2009

Are trend forecasting companies really useful to people in the fashion industry?
A succinct assessment.

Tessa C. Mayouya-Ndala ITE478-Fashion Internship 9/9/2009

Contents
Introduction ......................................................................................................................................................... 3 Review of the different trend forecasting companies ........................................................................................ 4 WGSN- Brief Company operations review .......................................................................................................... 5 Essential Information: ..................................................................................................................................... 5 To what Extent are Trend Forecasting Companies Useful to fashion business .................................................. 7 Conclusion ........................................................................................................................................................... 8 References & Bibliography ................................................................................................................................ 10

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Introduction
With rapidly changing market environment and consumer attitudes, designers, marketers and fashion companies need to make sure they address and foresee every issue in the market and, come up with appealing products and messages. In order for them to predict development in the market they use trend forecasting; it aims at monitoring market needs, trends and changes that result from developments in the market. Forecasting is a creative process that can be understood, practiced and applied by anyone who has been introduced to the tools (Brannon, 2006; pge6) therefore, companies/designers can conduct their own research and highlight their own trends; they also have access to agencies that specialize in one or many areas of trend forecasting and that would, for a fee provide trend forecast and analysis. The current global situation has brought about various changes to market developments and, consumer attitudes and buying behavior. These changes mean fashion companies have to constantly find ways to improve their offer, appeal to the consumer changing needs and values and, cut costs without compromising on other company operations. Trend forecasting being a costly and time consuming, but necessary process, this paper sets out to assess the usefulness of trend forecasting companies to people in the fashion industry in relation to finding appealing trends, cutting costs and saving time for other majors operations involved in a fashion business. It will provide a review of the different trend forecasting companies types and functions in relation to areas in the fashion industry; draw a concise profile of the global trend forecasting company WGSNs operations and, assess the extent to which, such companies are useful to people in the fashion industry.

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Review of the different trend forecasting companies

Social and cultural changes brought about by economic issues and other drivers of change determine new and emerging fashion and, need to be supervised heavily. Trend forecasting evaluates public psychology and spots upcoming trends and products that will be hot in the coming season up to 5 years in advance and, is used by design firms and retail markets to predict trends in color and fashion. Forecasting agencies consult with companies in apparels, cosmetics and interiors but also include business trend forecasting which, predicts sales and the next hot or cold selling apparel group. These companies monitor various variables in the market; local and global, assessing street styles, trade shows and other popular culture spheres to identify and assess market needs and changes. They provide a more objective vision of the marketplace since they are not in favor of a particular designer or retailers company vision. Unlike an in-house forecasting team, forecasting agencies can, more easily and cost effectively; differentiate between real trends and fads by focusing on mainstreamers (people who affirm long lasting trends) versus trendsetters ( who only indicate what is new), constantly providing new areas for research and, searching across the globe for new and interesting developments. They provide retail markets and fashion businesses with research results and analysis via monthly updates and password protected websites along with, trend books containing color chips, textile samples, fashion sketches and photos to illustrate trends and forecasts and, published about eighteen months ahead of the fashion season. Trend forecasters in forecasting agencies use the same tools common to all trend forecasters; when developing a forecast they take the following steps; Identify the basic facts about past trends and forecasts. Determine the variations between past forecasts and what actually happened. Determine the factors that could impact on future trends. Application of forecasting tools and techniques while paying attention to issues of accuracy and reliability. Continuous follow up of the forecast to identify any variations from expectations.

However, as exterior elements of the client company, forecasting agencies forecaster have to pay more attention in their analysis to make sure that they find effective ways to align the forecasts with the clients overall companys identity. In-house forecasters can more easily tailor a trends qualities to their organization as they have a proximity that gives them leverage nonetheless, this same proximity can prevent them from perceiving valuable trend information. Therefore, it can be said that forecasting agencies have a more objective approach to providing; executives with ways to develop their vision of change, anticipate the future and inputs for planning; marketers with tools to position their products in the market place; planners of competitive strategies with market share and competitors market position data and; designers with style directions (Brannon, 2006).
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There are different forecasting specialties and companies can specialize in one or more (Brannon, 2006); Long term forecasting: five years or more. Short term forecasting is done more than a year ahead and involves regular review of the long term vision and adaptation depending on circumstances. It also helps coordinating a companys operations in regards to the industry and market place. Fashion scans which follow the latest fashion news to spot emerging fashion and lifestyle changes. Consumer scans; relate to consumer segmentation. Fashion analysis provides support for executives decisions in the supply chain drawing inputs from the fashion and consumer scans. Social and Economic trends are engendered by changes in the other macro environment factors and should be monitored actively. Trend analysis which identifies short and long term trends that can affect business operations. Competitive analysis which identifies possibilities for improved competitive advantage. Integrated forecasting which carries out all of the above to provide a better and more detailed forecast of development and a more thorough interpretation.

The rapidly changing customer attitudes mean that fashion companies should not rely on one forecasting specialty or a single forecaster as this could cause them to miss other significant developments in the market. Forecasting agencies using integrated forecasting provide a wider picture of what the consumer will see as new and exciting, they provide combined forecasts tailored to consumer preferences, companies marketing niches, competitive environment and changes in the cultural environment; They allow fashion companies and designers to cut their spending on using more than one forecasting agencies or, on sending their own forecasting team around the world to monitor trends. Following is a profile of the trend forecasting company WGSN which will highlight the major companys services and how these valuable and beneficial to the companys clients.

WGSN- Brief Company operations review

Essential Information: Sourced from: http://www.emap.com/sectors/fashion/wgsn

Product Formats Online and Consultancy Division Insight
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 Sector Launched Fashion and Retail 1998 Subscribers 36,000 in 71 countries Archive of 4.8 million images and 14,000 downloadable graphics Presence in 50 countries on six continents Over 600,000 pages of insight and inspiration Daily bulletins in six languages

WGSN which identifies itself as the global leader in style trend analysis provides styles and trend information to CEOs, designers, buyers and marketers and employs over 200 people. The company partners with its customers to make sure they receive information in a timely manner from long term thinking to product development, from real-time analysis to business strategy (WGSN.com). It offers online service and in-depth consultancy and advice across the sectors; Womenswear, Menswear, Kidswear, Swimwear, Intimate, Youth, Interiors, ActiveWear, Footwear, Beauty and Accessories. WGSN provides services which include: Forward trend analysis, up to 12 months ahead of the season. Close to season overview, 3 to 6 months ahead. Catwalk and trade shows analysis Access to over 1500 brands per season. Real time retail analysis and street reporting. Competitive shop reports. 24/7 news CAD designs and, Deep business analysis. The companys 200+ staff makes sense of fashion trends through and by, constant global coverage, expert teamwork, original CAD design and, forecasts confirmation. The teams travel all around the world to gather cultural inspiration, track consumer attitudes and monitor retail patterns up to four seasons in advance and, continuously track chosen trend in real time to monitor their development and, confirm their forecasts as they occur. The teams have various tasks and; Research: key moods and changes in art, music, photography, film and literature; new talents and innovators in architecture, science technology and media and; long-term cultural indicators, seasonal trends and real-time developments. Analyze key themes to put new information in perspective through shared learning between categories and combination of information, experience and instinct. Design key silhouettes, shapes and graphics which are available for download.

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To what Extent are Trend Forecasting Companies Useful to fashion business

Consumer attitudes have changed greatly due to various developments in the market and these changes are particularly important to people in the fashion industry. The rising unemployment level, with the total number of unemployed people reaching 2.47 million in May 2009 demonstrating an increase by 743,000 since May last year (Statistics.gov.uk); the weak currency; with the pound being down 1.18 per cent against the euro at 0.9121 on 24 September 09 (www.ft.com) and, rising concern about society and businesses impact on nature and the environment are all factors that have affected consumer spending. Also with the improved access to information of all sort, consumers can now be more aware of what is going on around them, they have become more knowledgeable and thus more demanding. In this increasingly globalised world, they demand exciting, creative and well designed products that demonstrates and carries the companys ethics and standards while responding to their needs. Forecasting agencies work closer to the public with their teams constantly monitoring street styles and consumer attitudes around the world and because of this, they are able to spot relevant change to those only particular to a minim part of the market. This is valuable to companies, for example; in the UK where the weak currency gives way to a surge in tourism levels as foreigners can now afford to come on holyday and spend more than they used to, fashion companies and designers must ensure that they cater to those consumer needs as much as they do with their British market; an understanding of the similarities and differences in people attitudes, perceptions, needs and buying behavior can acquire through effective forecasting and analysis. People in the fashion industry need an understanding of what the market is and will be looking for; they need frequent warning signals of what the consumer will want next. Todays market environment makes such a need very important as mistakes in product development and design can have disastrous consequences on a fashion business. Furthermore, the large amount of emerging trends in todays marketplace has made it harder to predict changes and, the process of trend forecasting now requires larger teams and more travel which, makes it more costly for companies to have an in-house forecasting team. Companies specializing in trend forecasting provide a timely and cost effective way for fashion companies to keep an eye on the developments in the market that will affect their customers. According to expert, trend analysis/forecasting companies are important to the people in the fashion industry because retailers and buyers are constantly looking for indicators of the public mood (Puremarketing.co.uk) and, the wide spectrum of trend forecasting companies, particularly those using integrated forecasting, provides them with valuable insights. Forecasting agencies objective and early guidance allows fashion companies to develop suited product and marketing messages that would appeal to consumers, address market issues and assimilate companies distinctiveness.
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Companies like WGSN, TrendSpot and Pro-Spec allow fashion companies to focus more on their strategies long term achievement and on other company operations. Their assessment of the various societal forces impacting on the market allows them to spot trends as soon as they emerge in different parts of the world. Such companies have a large number of staff dedicated to identifying, assessing, understanding and making the most of changes in the market and, provide fashion companies and insiders with a better overall vision of what the future in fashion holds along with, ways and technique for them to align chosen trends with their brand identity. Fashion companies and designers can beneficiate from the services of trend forecasting companies like WGSN as they provide them with various tools that would allow them to improve their offers and strategies. They supply them with tools and techniques that allows executives to monitor the market, identify growth opportunities, streamline overall design costs; designers to create new trendy and brand driven products, understand the market and keep up with material innovations and sourcing; buyers to focus on sales while keeping an eye on trends, save time and travel costs and find creative inspiration and; marketers to save time and money, formulate long term strategies and identify opportunities for growth while tacking the competition. Todays unsteady global economic situation and rapidly changing consumer attitudes has brought a need for fashion companies and designers to, better tailor their offer to consumers need and wants while keeping a close eye on their finance and other environmental forces that drive the market. They need to be able to predict changes in the market as early as possible and respond to them in a timely manner and with appropriate products which is why, trend forecasting is important for the people in the fashion industry and many others. Hiring an inhouse trend forecasting team is an option however, the company will then have to cover the charges of sending said team around the world to monitor trends and might lose some on the time spent analyzing research findings.

Conclusion
After reviewing the types and function of trend forecasting agencies in relation to areas in the fashion industry, drawing a concise profile of the global trend forecasting WGSN and assessing the extent to which such companies can be useful to people in the fashion industry, this report has come to the conclusion that trend forecasting companies like WGSN can be useful to the people in the fashion industry as it allows them to have a wider picture of what might happen. These companies constant monitoring of the majors areas generator of change in the market, their objective approach and their ability to align each trends with a given companys identity, provide fashion companies and designers with information and insights that might have been more costly to obtain.

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However, given the broad portfolio of WGSN-like companies and their emphasis on design, further research and investigation of the designers real role in todays fashion industry might prove revealing.

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References & Bibliography

Brannon (2006) Fashion Forecasting. 2nd edition; Fairchild Publications: Inc. New York Bruce & Hines (2002) Fashion Marketing: Contemporary issues. Butterworth-Heinemann: Oxford. WGSN.com: http://www.wgsn.com/en/Overview.html http://www.wgsn.com/en/What-You-Get.html http://www.wgsn.com/en/How-We-Do-It.html

Kotler & Armstrong (2004) Principles of Marketing. 11th edition; Pearson Education: Inc. New Jersey. Perna R. (1987) Fashion Forecasting. Fairchild Publications. New York. www.emap.com: http://www.emap.com/sectors/fashion/wgsn www.ft.com:

http://www.ft.com/cms/s/0/b8c92972-a8ef-11de-b8bd-00144feabdc0.html?nclick_check=1 [Accessed 24-09-09]

www.hrmguide.co.uk [ Accessed 17-09-09]

http://www.hrmguide.co.uk/jobmarket/unemployment.htm. www.library.uc.edu www.money.cnn.com www.puremarketing.com www.statistics.gov.uk [ Accessed: 17-09-09] http:// www.statistics.gov.uk/cci/nugget.asp?ID=12 http:// www.statistics.gov.uk/cci/nugget.asp?id=462 http:// www.statistics.gov.uk/cci/nugget.asp?ID=192

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