Mounting digital marketing costs and e-commerce readjustments have put the viability of pure direct-to-consumer business models into question. The State of Fashion 2023 reveals that most brands will need to diversify their channel mix beyond DTC to generate growth.

The 10 themes in The State of Fashion 2023, the authoritative annual report from The Business of Fashion and McKinsey & Company, highlight how businesses can deploy realistic yet bold strategies to drive growth, even amid challenging times.

From a stabilised supply chain to the return of brick-and-mortar, the industry saw a new sense of normal in 2022. Still, challenges and new competition remain. How will brands and retailers adapt?

Consumers will be unevenly impacted by economic turbulence in the year ahead. Depending on disposable income levels, some will postpone or curtail discretionary purchases, while others will seek out bargains, creating opportunities for off-price, resale and rental channels.

Formalwear will continue to be redefined in 2023. The black suit will no longer be a wardrobe staple and consumers will prioritise versatility for work and events, though special occasions will be dominated by statement-making outfits.

After years of trial and error, rental platforms have found new ways to improve margins and acquire customers, such as focussing on niche categories. Profitability remains elusive, however.

Read the latest BoF Insights report to get BoF’s perspective on designer bags and small leather goods, covering key competitive shifts, including what, why and how consumers buy in the US and China, the category’s biggest markets.

The rental platform’s revenue is up from last year — with the number of active subscribers more than doubling — but figures still remain below pre-pandemic levels.