Apparel – comprising mass-market fashion and sportswear but excluding the luxury market – led all sectors in 2014 in terms of growth by overall brand value.
At 29%, this growth was higher than technology or cars, which both saw 2014 growth of 16%, as well as of food and drink, global banks, telecoms and oil and gas, according to the communications company WPP.
In the build-up to ITMA 2015 in Milan in November, this is extremely good news for manufacturers of textiles and clothing, especially coming on top of a 21% growth figure for the Apparel sector in 2013.
The time for investing in the latest manufacturing technologies and for assessing potential expansion plans couldn’t be better and ITMA 2015 will be the definitive showcase for demonstrating what’s possible in textile and garment manufacturing today.
An essential element to the reputation of all apparel brands in 2015, of course, is sustainability. The brands have been responsible for a top-down push to ensure their suppliers are as efficient as is possible with natural resources, and the clear winners are those investing in manufacturing technologies that put the emphasis on substantial savings in energy, water and raw materials.
In addition to technologies, there will be lots of information at ITMA 2015 from the fibre and raw materials suppliers on the specific products and process routes that are enabling textiles and garments to become ever more sustainable.
All of these things, of course, reflect right back on the reputation of the brands.
According to WPP’s ‘Brandz’ report, brand contribution is a metric that quantifies the strength of a brand exclusively, without financial or other elements. To determine it, WPP analyses relevant corporate financial data and strips away everything that doesn’t pertain to the branded business. To solidify its methodology, it then conducts in-depth consumer research with more than 170,000 consumers across 30 countries annually to assess attitudes to over 10,000 brands. WPP’s database includes information from over two million consumers.
Style and durability
As far as the Apparel sector is concerned, WPP observes that consumers are now investing in fashion plus function and favouring a combination of style with durability that is allowing mid-priced brands – informed by high-end fashion – to prosper.
Post-recession savvy consumers are also said to be delaying purchases at the beginning of new seasons and waiting to buy on sale. As a consequence, merchants are launching their sales earlier and deepening discounts as time passes, adjusting prices rationally in order to encourage purchasing while protecting margins.
Uniqlo is a good example of a brand that has built up a global presence on the promise of delivering apparel staples that are fashionable, functional and affordable. The Japanese-headquartered company now has 1,300 stores in Asia, North America and Europe, and with 2014 sales of US$7.3 billion, saw its brand value rocket by 58% last year.
The slower pace of economic expansion in what have until recently been fast growing markets such as China, however, has had something of a restraining effect. Combined with increasing international competition, rising labour and raw materials costs and excess inventories, this has hurt some business results and brand values.
These markets, however, and in particular China, are now leading the field in the use of e-commerce and social media and as they drive an expansion of choice, the established brands are having to work harder to cultivate loyalty.
It is technology which is now enabling them to tailor their communications for diverse audiences and geographic locations.
Nike, for example, has been exploiting social media to promote a culture of activity and achievement, succeeding in building communities of both consumer and brand advocates around this idea and in so doing, equipping itself with an extremely positive image.
“We live in a digital world and our consumers expect Nike to be as digitally connected as they are,” says President and CEO Mark Parker. “Digital’s potential is enormous. It is changing how we conduct our business, tell our stories and engage consumers. It’s a rapidly changing landscape and a big part of our future.”
Nike saw its brand value grow by 55% in 2014, to just under US$24.6 billion.
Adidas meanwhile benefited from the momentum gained by its sponsorship of the London 2012 Olympic Games and then capitalised on its subsequent sponsorship of the 2014 FIFA World Cup in Brazil to grow its brand value by 47%, with a value of $7.2 billion.
Other main winners in the WPP Brandz list included Next, with an increase of 39%, Hugo Boss up 28%, H&M up 22%, Zara up 15% and Ralph Lauren up 13%. Tommy Hilfiger also entered the Top Ten for the first time and only Lululemon saw a fall of 13% in its brand valuation.
Combined, the brand value of these leading ten apparel companies in 2014 was just under US$1 billion and without a doubt they will be taking a keen interest in the sustainable technologies and materials showcased at ITMA 2015.