Fast Fashion

Introduction

-Fast fashion is a contemporary term which emerged in mid-2000s. It is usually used by fashion retailers to express that designs move from catwalk quickly in order to capture current fashion trends. These trends are designed and manufactured quickly and cheaply to allow the mainstream consumers to buy current clothing styles at a lower price.

-In the UK, this business model is used by most high street retailers such as H&M, Zara, Next and Topshop.

- Comparing to high-end luxury brands, most fast fashion brands are not fashion setters but rather trend followers that target mid-to-low price range.

- From a management and economics perspective, fast fashion has been the long-awaited realization of “lean retailing" with items produced in small batches and within short lead times. It not only reduces the time taken to get fashion from the runway into stores, but also allows retailers to hold much lower inventory levels, maximising their cash flow.

Why fast fashion

Explosive expansion

The British fast fashion market has experienced explosive expansion in recent years.

-In 2014, total clothing spend in UK has increased 4.6% to £52.9 billion, despite the squeezed income. Most fast fashion brands such as M&S, Next, Primark and so on are prominent in the top 10 fashion retailers, contributed 72% to this growth and hold around 35.5% market share of the whole clothing retailing market in the UK.

Established recognized brands

Although most fast fashion brands sell relatively cheaper clothes, it doesn’t mean they are identical and featureless brands. In fact, most of them are always finding their own ways to establish themselves as recognised brands among the customers. For example, Zara is usually considered as the most fashion-forward brand because of updating its collections twice a week. Topshop and River Islands impress people with their unique designs.

PEST analysis (external environment)

Political factor

In 2010, the UK government has launched a sustainable clothing action plan to tackle the environmental impacts brought by fast fashion culture. It is stated that about 2 million tonnes of clothing end up in landfill every year because of mass cheap, throwaway clothes manufactured by fast fashion retailers.

Economic factor

-Cotton prices are a key element in the final prices paid by shoppers for clothing. So the fall-back in global cotton prices prompted a similar trend in UK shop prices for clothing.

-Besides, the inflation of clothing prices has been downwards since 2014.

-While the financial crisis led people to cut back on spending, fast fashion has been a winning industry in recent years. Although inflation is rising and wage increases are very limited, customers have continued to grow their spending on fast fashion brands in real terms year after year.

Socio-cultural factor

-According to the Mintel, the 15-24-year-old population is forecast to decline to 2018 and the older age groups will increase by 33.5% in next 3 years, which will be a potential weakness for fast fashion retailing because the senior people tend to be the lowest spender on fast fashion clothing