What is Fast Fashion?
Fast Fashion is a business model in the fashion business that relies on bringing the latest trends straight to the consumers in a matter or weeks, instead of the traditional industry cycle that takes months from design idea stage, through production stage and finally to the stores.
Traditional fashion brands and design houses typically reveal new collections and trends twice a year, through the classic Spring/Summer and Fall/Winter fashion weeks. Those designs then appear more than 6 months later in the stores, at their respective season launches.
This cycle takes at least 6 months to:
- Conceptualize the next designs and styles
- Decide about the seasons’ colors
- Choose the seasons’ trends in fabrics
- Create the actual samples that will then be revealed to the public
- Take buying orders from fashion buyers after the shows
- Start the production stage to deliver those styles 6 months later and launch in stores
Fast fashion, on the other hand, piggybacks on this cycle, by taking the trends revealed during the fashion weeks, translating them into different styles and products, and launching them in the form of quick, frequent “product drops” that change every 3 to 4 weeks, and are sold at low prices.
This is facilitated by new technologies in supply chain, data extraction and analysis from the stores, and access to suppliers and manufactures that are ready to produce at lower costs and deliver at faster lead times.
The Secret Sauce
The secret sauce and key to success of the fast fashion business model lies in :
- Accessibility to a larger market, due to affordability
- Higher inventory turns , due to faster, more frequent launches
Despite being characterized by lower margins, due to lower prices, this business model encourages frequent buying by consumers who are interested in what’s latest, and thus turning the retailers’ inventory more frequently, which allows them to profit more from the capital invested this such inventory.
Although fast fashion retailers still follow the traditional Spring/Summer and Autumn/Winter seasons in their calendar, they tend to divide those seasons further into “drops” or “hits”, allowing them to have a new launch almost every month, and still follow the broad seasons.
Consumer Behavior Shift
What has facilitated the rise of this business model is a broader shift in consumer behavior that is breaking away from “the label” in favor of the “the trend“. Many consumers are becoming label blind while shopping for fashion, as long as they can find the right fit and style at the right price.
This same shift is also behind the success of many up and coming DTC brands, that have risen over the last few years, and is causing a strategic threat to the fast fashion model itself, as we will discuss later in this article.
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Fast Fashion Brand Examples
The biggest players in the fast fashion space are Zara & H&M, but a lot of department stores have also started developing their own in-house brands using the same business model, and relying on their vast network of brick & mortar locations for distribution.
Recently, a lot of online brands have evolved as well, such as Fashion Nova and Shein, taking advantage of the accelerated growth in online shopping, and how social media is shaping fashion trends.
Advantages of Fast Fashion
There is no doubt that fast fashion has won such huge ground due to an unmet need in the market at the time of its launching. It has made fashion & its latest trends more accessible to more people, and has created what is known as “the mass market” on the fashion pyramid.
Prior to that, only few people could afford to dress up to the latest trends; and building a decent, stylish, wardrobe was a sort of an “investment”.
Also, due to its fast expansion and the opening of many stores, it has created a lot of employment opportunities and entry level vacancies for many people to start their career, and grow with the industry.
Read Also: Why Retail is so Important?
What is The Problem with Fast Fashion?
The affordability brought by fast fashion depends on the use of cheap materials, that don’t stand the test of time. In fact, while talking to an executive of a popular fast fashion value retailer in the Middle East, he told us that items are made to last only 4 to 5 washes.
This is a lot of waste, and of course is bad for the environment.
What makes it worse, is that those materials are also mostly non-biodegradable, and stay in landfills for years. According to this article by Bloomberg, the U.S throws away 11.3 million tons of textile waste each year; raising the fashion industry’s contribution of carbon dioxide output to 10%.
Another consequence of producing a lot of garments at the cheapest price possible, is how this has led to poor working conditions at many factories those retailers rely on.
All of this has put fast fashion retailers under the microscope and has raised a lot of criticism for the industry. This criticism has pushed some of the main brands to start producing eco-friendly lines and encourage customers to re-cycle their old garments.
While this might solve the materials problem, it still doesn’t address the hyper-consumerism problem, which is a main underlying success factor for such business model.
Challenges: Faster, Cheaper Fashion
According to “The wheel of Retailing“, a hypothesis developed by Malcolm P. McNair on patterns of retail development, new retail models often start will low prices and margins, and as they develop they start increasing their margins, which makes them vulnerable to new disruptors who can afford to operate at lower margins.
With the rise of ecommerce and its accelerated adoption resulting from the pandemic, new fast fashion brands started to emerge.. except that those brands are faster & cheaper.
The Rise of Shein
The rise of Shein has happened so fast, that it has now become the largest fashion retailer in the U.S; with a share of 28%, surpassing H&M at 20% and Zara at 11%.
This fast growth has used the same key success factors we mentioned at the start of this article:
- Accessibility & Affordability
- Fast, frequent turns
Except that Shein could take it a bit further, due to its online-only presence, that allowed it to expand faster, and at the same time allowed it to optimize its inventory better than the competition.
Shein offers lower depths in each style and waits to see the ones that perform well online and then produces more of those. This lower depth gives more space and budget to more styles (higher breadth) and thereby increasing the size of product offering and the varieties to its customers.
Read Also: Depth vs. Breadth of Product Assortment
Close proximity and strong relationships with local factories allows it to create small drops of variant styles, and then optimize based on how they start selling.
This leads to higher inventory turnover, and also less markdowns, due to low inventory at SKU level. It also allows Shein to sell at lower prices from the start, and thereby forming a competitive threat to other fast fashion retailers.
This new type of retail has been labeled as “real-time retail“, indicating how even faster it is than fast fashion, and raising concerns on how this race to the bottom in prices can amplify the labor & environmental problems created by the industry.