Sourcing for the global apparel and footwear market has become ever more challenging over the past several years. Now, brands are navigating two additional complicating factors. First, the value chain faces increased pressure from demand fluctuations that have pushed brands to reduce or cancel orders as well as from logistics disruptions. Second, external forces such as regulation and new market entrants are resetting industry standards for speed, sustainability, and digitalization.
Apparel has traditionally been characterized by limited supplier collaboration and few long-term strategic relationships compared with other industries. This dynamic is because apparel has a fragmented supplier base, and brands pursue low production costs across different regions. For several years, the industry has recognized that market dynamics call for a more strategic approach to their supplier relationships. This year’s McKinsey survey of apparel chief purchasing officers (CPOs) reveals that for the first time, they are truly taking action.
