For an outsider, the fashion retail business may look like a world filled with glitz and glam, beautiful collaborations, and endless means of self-expression. Of course, part of that is true. However, the closer you get into the fashion industry the more you see the extensive amount of work that is behind the beautiful exterior.
Before production, supply chain management, store layout design, and actual sales of a fashion product, brands must predict what will be on-trend in the coming season. Typically, this involves guesswork and reliance on previous performance. Unfortunately, with everything changing at the speed of light and the pandemic stirring up new behaviors - fashion brands face an unprecedented challenge with forecasting trends.
Sticking to old ways isn’t an option anymore. Moreover, with the global apparel market size projected to reach $2.25 trillion by 2025, fashion brands are now looking for ways to forecast trends with the highest accuracy to maximize revenue and minimize waste.
Today, we want to discuss the different approaches to fashion trend forecasting and help you understand why data plays such an integral role in the decision-making process. By the end of this article, you’ll be able to pick a trend predicting method that will help your brand outperform the competition in 2022.
Fashion Forecasting Based On Historical Data
Until recently, brands relied largely on historical data to predict future sales performance and upcoming trends. Brand managers would look at the following factors to determine which items would be in high demand:
Past sales data
Studies of customer behavior
Market trend monitoring
All this was before social media, influencers, and smartphone domination. Moreover, as you can imagine, the pandemic has created an additional challenge for retailers. Specifically, historical data has become much less reliable since customers stayed at home for the majority of last year. In fact, European retail sales of clothing products dropped 43.5% last year, causing industry players to accumulate overstock and create sales offers to get rid of excess inventory.
Fashion Forecasting Based On Market Trends
Now that you know how retailers forecast demand based on historical data, it’s time to look at how predictions can be improved by leveraging market trends. Overall, there are 5 main market trend monitoring approaches that help brands forecast fashion trends for 2022. We’ll cover each one in more detail below.
1. Pioneer Brands
One of the most straightforward ways of monitoring market trends is by looking at pioneers. Luxury brands tend to dictate trends, not follow them. Thus, if you look at what the top fashion houses are doing for the coming year, you might be able to identify a pattern and determine in which direction to take your production.
Unfortunately, this is usually a manual process and can become quite time-consuming. Leading fashion brands usually reveal their upcoming collections around the same time. So, a merchandiser is likely going to spend a lot of time analyzing every reveal.
2. Influencer Monitoring
Next up, you can also turn to influencer monitoring. It’s no secret that influencers are followed for inspiration and are often labeled “opinion leaders” thanks to the different ways they present fashion items.
Thus, to forecast what will be trending in 2022, you might want to take a look at a list of the top influencers in your area and who have a demographic similar to yours. You’ll be sure to find insights that could help you direct your vision for the coming year.
3. Google Trends
Another way of discovering market trends involves looking at the Google Trends application. Simply input a term that you’d like to check out or a broader topic that you want to monitor and view how it has performed in terms of Google’s search volume.
For example, as you can see below, the leopard print has experienced a boost in popularity at the end of 2019. However, it has since dwindled down.
4. Facebook Ads Library
If you’re interested in seeing what your competitors are up to, an excellent resource is the Facebook Ads Library. Simply type the name of a brand that’s similar to yours or one that you look up to and you’ll see which items they are advertising.
Of course, this resource does more than tell you which pieces of clothing your rivals are eager to sell. It also serves as evidence of what might be on-trend. For instance, if Bershka is placing a lot of ad dollars on crop tops, chances are they’ve seen proof that suggests crop tops will be in demand soon.
5. Data Reliance
Finally, we’ve reached the last approach of market trend monitoring. Unlike the previous ways, data reliance doesn’t have to involve too much manual work. Instead, you can let innovative technologies do all the time-consuming tasks.
Data reliance involves leveraging external data, combining it with historical information, and letting AI & ML algorithms identify patterns that are likely to prevail. The truth is, using external data for demand forecasting can be game-changing for forward-thinking retailers. Primarily, due to the following benefits it can bring:
Under- and overstock elimination
Are You Ready To Obtain Accurate Fashion Trend Forecasts For 2022?
You now know that there are multiple approaches to forecast fashion trends for 2022, but none are quite as impressive as relying on data.
At GFAIVE, we understand how uncertain the fashion industry is. Especially now, after the pandemic has shuttered historical data and left retailers guessing how new items will perform. Thus, GFAIVE solutions always leverage external data in their predictions, helping brand managers identify the perfect product mix, inventory levels, and future sales.
Our AI SaaS platform creates precise sales forecasts for the brand’s new items for next season’s collections by fusing historical data with relevant for particular brand trends and external factors. So, don’t hesitate to contact us if you’ve got a project you’d like to discuss. Our team is always happy to help.