How to recover from the impasse triggered off by the global healthcare emergency? The virtual edition of IFF tackled this difficult question by bringing together 25 associations from 24 countries across the globe this past 2 February, with the contribution of two high-level speakers, Denis Redonnet, Deputy Director-General and Chief Trade Enforcement Officer at DG Trade in the European Commission, and Achim Berg, Senior Partner & Global Leader at McKinsey Apparel, Fashion and Luxury Group.
The debate opened up with the following question: where can the footwear industry find new inspiration to survive and progress in this new reality generated by the pandemic?” The pathways highlighted by the speakers are two: not giving in to the temptation of protectionism, and focusing on digital strategies and sustainability as drivers for growth.
“Protectionist measures, – declared Luis Onofre, President of CEC – often implemented to defend national industries from economic crisis, make businesses less competitive in the mid to long-term”. This is why, according to Denis Redonnet “Engaging with global partners to ensure a level-playing field and supporting an open trade system based on rules is the best possible policy stand today”. However, he warns, “trade will play a big role in the recovery, but only if its approach and the agreements upholding it are modernised and better tailored to the new reality”.
A new reality that is not simple for the fashion industry: devasted by the crisis, with economic profits down 93% in 2020, today the industry must face long-lasting and volatile changes in consumer demand, consumer behaviour, and retail models. This is what emerges in the McKinsey report, “The State of Fashion 2020” presented by Achim Berg. “The playbook to succeed has changed for good – he declared – Because the crisis has disrupted the fashion supply chain, from sourcing to store economics”. Yet, not all is lost: new opportunities have been created thanks to digital and e-commerce, and sustainability is becoming economically attractive and competitive. “Fashion executives must respond quickly and mindfully to managing risks. Decisions made today will shape the future for industry players”, concludes Berg.
The question at this point is what should the footwear industry do? The answer of IFF is that companies need to understand the opportunities of digitalisation and sustainable business models and proactively look for public funding to make the necessary investments. Change must be embraced in order to make the most of the opportunities for development offered up by it.