"A finger put up to the wind in fashion today will find, not just change blowing through the industry, but a whirlwind threatening to carry away everything not tied down. The headline-grabbing designer debuts this past season - from Matthieu Blazy at Chanel to Demna at Gucci - are just a sign of how powerful a storm is passing through. There's also the continued slide of the American department store, the near-complete digitization of marketing, President Donald Trump's trade war with the world, the after-effects of the pandemic, the tech dominance of a few large players like Meta and Google."
""In retail, IT was somewhere between 1.5 percent and 2 percent of sales," Karabus said. "Now it is anywhere from 3 percent to 5 percent-plus. "Marketing has gone from under 2 percent to somewhere between 3 percent and 5 percent of sales, which is massive," he said. "Today, the cost of digital technology, digital marketing is dominated by Amazon, Facebook, Instagram and Google." Logistics costs have "exploded" from a range of 3 percent to 4 percent of sales to anywhere from 5 percent to 10 percent as the industry seeks to keep up with Amazon's free shipping and returns for Prime members."
Fashion retail faces simultaneous, accelerating disruptions: creative upheavals at major houses, the decline of American department stores, near-complete digitization of marketing, trade tensions, pandemic after-effects, and concentration of tech power. Retailers now allocate far more to IT and digital marketing, with IT rising from about 1.5–2% of sales to 3–5%+, and marketing moving from under 2% to roughly 3–5% of sales. Logistics costs have jumped as retailers try to match Amazon’s shipping and returns. The combined 5–10 percentage-point increase in these cost categories has reduced typical EBITDA margins from around 10–12% to midsingle digits, making legacy models unsustainable and prompting broad strategic reinvention.
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