The idea behind the initiators KPMG and ABURY is to combine refreshing fashion talks in an inspiring environment with business networking in an innovative way, in order to stimulate exciting and necessary discussions on the topic of the "Fashion Business in Berlin." The vision is to build an interdisciplinary network and, in the long term, to initiate and implement projects together.
The fifth round of the FABTalks, now well-established in the Berlin fashion scene, took place on February 17, 2016, at the C/O Gallery in Berlin. Even before the start of the FABTalks and the subsequent discussion, there was a guided tour through the impressive exhibitions of German photographer Ulrich Wüst and the American Stephen Shore.
Andrea Kolb, CEO of ABURY, welcomed the guests briefly and warmly, beginning with the question: "Fashion 2025 – Where is it heading, what comes next? What are the trends and expected developments, both in Germany and specifically in Berlin?"
The two speakers presented their differing perspectives and work experiences regarding fashion and its future. Attendees listened attentively to both speakers while enjoying canapés and drinks, followed by lively discussions and networking.
TALK 1: SEBASTIAN PAAS
Sebastian Paas is a Partner at KPMG in Consulting and has specialized in IT management consulting for over 14 years, particularly in the retail and consumer goods sector. He presented the latest findings from a current "Fashion 2025" study by KPMG and drew conclusions from it, as well as his own work experience, regarding the changes the fashion industry needs to prepare for.
The study was commissioned by KPMG because there was and is no comparable study in Germany, yet a number of clients in the premium segment in Germany are interested in what will happen in the future for, e.g., multi-label stores. What kind of customers will they be, and what are the sought-after formats of the future? Sebastian Paas provided an overview, noting that the evening would focus primarily on numbers and discussion, and that the future trajectory can be interpreted based on a review of the figures from the last 10 years.
Key questions of the study include, on the one hand, how e-commerce will develop in the future. On the other hand, what the city centers of the future will look like. Finally, a look was taken at prices. How will purchasing prices develop, and will there be a segment that benefits particularly?
"Will e-commerce eat up brick-and-mortar retail?"
KPMG looked at which factors are important: historical figures regarding demographics, which age group will be buying fashion in the future, and the economic factor—what it will look like.
One of the most exciting questions: "Will e-commerce eat up brick-and-mortar retail?" Sebastian Paas believes no; there will not be a zenith.
Also relevant is how customer behavior will evolve.
Looking at the predicted consumer spending on fashion over the next 10 years, it is evident that the absolute budget will stagnate. Sebastian Paas interprets this as positive, because there was a shrinking market, and in the future, it will be stable. It is also important to recognize that fashion at Fashion Week is offered for young people. However, looking at demographic change, the dominant buyer segment in the future will be between 50 and 60 years old.
Another finding from the study is that consumer spending will rise significantly. The new buyer group still wants to go to clubs at 50, spend a lot of money on fashion, and, most importantly, has the money to do so.
38% of those surveyed, which includes board members of large fashion companies, believe that this buyer group will be very relevant.
Another important question addressed in the study: Will fast fashion disappear?
If the study is correct, we should come to terms with the fact that Primark and fast fashion will still exist in 10 years and that this market will continue to grow.
Price development for 2025: The development of consumer prices over the next 10 years will remain constant, and no price increases are to be expected.
At the same time, purchasing prices will rise and margins will shrink. The question arises: in which segment does this make a difference? In the mid-price range, e.g., Hugo Boss and Marco Polo, greater profitability can be expected. The luxury industry will likely become smaller. Fast fashion will also become less profitable.
Paas's main conclusion: brick-and-mortar retail will be in higher demand again. 60% of respondents say the online fashion market will rise significantly, but from 2025 onwards, there will be stagnation for online fashion.
TALK 2: TANJA MÜHLHANS
The second speaker of the evening works for the Senate Department in Berlin and is responsible for the so-called Creative Industries. A large part of this is the fashion sector. Andrea Bury describes her as a pioneer and a fighter for Berlin as a location, supporting fashion here to enable young labels to act successfully on an international level.
Tanja Mühlhans begins by noting that she manages many creative sectors. From design & fashion to advertising to film, over 15,000 companies are eligible to take advantage of the Senate's offerings.
The focus there is on what framework conditions are needed so that as many talented people as possible can grow.
Mühlhans reports on what is currently working:
Those who operate their own shop, both online and in-store, report positive results. The same applies to niche markets. She sees potential in the 40-to-50-year-old age group, who miss having advisory services.
Tests were conducted in which every young label had to describe its target buyer group. When all descriptions were placed side by side, it was discovered how many sounded completely similar. The majority target the young, fashion-conscious, trendy, self-confident woman. But young entrepreneurs in the fashion industry need a unique selling proposition. Something that is special.
It comes down to uniqueness, especially in Berlin; that will be decisive in the future.
There is currently cooperation with the German Fashion Council at the federal level, among others. The goal is for fashion to be recognized as a cultural asset, which has not been the case within Germany so far, and fashion is generally underestimated.
“FashionTec is a market you have to keep in mind.”
Otherwise, Tanja Mühlhans, on behalf of the Senate, focuses on the topic of FashionTec, which is a very important subject. For example, LED technologies, which currently still have a very small market share. Mühlhans cautions: "FashionTec is a market you have to keep in mind."
Finally, Mühlhans speaks about the general problem of how young fashion entrepreneurs finance themselves. An area where more must be done: winning over banks for financing and loans in the arts sector.
Discussion
It was once again a great and lively discussion that provided much room for new food for thought. Many thanks for that!
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