LA Fashion Industry Contends with Technology-Driven Change
Technological trends ranging from social media evolution to value-chain integration are continuing to ripple through the Los Angeles fashion scene, driving ongoing business adjustments in a hotly competitive marketplace.
Those are among the findings of the latest industry survey conducted by the California Fashion Association and CIT Group Inc. (NYSE: CIT), a leading provider of accounts receivable factoring and lending services to the apparel industry.
“This research highlights the role that technology is playing in transforming the fashion industry,” said Darrin Beer, Western Regional Manager for CIT’s Commercial Services unit. “The findings confirm the role of social media in shaping consumer tastes and emphasize the importance of remaining alert and nimble in responding to market changes.”
“The fashion industry remains one of the most important economic engines in LA and Orange counties,” said Ilse Metchek, president of the California Fashion Association. “We were pleased to work with CIT to support research on the emerging trends that are so important to this vital industry.”
The report highlights many facets of technological advancement as the sources of current and future fashion industry business trends.
For example, LA-area industry executives are much more likely than they were just two years ago to say a multichannel distribution strategy – one that combines brick-and-mortar stores with online sales – is their biggest opportunity. They are also more than twice as likely to say they’ll change their business model to make better profits in 2018 and 2019.
Half of fashion executives surveyed cited social media as a key to the industry’s future. Celebrities remain influential as fashion taste-makers via social media platforms such as Instagram, the study reported.
Other key findings include:
- The industry remains under price pressure, forcing executives to search for better and cheaper sourcing. And because the market changes so rapidly, speed-to-market is crucial. Forty five percent of survey respondents said changing the business model will make their business more profitable in the next two years.
- The industry continues to evolve with new technology driving the charge. For example, integrated systems between manufacturing and retailing picked up steam in our latest survey. Survey respondents also highlighted the development of virtual sales tools, which help retailers sell products to consumers.
- In a digital era, new celebrities are on the rise, including bloggers and YouTube stars. Access to celebrities was up to 13 percent in our survey versus 2 percent in 2015. Manufacturers are developing new ways to market product via social media in this highly competitive industry. Their social media push is done mainly in-house, with Instagram dominating.
For a summary of the LA Fashion Report, visit www.cit.com/fashion.
Founded in 1908, CIT (NYSE: CIT) is a financial holding company with approximately $50 billion in assets as of June 30, 2018. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has approximately $30 billion of deposits and more than $40 billion of assets. CIT provides financing, leasing, and advisory services principally to middle-market companies and small businesses across a wide variety of industries. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A. For more information, visit cit.com and follow us on Twitter, LinkedIn, YouTube and Facebook.