by -- February 22, 2014
This is certainly a question on the minds of many teenage apparel retailers today. Traditional teenage apparel retailers such as Abercrombie & Fitch, Aeropostale, and American Eagle Outfitters, once very popular with teens, have been increasingly challenged in recent years by so-called fast fashion retailers such as Forever 21, H&M, and Zara. These fast fashion retailers have been able to go to market faster, delivering fashionable clothes at affordable prices.
In a series of blog posts focused on fast fashion, we'll take a look at the disruptive influence that fast fashion is having on top retailers, how fast fashion is able to deliver trendy, affordable clothing throughout the year to retailers, and the types of societal and environmental impacts that fast fashion has on the world today (as well as the implications for the future of fast fashion). We’ll explore these topics further in a 4-part blog series:
1) The disruptive influence of fast fashion
2) What makes fast fashion different from traditional retail
3) Fast fashion and the supply chain
4) Societal and environmental impacts of fast fashion
The Disruptive Influence of Fast Fashion
While 2013 was a challenging year for retail in general, teenage apparel retailers such as Abercrombie & Fitch, Aeropostale, and American Eagle Outfitters have been hit particularly hard. These retailers, known as the “3As”, have seen their stocks decline by double-digit percentages in the past six months, while the S&P 500 has risen 11.5 percent.
These results are even more striking when contrasted to the performance of some of the top performing fast fashion retailers:
* Forever 21: sales rose 82 percent in the period 2007-2012.
* H&M: saw U.S. sales rise 10 percent in the first half of 2013 across its 269 U.S. stores (including 40 locations opened in 2012)
* Uniqlo: opening six more U.S. stores in 2013, with a goal of having 200 by 2020
* Zara: U.S. sales more than tripled between 2007 and 2012
And why not…when you have a choice of shopping at Abercrombie and buying a plaid shirt for $70 or walking across the street to a Forever 21 store and buying the same shirt for $20, the appeal of fast fashion to the wallets of teens and Millennials becomes clear.
And if competing on a low price point wasn’t difficult enough for traditional retailers, they now have to contend with fast fashion retailers that are adept at getting trends from the catwalk to the sales floor quickly. Practically speaking, this agility allows fast fashion retailers to place their orders much closer to each season (1-2 months in advance as opposed to 7-8 months in advance for traditional retailers).
Fast fashion retailers also maintain a competitive advantage vis-à-vis teenage apparel retailers when it comes to their target market and their ability to appeal to their consumer base. While Millennials make up the majority of shoppers at both traditional and fast fashion retailers, the philosophy of fast fashion makes it a natural fit for Millennials. Millennials are very familiar and comfortable with the rapid pace of change when it comes to fashion, trends, and the ability to get “what they want, when they want it.” This makes fast fashion a natural “fit” with Millennial lifestyles and expectations.
Regardless of whether or not fast fashion represents a fundamental change in retailing or is just the latest trend, traditional apparel retailers will need to adopt the philosophy and approach behind fast fashion in order to remain competitive and relevant, namely the ability to deliver lower priced goods that reflect consumer tastes delivered throughout the year.
Next in our 4-part blog series around fast fashion: a look at what makes fast fashion different from traditional retail.
In the meantime, here are some links to articles on fast fashion that you may find interesting: