Selected Future Challenges in the Fashion Retail Industry

Background and problem: The fashion retail industry is one of the fastest changing and growing industries in Sweden. The industry has been going through many changes and faced many challenges over the years because of the development of the digitalization. The digitalization has threatened physical stores the past years and they have had a hard time to survive. The number of online stores has been constantly growing the past years which has led to an increase in competition and change in consumers shopping behavior. That the fashion retail industry will continue to change in the future and face new challenges is for sure, but the question is how the industry will develop and what kind of challenges it will face.Purpose: The purpose of this thesis is to describe and create an understanding of how the fashion retail industry has developed the past 10 years in Sweden and thus what kind of challenges the industry has faced. Furthermore the purpose of the study is to describe and create an understanding of how the fashion retail industry in Sweden will look like in the future and thus to identify what kind of challenges the fashion retail industry is likely to face in the future. Method: To fulfill the purpose of the study a combination between a qualitative multiple case study and a quantitative study was chosen as appropriate research method. The empirical material was gathered in two different ways. The first part of the empirical material was gathered through in-depth interviews with three companies in the fashion retail industry while the second part was gathered by an online survey with 203 respondents. Together with the theoretical material an analysis could be conducted.Conclusion: The fashion retail industry has during many years faced many challenges and changes as a consequence of the fast development of the digitalization. Many physical stores have had to shut down as consumers shopping behavior towards clothes has changed the past 10 years and in the future it will change even more. More physical stores will have to shut down; the few that will be left will be dominated by big brands. The physical stores will be more like showrooms, robots will replace humans working in the stores, and unemployment rate will increase in Sweden. The competition will increase. It will be even more about timing than before and creating an experience in both physical stores and online stores will be important and new technologies will be used for this. New social media channels will appear. Consumers shopping behavior towards clothes will change even more, they will be pickier, more demanding, require more convenience, be less loyal, require faster and more flexible deliveries and be more focused on social responsibility and sustainability which all will be challenges for companies in the fashion retail industry to face in the future.