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The Ten Key Trends to Watch for the Apparel Industry in 2022

As I nurse my New Year's Eve hangover, I am preoccupied with two issues. One, when will my head stop hurting? And, two, what's in store for 2022: will there be more headaches or some relief?


I don't pretend to be clairvoyant (after all, I'm still hungover). Still, there are some trends already in motion from 2021 that I feel we can extrapolate from to make at least a decent guess for a likely outcome for this year.


So, from the murky corners of my mind, here are my predictions for ten issues that affected the industry last year. In no particular order:





1. Will inflation remain high?


Yes. I don't think inflation will jump to 1970s levels, but it will remain above recent historical levels. Last year, inflation in the U.S. was nearly 7%. Inflation will ease if demand slows for consumer products. In turn, inflation will stall if the wage market pulls back as more people reenter the workforce.


Moreover, if raw material prices ease or the supply of consumer products exceeds demand, price inflation may become less of a problem. The last point is noteworthy. The model of our industry over the past 40 years has been to make far more than what's consumed. It's had economic benefits but unforeseen consequences.


For instance, many people have been employed throughout the developing world. At the same time, those same jobs were lost in the developed world. Similarly, capacity expanded to such a degree that prices remained very low. A race to the bottom, according to some. Which, in turn, fed fast fashion and led to more competitive prices for consumers. Only to find that overproduction ended up harming the planet's environment. A price to pay for low prices.


2. Will economic growth remain uneven?


Likely. Governments have struggled to coordinate economic policy to maintain consistent growth worldwide. Such struggles are nothing new; economic growth across nations has always varied. However, with Covid on the loose, such efforts were only made more difficult.


For instance, over the last two years, economic lockdowns have been hard to anticipate as the virus spread. Also, predicting government actions to control the virus has been hard to predict. The net result: inconsistent economic growth.


3. Will re-shoring or near-shoring become a permanent thing?


Yes. I call it "The Great Hedge." And it's part of a broader diversification of sourcing. There's been lots of talk of mailing out of china in favor of other suppliers. And to a greater degree than has already happened. But there's more that will occur as 2022 unfolds.


Most pointedly, re-shoring back to the United States will become more prevalent. Indeed, infrastructure and employment dissipated by the move overseas decades ago are gaining momentum. But even more importantly, will be a renaissance in production in the Western Hemisphere.


There's a lot to be said for stepped-up production in Mexico and Central America. It's already measurable in the trade data illustrating new trends in such sourcing. Bottom line: proximity to consuming markets will become an essential part of any apparel company's sourcing matrix.


4. Will China remain the largest exporter of apparel?


Yes. Despite all the negative news about China, it remains a reliable apparel source. Of course, that presumes there's a functional supply chain to deliver those goods. But assuming the supply chain problems that plagued so many companies last year are mitigated, China will remain a force in the global apparel business. They have indeed lost market share in some apparel end uses to other suppliers (in jeans, for instance, to Bangladesh, Vietnam, and Mexico). Still, China remains solid in so many other end-uses -- despite the punitive tariffs maintained by the U.S.


5. What will the pandemic have in store for us?


Let's hope there's not another variant. We've had our fill already. With each wave, the world becomes less steady. It's really a case of unpredictability and inconsistent government messaging and policies. It's hard to plan when it's unclear if some new variant romps across the planet. For sure, it's hard to prepare for the unknowable. It's impracticable. To claim otherwise is a canard. But life is filled with unknowns. We must find a way to muddle through, no matter the challenge. For our industry, that's so important to remember. We need to carry on and make the best of a bad situation.


Our best way to combat the economic consequences is through innovation. Which can take the form of new ways of conducting business and reinventing how our industry executes its goal of making and delivering products to its customers. In the first case, I think of Zoom. Yeah, we're all tired of video conferencing, but it allowed our industry to continue in many ways. Communications didn't break down. In the second case, the pandemic forced a reevaluation of how our industry functions in the most fundamental of ways: delivery. Do planet-spanning supply chains make sense anymore? Perhaps, but so do supply chains closer to consuming countries. Again, a mixed approach may provide the flexibility unthinkable just a few years ago.


6. Will the "Big Quit" continue?


Yes. But it will ease somewhat. For our industry, the real question is: how does the big quit affect consumption? In my country, the United States, workers were forced from jobs in droves as the economy withered in the face of Covid. However, government subsidies paid during the pandemic kept much of the labor pool from insolvency.


But perhaps more importantly, the availability of jobs jumped to high levels as the economy roared back from the doldrums of economic lockdowns and recession. A classic case of a mismatch between supply and demand. And many people have returned to the workforce already. Many more will.


Government subsidies are done. People have to work; only now they'll be looking to upgrade their employment. Whereas in the past, large swaths of the workforce were content to settle for minimum wages, today it's different. In fact, many companies are having difficulty filling essential roles, regardless of pay.


7. What will be key government trade policies?


U.S. and China trade relations will remain the top story for the year. Free trade advocates will undoubtedly make efforts to unwind such friction. Indeed, at some point, there will have to be a thaw. However, when considering geopolitics and national priorities and objectives, a thaw is less than a sure thing in that context.


Great power rivalry also gets in the way. For instance, friction over Taiwan will force trade into the back seat. Yet, trade can also play a valuable role in diffusing relations overall. Multilateral trade agreements will continue to play a significant role. One such example is the Asia-Pacific Trade Agreement. And let's not forget other free trade agreements established long ago. Some of those have received new life as sourcing has diversified. Think NAFTA, for instance.


8. Will sustainability remain relevant?


Not sure. Sustainability is so vulnerable to marketing, in part because no one can settle on a definition of sustainability. And make it stick. What's more, multilateral efforts to deal with climate change have so far come up short. Take COP26, for instance. There were lots of talk and some good ideas, but the main action taken was that there would be a COP27.


It seems like many cans were kicked down the road as countries struggle to come to grips with climate change. Some say that private-sector solutions will prove to be more expeditious and effective, only that even those initiatives take time to develop and implement. My fear with climate change is that it's a calamity unfolding right before our eyes. Still, there won't be the political will to do anything about it — I mean, really do something about it — until we are staring down the precipice.


9. How will global sourcing change?


It will become more diversified. For years, industry growth was predicated on concentrated supply bases, global supply chains, and low consumer prices. But, if the pandemic has shown us anything, the fundamental market works best when there's no external threat to the system's operation. However, throw a wrench in the works, and the system proved brittle and inflexible.


10. Will supply chain snags continue to plague the industry?


Yes, but temporarily. For instance, there's going to be a problem selling all of the products stuck at ports that could not be delivered to stores in time for the year-end holidays. Moreover, it will take time for the shipping industry to repair itself. Supply and demand may become more balanced this year, but that's presuming the pandemic doesn't auger so new variant to lock everybody down again. It's time for the industry to re-evaluate its sourcing strategies. Assuming there's not another viral outbreak, the supply chain will repair itself. It'll just take time.


So these are some of my predictions for 2022 -- perhaps more appropriately (and safely) expressed as "suggestions." However, my overall suggestion is that despite the challenges faced by our industry, it continues on, makes adjustments, finds solutions, and works to succeed.


My head still hurts, but at least I can see a way forward. There's aspirin in my medicine cabinet, and I have a positive outlook for our industry in 2022.


Originally published on January 4, 2022 in just-style.com.

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