What is Fast Fashion?
When I was growing up most fashion companies have four seasons: spring, summer, fall, and winter. However, in the modern fashion business, you’re looking at companies who produce between 17-30 seasons. Each garment is made for 10 uses or less and in order to move inventory, they constantly hold sales to motivate consumers. Companies also produce fewer quantity of each SKU (stock keeping unit) and provide more variety.
Below is an excerpt from my thesis:
Since Zara created and mastered Fast Fashion, the fashion industry has followed suit. The success of the fast fashion model, as demonstrated by Zara being named one of the most successful companies in 2017, has incentivized companies to push out more products in greater variety, and in a shorter span of time.
The fast fashion business model shortens the development cycle from catwalk to consumers by reducing production time and cost. Lower product quality results in lower production costs, and in turn, inexpensive prices for customers, who can afford more items, but also have to replace them more frequently due to faster depreciation.
What do you think is driver behind the success of fast fashion? The most important part is the “transactional utility” - it is the good feeling when you buy something you really like, will use it but above all it was a good deal! Fast fashion builds on this sensation and because of their need to get rid of inventory - many items will be on steep discount, which empowers that feeling even more. Many people also use shopping as a form of stress release - in China, Alibaba utilized the cultural phenom of “Single’s Day” (or Anti-Valentines Day) to earn over $18 billion US in sales within 24 hours.
We should also look at the largest consumer group of fast fashions. Millennials has become the largest consumers - due to their increase in buying power. But more importantly, the power of social media. Many millennials see shopping online or following a new trend in social media as a “search for self”. Trends has come and gone at an unprecedented rate. What was relevant a month ago, without it being a trending topic or featured by Instagram influencers, it will quickly lose steam. In which case, the millennial consumer will go to the next popular thing and try to discover a “new self”. The idea of “classic” has become harder and harder sustain in the fast- moving world of social media. Different companies try to stay “relevant” and compete for attention to the millennial consumers. Although these changes has created mass opportunities for businesses - it does come with an unintended consequence.
Fast Fashion is pretty well defined in recent times - when I first learned about the industry was about 10 years ago (I am an old person) and it was a disruptive business model. To this date, Fast Fashion is prime example of inventory management in Operations class in b-school. And I can admit that I was an avid consumer of it. However, with the increasing sustainability trends among the new generation of consumers - these fast fashion companies (i.e. Zara, ASOS etc.) are feeling the increase pressure.
What if I don’t buy fast fashion, what’s the problem? And what are the consequences of this revolutionary business model? All this and more will be explained next week.