The Year in Retrospect: What Our Team Got Right About Our 2024 Predictions
On January 24, 2024, our team made predictions on what we thought would happen in the industry for the upcoming year. In our LinkedIn post titled “2024 Crystal Ball: 4 Key Things to Watch in the Footwear & Apparel Industry.” we covered everything from consumer habits, politics and the global marketplace.
When you put something out into the digital stratosphere, you should own up to what you predicted - regardless of the outcomes. Therefore, we asked a few teammates to look at what we predicted and assess whether those musings were on par or way, way off.
Prediction #1: Uncertain but Cautiously Optimistic Consumer Environment
Did we nail it? Yes!
Annette’s Perspective: Inflation continues to drive consumer anxiety, with many everyday items still priced high. However, brands and retailers extended sales periods—such as Cyber Week instead of just Cyber Monday—resulting in overall increased spending. Additionally, the looming tariff threats may have prompted pre-purchasing in Q4.
Dave’s Perspective: Stock prices performed well in certain sectors, and overall, consumers did not shy away from spending despite economic challenges.
Lee’s Perspective: Despite the uncertainty, the luxury market has continued to thrive.
Bottom Line: While consumer anxiety remained, spending trends indicated resilience, especially during promotional periods.
Prediction #2: Politics and Policies are going to have a major influence around the world.
Did we nail it? Yes!
Annette’s Perspective: Disappointingly, the recent climate talks at COP29 fell short in committing to fossil fuel reduction, though investment funding goals increased. The changing U.S. administration and rising nationalism globally have indeed impacted trade and policies. Questions remain about their long-term effects on infrastructure development, raw material availability, and labor.
Dave’s Perspective: This prediction was accurate. From President Biden’s continuation of tariffs to former President Trump’s recent remarks at the end of the year, politics has undeniably shaped the economic landscape.
Lee’s Perspective: Companies have already anticipated this changing political and policy landscape by diversifying supply chains and exploring new regions.
Bottom Line: Global politics played a substantial role in shaping the industry this year with ripple effects seen in trade, labor, and environmental commitments.
Prediction #3: Pressure on Margins will still linger
Did we nail it? Yes!
Annette’s Perspective: While inventory pressures eased, new challenges emerged, such as port strikes, tragic accidents causing delays, and increased costs. Capacity issues at factories and a shift away from China-based manufacturing further strained margins.
Bob’s Perspective: Competition grew fiercer in 2024, with potential government regulation targeting brands like Shein and Temu. Restrictions on leveraging “321” provisions could also impact margins in the future.
Dave’s Perspective: Raw material prices and Tier 1 supplier capacity limitations persisted. Labor rates remained elevated, and the threat of Chinese tariffs increased capacity pressure in other regions.
Lee’s Perspective: Margin pressures have persisted due to rising input costs (such as transportation, logistics, and energy), labor expenses and competitive pricing. Companies have responded by optimizing operations, cutting costs and implementing innovative pricing strategies (bundling, limited-time offers, discounts to loyal customers, etc.).
Bottom Line: Margin pressures were indeed a recurring theme, exacerbated by supply chain challenges, regulatory scrutiny, and geopolitical risks.
Prediction #4: Value and Quality
Did we nail it? Eh… 50/50
Annette’s Perspective: Walmart thrived while Target faced challenges. Inflation’s reach influenced consumer behavior, with budget-conscious shoppers closely monitoring spending. Conversely, the luxury market remained resilient, largely unaffected by broader economic pressures.
Bob’s Perspective: Brands like New Balance and On succeeded by maintaining full pricing for their goods. These brands’ deep connection with their customers contributed to significant revenue and profit growth.
Dave’s Perspective: Quality mattered, but the value play didn’t dominate as anticipated. Consumers were still willing to pay a premium for high-quality products.
Lee’s Perspective: A lot of people continue to prioritize value and quality, and with money being tight, consumers are more discerning about what they are prepared to spend their money on. They are still prepared to spend on higher-priced products if they believe they are getting great value for the quality.
Bottom Line: Value and quality both proved pivotal, but the enduring willingness of consumers to invest in premium products underscored the strength of brand loyalty and customer engagement.
Final Thoughts
Overall, our team was close on our predictions. Zefyr Solutions brings the industry knowledge and foresight to help you proactively navigate the dynamic environment we live in today
Contact us for a conversation on how to plan for 2025. We can help you navigate your business’ next steps thoughtfully and strategically. Email Dave at dk@zefyrsolutions.com for more information.