also address some other issues such as the waste that the industry is generating because of this better understanding of their consumer groups.
That’s a really good point, which you don’t actually hear people talk about that often, which is that fashion produces a lot of waste. There’s a huge amount of overproduction because targeting is very broad. Those two things are tied into one another. There’s so much guesswork in terms of what the market wants and what the market can sustain that if you replace that guesswork with specific data and you replace it with this kind of hyper segmentation, it has bigger benefits than just improving full price sell through, for instance.
I think so as well. I think it will be more efficient. It will help save margins and reduce waste because there won’t be any more of these huge quantities of clothing that are being produced but not being sold because nobody really wanted them. There was no demand for it. I think as the quantity of data we collect and the accuracy of analysis we can do improves, these issues should be addressed in future.
Okay, cool. Now we talked a lot about the consumer side of stuff. Let’s just shift gears as we get towards the end here and talk about the production and sourcing side of things. If we flash back to the global distribution of growth where we talked about a lot of what you rightly pointed out as kind of emerging markets, pockets of opportunities and so on. I think the same is true when we look at the diversification of sourcing and production because fashion’s operated for a long time on a pretty predictable structure for things sold in mature markets, mature consumption markets, and they are made in mature production markets. But on top of the growth and consumer demand moving, which we’ve already talked about, your data shows that production is diffusing as well. And there’s a much more diverse spread of different regions building out their manufacturing capacity, sourcing capacity. What do you think is the outlook there for kind of strategic sourcing strategies for fashion brands?
I think you’re completely right. We see a lot of movement also in the supply chains and the way the regulation is evolving also is pushing maybe for more regional supply chains and, from just a risk management and risk mitigation point of view, companies see the benefits of having shorter supply chains. Some cost of production for shorter supply chains might be offset by the greater control you have on these operations. So what we’re seeing already is how since the COVID-19 pandemic and the growing tensions between the US and China already in the first Trump mandate, we’ve seen some movements of production for the textile industry outside of China moving to other production hubs in Southeast Asia like Bangladesh, Pakistan, India. But also we see more regional hubs emerging. Latin America, for example, is benefiting from new investments since the uncertainty created by the tariff situation. In Europe, we see more interest in Turkey.
I guess the only other point I wanted to make is we see some diffusion, but it’s been incremental because we are talking about a huge amount of investments and also the companies, the textile industry need infrastructure. So what we are seeing is it can be a combined effort by governments and private companies.
And that’s what we’re seeing in Latin America or in different markets in Asia, in Turkey. And we will see a lot more with the current uncertainty, we see a lot more encouragement by governments for this to happen because they take measures to protect their markets against Chinese imports.
We’re also seeing, for example, Shein was allowed to return to India. They had been banned there for a few years on the grounds of national security concerns. The government of India re-allowed Shein in the market, but on the premises, I think 60% of jeans products sold in India would be produced in India. And so we see a more of an alignment between the supply chain hub and the end markets. And production also in India will suffer other neighbouring markets. But I think we will see this happening more. And regional supply chain for different product tracks as well.
I think Mango is already doing that. They have twin tracks where they will produce some items that are timeless and part of the core collection in Asia, far away from their end market in the US or Europe. But then they’re also developing shorter tracks for items that are more trendy and where time to market is critical. So they have such hubs in, you know, North Africa and Turkey to better serve Europe quickly. And they have similar hubs in Mexico and Brazil to better serve the US and Latin market. So that can be a good compromise.
Yeah, and that’s what we’ve historically referred to as blended sourcing, which is driven by product need and market need and then with a sourcing strategy that aligns specifically with it. I think the other lever that brands have available to them to pull when it comes to sourcing and production is actual kind of manufacturing innovation, is actual transformation at the hardware and process level. Things like on-demand printing, both, you know, direct to fabric, direct to garment. 3D printing in particular is something that your data points to this time around. Tell me a little bit more, just a tiny bit more on what you see as the technology edge when we think about this sort of diversification and this kind of maybe shoring up of domestic supply chains as well.
I think the big thing would be to manage the reverse sourcing where what’s wasted on sold stock can be turned back into new items. That’s really a concept at this stage. But I think that’s something that more and more companies are trying to explore and that would really be a huge game changer for what we’re able to manufacture and where. What we’re seeing at the moment is 3D printers and AI systems, to rethink manufacturing to allow more local production. But at the moment, I feel like these 3D printers are not scalable yet. We see that in the footwear industry in particular, more than the clothing industry, because at the moment there are limitations of what kind of material you can print, what designs you can make and so on. So the 3D printer and AI driven experiments are interesting.
It could be the beginning of a game-changing innovation, but for now it’s still quite niche and there are lots of technical limitations to it.
Yeah, it’s something that occupies a pretty small part of a blended sourcing strategy. But like you said, it has the potential to be transformative. If you can do on-demand production, if you can do on-demand print, if you can do 3D, you know, additive manufacturing in-country, and you can do it at scale or you can do it at an appropriate scale for a particular product line or a collection or style, then fine. That does represent a transformative thing, but it’s something that will scale up over time.
Penultimate question for you, Marguerite, is when we think about that kind of blended sourcing strategy and complex supply chains with things coming from multiple different places, that almost creates its own challenge when we think about the trend towards supply chain transparency, due diligence, disclosure, and specifically how those things are supposed to be packaged up in digital product passports. It feels like all of that, that kind of mandate to be open and transparent about everything that goes into a product, its journey around the world, wherever that might be. It feels like that’s been pretty inevitable for a while. Everybody’s been working off the assumption that the industry trajectory is towards more transparency. Then it seems like some of the environmental and ethical legislation has actually ended up being softened prior to implementation and adoption.
Do you think the trajectory is still towards transparency? Is that what the data shows? Should brands still be investing in processing technology on the assumption that they will need to know and disclose more about their supply chains? Or do you think the regulations are kind of being walked back a bit there?
I think some of the regulation has softened, you’re right. However, I think there has already been some significant investments made into better traceability and transparency. Companies are seeing value in that. They better understand their supply chain. They can identify inefficiencies, correct them. So it’s not been an investment just to comply with the regulation. It’s been an investment they see value in. And I think from a consumer standpoint as well, because of the adoption of GNI and the emergence of certain applications, there is a growing expectation to be able to have transparency at their fingertips. There is a growing expectation from a number of consumers to know more about the items they are buying and how they are made and where.
I think even if the regulation is softened, it says that there is an interest for companies and consumers towards greater transparency. In fact, what we’ve seen, for example, is the digital product passport will be a legal requirement in the European Union, but in the US, the retailer Target has rolled out kind of a digital passport a few months ago, not because they had to legally, but because they saw an opportunity here to better engage with the consumers and leveraging that technology for the digital product passport and offering transparency, they’re actually also supplementing their advice to consumers to complete the look, to know more about the item they’re buying, and it connects to Poshmark as well to offer some items that can supplement the item they’re buying with some second-hand finds as well. So that’s an interesting way to make the most of the technology and not only do it for legal reasons, but also because they see a way to improve the engagement, ultimately boost sales and foster loyalty by adopting this technology.
Okay, finally, let’s talk just for a second about forecasting itself and prediction because I think it’s become a bit of a cliche for everybody to say that we’re living through a time of peak unpredictability – that doesn’t make it any less true. It does feel like year over year, it’s becoming harder and harder to have any stability and any certainty about what’s around the corner.
How has that affected the way that you build your own long-term forecasts at Euromonitor and how should brands be thinking about this? Should we be saying, we just plan for not knowing what’s going to happen? Or should we actually be trying to make predictions based on concrete outcomes? Do we think that the second one is still viable in this set of circumstances that we’re living through?
Yeah, very good question. I think the more uncertain that it used to be at Euromonitor, we actually used to publish our research on an annual basis before COVID-19 pandemic. And we’ve had to obviously increase the frequency at which we review our data and our forecasts. So now we’re reviewing throughout the year. We’re reviewing that our forecast did make sense. Do we need to update certain trajectories in certain markets because something happened differently than what we anticipated three or six months ago. So this has definitely changed the way we do our research.
We’re also leveraging more AI-driven tools to build our data sets in a more efficient way to make sure we use our external and internal sources in a more, you know, optimised way. And I guess the last but not least change we’ve made to our approach to forecasting is we work with different scenarios. We work really closely with our team of econometricians, the economies and consumers team. They do have a framework where they forecast GDP growth, inflation rates, and so on, on a quarterly basis, and they have developed different scenarios. For example, we have a scenario called the Total Trump Agenda. And so if all the measures suggested by the Trump administration and tariffs were going through, what would be the impact on the GDP in the US, but also China, Mexico, global GDP growth, etc. So I think now with our clients as well, we work on a scenario-based analysis as opposed to only one kind of scenario. We still have a baseline scenario, which is a scenario we think is the most likely to happen, obviously, but we work more on the scenario-based analysis than we used to.
I think reactivity is the key there. You know, being able to come and look back at predictions and test and validate and challenge those on a more regular basis than you would have done otherwise. I think that feels like the lesson for fashion to take away from this.
Yes, exactly. As we say as well and as we see, in terms of crises and challenges, still so much creativity and innovation happening that it’s a fascinating time to research this industry, really. We see so much has transformed since the COVID-19 pandemic and so much is still happening today that is really interesting and by nature we knew the fashion industry was creative but we really see that at so many levels across the supply chain. It’s fascinating.
Well, thanks for taking the time to walk us through the latest edition of the research here. I’m keen to see how all of this plays out myself over the coming years. I know you’re going to be watching all of that closely. Maybe we can have you back on the show at some point in the future and see if we can revisit some of these things, look at some new predictions and so on. But for now, Marguerite, it’s been a fascinating conversation. Thank you for joining me.
Thank you for having me. It’s been a pleasure.
Well, I hope you found some certainty in my conversation with Marguerite, or at least some comfort in the idea of planning for the unpredictable and that kind of unpredictability being the baseline for the future. There’s still a lot of runway left in the second season of the Interline Podcast, so stay tuned for our next show and I’ll talk to you again soon.