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Top fashion and home furnishings business trends to watch in 2019

What’s ahead for manufacturers, designers, wholesalers, distributors


After an even better holiday season than the previous year, the outlook for 2019 is positive for the fashion and home furnishings sector. However, there are a variety of issues and trends to consider as well. Middle market manufacturers, designers, wholesalers and distributors in the apparel and home furnishings sectors will face headwinds from regulatory and trade changes as well as today’s tight labor market. There are also opportunities to innovate as consumer preferences continue to shift and a new generation joins the consumer ranks.

Ethical and sustainable fashion

The way consumers view fashion and home furnishings products is changing. They not only care if they like a product, but they care if it makes a difference in the world they live in. Is the item good for the environment? Was it sourced and manufactured ethically? In fact, the number of consumers who place sustainability as a major factor in their fashion choices has risen to nearly 60 percent, a marked change from previous decades. Ethical and sustainable fashion is not a gimmick, but speaks to a company’s brand as well as the beliefs of its leaders. Consumers want to shop brands that make them feel good and share their values. In 2019, successful brands will effectively communicate their brand’s values to consumers. Further, brands that make their consumers feel good also boost their own employee engagement and loyalty as these employees feel pride in the ethical company they work for and the products they make. Selling and promoting ethically manufactured and sustainable products is helping to attract and retain talent in what will continue to be a very tight labor market in the year ahead.

Consumer engagement

It’s become clear that technology is pervasive in consumer buying decisions and consumers have become increasingly comfortable buying through channels other than in-store. However, purchases are happening across all channels. Physical and digital retail will continue to merge in 2019 and successful companies will provide the same shopping experience whether it is online, or in-store.

Companies should learn from disruptors such as Amazon, as it is changing the way consumers shop for fashion. Smart brands will leverage technology to create a personalized experience through a two-way conversation with the consumers who purchase, blog and otherwise take an interest in the brands they like. For example, companies will continue to use emerging technologies like artificial intelligence to enable their websites to be more personalized and predictive, and data analytics to provide management with essential tools to move the business forward. They will suggest products for individual customers, and, of course, connect with their consumers through Instagram, Snapchat and other forms of social media. There will be an increased use of augmented reality, so consumers can see how that jacket will look on them or how that sofa will fit in their living room.

Demographic shifts

Beyond millennials, companies must pay attention to the Generation Z (Gen Z) consumer in the year ahead. These new consumers value experiences over things, casual and relaxed over formal, and inclusivity over exclusivity. Understanding what, when and how they buy will be important as they become a major customer segment for fashion brands. In 2019, smart companies will focus on engaging with this demographic and will be mindful of the importance of bloggers and social media influencers, as Gen Zers are inclined to be swayed by opinions from their peers as opposed to models in magazines.

Security and privacy

As companies become more reliant on technology, data security risks and privacy vulnerabilities continue to grow. Intellectual property such as proprietary designs, employee information, customer data and more provide a valuable source of information for cybercriminals. Further, for brands that have their own stores, as card-not-present transactions grow, so does the risk of fraud. Brands that sell goods in and exchange data with European Union members must also be in compliance with the General Data Protection Regulation (GDPR). Failure to comply with this new regulation could mean significant financial penalties. Understanding the emerging challenges and proactively planning for these risks and threats will continue to be a challenge for many companies.

Regulatory, trade and tax issues

2018 began with the passing of tax reform, but the remainder of the year has been all about trade and tariff tensions. While continued consumer confidence will help maintain top-line sales, the fashion and home furnishings sector will need to heighten its focus on managing costs in 2019. Tax reform brought multiple changes applicable to foreign earnings and income of foreign affiliates. Companies that operate in several countries must be familiar with the taxes and other regulations of each country they do business in, as well as value-added tax and customs and duty regulations.

Uncertainty with respect to tariffs will play a significant role in the survival of many companies that import from China. Many believe they will be able to absorb an additional 10 percent cost increase if the trade spat expands to apparel, footwear and additional home furnishings, especially if the cost can be shared with their Chinese suppliers. However, a potential increase to 25 percent may be too much for some companies to shoulder and could further strengthen those disruptors and leading edge companies as they continue to use artificial intelligence and data to help drive sales and reduce costs.

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