Sometimes the writings on the wall just aren’t accurate.
Leading up to 2016, experts and pundits sounded off with a host of expectations for the fashion industry based on historical analyses, economic indicators and other data.
Indeed, much of the yearly retail forecasts are backed by sound information, but as is always the case, any prediction that relies on the behaviors of people often leaves much to chance.
Here, we round up three things the experts didn’t quite get right.
Expect the Worse From Department Stores
After a rough 2015, analysts predicted that department stores would bring many of their challenges into the new year. And while 2016 was not without its shortcomings, generally the past 11 months saw many department stores make strides in the right direction. Although Macy’s added another 100 store closures to its list of shuttering doors, last month the firm upward adjusted its guidance for the remainder of the year, signaling better days ahead. Meanwhile, Nordstrom Inc. pulled off stellar third-quarter results and also raised its outlook in November. And Kohl’s Corp. — which also experienced a highly successful third quarter — is forging ahead with its plans to add Under Armour to a growing assortment of powerhouse brands on its shelves.
The Year of the Big Deals
Bullish analysts called for 2016 to be the year of red-hot deal-making, but the M&A space was fairly cool for fashion firms. After 2015 saw mega transactions — including the Coach-Stuart Weitzman buy, the sale of Rockport by Adidas and the merger of Net-a-Porter and Yoox — footwear and apparel firms put their wallets away for much of 2016. And with reports this week dousing talks that Coach and Burberry were set to merge, it appears 2016 will end on a soft note for the mergers-and-acquisitions space.
E-Commerce Will Gobble Up Brick-and-Mortar
During the past three or more years, the significant rate at which shoppers have been moving online has been heavily chronicled. As a result, many experts have predicted that e-commerce only players, such as Amazon.com Inc., would send brick-and-mortar stores packing. Although increased e-commerce competition has contributed to the demise of some firms this year — Sports Authority is one example — many brands and retailers have proved to be resilient in their quest to compete in an increasingly digital age. This year saw the rise of strategies and services such as buy online, pick up in store (BOPIS), where brick-and-click sellers leveraged their physical stores to win back customers. And the most recent Thanksgiving weekend data showed that online and brick-and-mortar shopping rates are approaching parity as shoppers seem to be learning to balance their use of both channels.