Who Are The Fast-fashion Leaders
In the world of fashion, the past several years have seen a concentration of success among a few leading brands. Many long-standing fashion retailers have seen their fortunes reverse, with icons like Diesel and Nine West, according to the Fashion Law
, among those struggling.
Amidst the doom and gloom of this new era of fashion, however, a new trend of “fast fashion” brands has emerged. They are marked by lightweight designs emphasizing casual make and throwing off the staid traditions of older fashion brands.
Now, however, new competition from smaller, faster-moving, challengers is posing problems even for these leading brands.
Zara, H&M, And Uniqlo Lead The Fast-Fashion Charge
The fast fashion trend has gathered momentum over the last decade thanks to a number of advantages over older fashion brands.
The brands leading this movement focus on offering trendy designs at lower price than similar looks will cost at classic fashion brands. Notable among the fast fashion movers and shakers are the following companies:
- Zara - Now a global giant, Zara is part of Spanish entrepreneur Amancio Ortega’s Inditex Group, with revenues of around $18 billion.
- H&M - With revenues of $25 billion, H&M is a Swedish fashion retailer with a heavy focus on fast fashion.
- Uniqlo - This Japanese fashion company has long had a focus on casual wear.
Their Business Models
A large part of the fast fashion leaders’ success comes from their unique business models. These companies learned from the popularity of fashion shows and aim to bring buyers similar looks.
However, they are more responsive in their approach, and they move fast, turning around a design much more quickly than other fashion brands. Their manufacturing discards expensive materials for more lightweight, cheaper materials, which keeps the end product affordable.
As a result of their business models, the fast fashion leaders have proven popular with millions of budget-conscious fashion consumers around the world.
Changes In Customer Trends
While the strategies generally deployed by fast fashion leaders have proven effective in the past, there are new challenges. These are driven largely by changes in customer trends and the rise of competitors with even lower cost structures.
Competition From Faster-moving Brands
Similar to how fast fashion leaders have grabbed market share at the expense of high street brands in the fashion market, newer brands pose a threat. These are new fashion brands that move fast and have proved appealing to Millennials, and they include:
- Fashion Nova
As reported by Business Insider
, Fashion Nova has been accused of copying major established brands’ merchandise, then selling the knockoff for far less. Such allegations are not unique to Fashion Nova, but apply just as well to many of the new fast fashion challengers.
This trend, however, is hard for long-established brands to combat, due to the laxity of the laws governing such matters.
Online-only Fashion Retail With Lower Overheads
Besides copying designs and, generally, getting away with it, new challengers in the fast fashion industry have another trick up their sleeve. Brands like Missguided and Fashion Nova, among other challengers, have gone digital-first, or digital-only
They are adept at connecting with young buyers of fashion, who tend to be more comfortable with, and rely heavily on, digital technology.
In addition, by going digital-only, some of these brands have achieved more cost-efficient operating structures. This lets them cut costs even more than the establishment of fast fashion. They can attract new buyers with even lower prices than anyone else can offer.
How Fast Fashion Leaders Are Affected
While fast fashion leaders like H&M are not new to the ups and downs of the fashion world, the latest challengers have made business much harder for them. As a result, some of the brands that had established themselves as fast fashion front runners are now being disrupted.
Unsold Inventory Piling Up
One of the effects of the increased competition in the space is that established fast fashion retailers are seeing unsold inventory pile up. Given the lost sales and the non-negligible costs of holding unsold inventory, this is a problem that can worsen a company’s financial position.
Part of the inventory pileup was attributed to lower sales. The company was seeing fierce competition from other fast fashion brands. In addition, consumer trends in favor of online shopping exerted a downwards pressure on in-store sales.
Even worse than lost sales, some of the fast fashion leaders have had to close stores or declare bankruptcy.
As reported by USA Today
in March 2019, fast fashion retailer Charlotte Russe was forced to declare bankruptcy and shutter stores. While the company sold to women in their teens and twenties, it relied on a heavy mall presence.
In an era where online shopping has become more important, just offering fast fashion products, even to Millennials, was not enough to save the company.
How Should Fast Fashion Leaders Respond?
The challenges being faced by the early leaders of the fast fashion movement are not without precedent. After all, the trend of other fashion brands and retailers closing down around the UK, among other countries, points to commonalities in the challenges retailers face. The following strategies may help these fast fashion brands and other retailers survive the onslaught.
Take Digital Sales More Seriously
Fast fashion leaders like H&M that have struggled lately did not prioritize their online sales activities. As a result, they were vulnerable to the shift to online shopping that has prejudiced retailers of all stripes in favor of online merchants.
In light of the success of the contenders’ success in fast fashion, it’s time just about every fast fashion retailer invested more in digital sales. Digital channels like an online store, along with storefronts on third party platforms like Amazon and eBay can help a retailer quickly make sales online.
Master Social Media Marketing
New fast fashion brands like Fashion Nova have found massive success on social media platforms like Instagram. Marketing on social media is similar to marketing in the radio and TV world, however there are important differences.
New fast fashion brands like Missguided have partnered with social media influencers to create popular social campaigns.
The result is wider reach and engagement with the ideal consumers that can buy what the brand is selling.
New Challenges And Opportunities
While fast fashion leaders like Zara, H&M, and others, have led the industry for years, their continued success is by no means guaranteed. Just like they disrupted traditional fashion brands, they are now facing challenges from newer fast fashion brands. These challenges have come in the form of cheaper, more responsive product lines and lower cost structures.
To meet this challenge, fast fashion leaders will need to unlock opportunities in their digital shopping experiences. Learning the new game of social media can yield good results, just as it has for upstart fast fashion brands like Fashion Nova.