The apparel industry also goes by the names of clothing, fashion, and textile industry. Apparel and Clothing play a key role in building human cultures and civilizations. However, the basis of apparel and clothing is to cover, comfort, and protect your body, and it is a great source of self-expression of inner self. Today, we’ll discuss the PESTLE analysis of Apparel Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Apparel Industry
Some of the main political factors in the Apparel Industry PESTLE analysis are as follows;
I-Government Regulations
The consumer protection government regulations are very strict for the Apparel and Clothing companies. They comprise of ethical sourcing of raw materials like cotton and wool, labor laws, non-exploitation of workers in the production and manufacturing factories, IPR, patents of fashion designs and styles, and others. The goal of strict laws for Apparel and Clothing companies is to protect the interests and rights of labor, employees, workers, and consumers.
II-Trade Policy
Apparel and Clothing procures raw materials, supplies, and production tools and equipment from various countries. The trade policy of different countries is variable depending on their foreign policy and international diplomatic relations with other countries. However, they keep changing their policies and regulations depending on the type of government that comes into power. For instance, the US government has conflicted relations with the Chinese government, and they impose strict trade policies to reduce imports and exports.
III-Political Unrest
A stable political environment plays a key role in the growth of businesses and companies. Apparel and Clothing companies have their sourcing partners, suppliers, and manufacturing companies in various countries worldwide. The political environment in the 3rd world countries is highly unstable, the disrupted supply chain and distribution channels would negatively impact the production of the company.
Economic Factors Affecting Apparel Industry
Some of the main economic factors in the Apparel and Clothing Industry PESTLE analysis are as follows;
I-Economic Growth
The economic growth of the country plays a key role in the growth and development of Apparel and Clothing companies. When people have stable jobs and multiple employment opportunities, they would have sufficient disposable income to buy things they like. Clothes and apparel are luxury products, and people would only spend on luxury items when they’re financially stable.
II-Labor Cost
The labor cost for the production, manufacturing, and sourcing of raw materials has been increasing in recent years. This is due to various factors like amendments in labor laws, high hourly wage rates, and high salaries and benefits. However, it has made it difficult for Apparel and Clothing companies to remain profitable while complying with the labor laws.
III-Expensive Raw Material
The cost of raw materials has been increasing significantly for the past few years. This is due to the high labor sourcing cost, taxation, import and export trade tariff, fuel prices, and currency exchange rate for procuring globally. Expensive raw materials and production supplies negatively impact the sales, revenue, and profitability of the company.
Social Factors Impacting Apparel Industry
Some of the main social factors in the Apparel Industry PESTEL analysis are as follows;
I-Customer Needs and Preferences
The needs and preferences of the customer market keep changing over time due to changing customer market trends. Apparel and Clothing companies should become familiar with the changing needs and preferences of the customer market. It allows them to keep up with growing market trends and improves the customer satisfaction level.
II-Ethical Consumption
The consumer market has become highly conscious about ethical sourcing and consumption of clothes and apparel. Many research studies have shown that the production of clothes consumes a lot of water; the clothes recycling rate is very low; they end up causing a massive rubbish dump. Customers want to make ethical and conscious clothes shopping decisions; they don’t want to buy from such brands that are engaging in unethical practices.
III-Cultural Values
Apparel and Clothing should comply with the cultural values of different countries, regions, and markets. For instance, the dressing codes of Muslim countries are different, the Indian market has a unique dressing code, and the Western market has completely different dressing and fashion trends. Cultural awareness would help the company to become familiar with the growing customer market trends.
Technological Factors Affecting Apparel Industry
Some of the main technological factors in the Apparel and Clothing Industry PESTEL analysis are as follows;
I-Automation Technology
Apparel and Clothing companies are implementing the latest and advanced automation technology in its production and manufacturing plants. It allows them to efficiently perform various production processes, reduces the wastage of resources, limits reliance on excessive labor, and saves time and resources. As a result, the automated technology improves the production yield.
II-3D Printing
3D printing is a revolutionary technological development in the Apparel and Clothing industry. It allows them to develop unique and innovative fashion designs and styles, and the 3D printer would deliver the required products. However, the designers no longer have to worry about the production and manufacturing about the production and manufacturing complications.
III-Textile Innovation
Apparel and Clothing companies are investing in sustainable innovation technology. It comprises of sustainable materials, ethical practices of sourcing, responsible production and manufacturing methods, and eco-friendly practices. However, sustainable tech would help the company amplify its customer market reach, network, and sales.
Legal Factors Impacting Apparel Industry
Some of the main legal factors in the Apparel Industry PESTEL analysis are as follows;
Regulatory Compliance
Apparel and Clothing need to comply with the regulations and policies of different countries. They comprise of labor laws, sustainability initiatives, trade laws, import and export laws, trade policies, and food requirements. Regulatory requirements would help the company to smoothly perform its operations without any disruption and delays.
Environmental Factors Affecting Apparel Industry
Some of the main environmental factors in the Apparel and Clothing Industry PESTEL analysis are as follows;
Environmental Sustainability
Apparel and Clothing should make a strong commitment to the environmental sustainability initiative. They need to take various environmental sustainability steps like renewable sources of energy in the production facilities, ethical sourcing, and responsible practices. Environmental sustainability initiatives would help the company to keep up with the growing customer market trends.
Conclusion: Apparel Industry PESTLE Analysis |PESTEL Analysis of Apparel Industry |External Environmental Analysis of Apparel Industry | Strategic Analysis of Apparel Industry
After an in-depth study of the pestle analysis of Apparel Industry; we have realized that Apparel and Clothing is the world’s growing industry. If you are learning about the Apparel and Clothing Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
