Profit
Introduce the Pillar
Profit can be seen as a measure of business success. Profit is the basic result of running a business. Often, making a profit is the main goal of a company. A positive bottom line indicates that the company is healthy and performing well. Profit is the capital that a company can use for various purposes, such as investing in new products, replacing equipment, nurturing employees, etc. With a good profit base, enterprises can have the premise of continuous development. (Indeed, 2020).
What is the size of the fashion industry?
According to a survey by JÚLIA VILAÇA, the global fashion industry has a total workforce of 3.3841 billion, equivalent to a value of 3 trillion US dollars. A survey released in 2019 by the U.S. Joint Economic Council confirmed that in the U.S. alone, consumers spend nearly $380 billion on apparel and footwear, and that the country employs more than 1.8 million people in the industry. This data does not stay the same. The fashion industry continues to grow, with the Asian market alone expected to account for 38% of global apparel demand over the past year. (VILAÇA, 2022).
At the same time, the hugeness of the fashion industry can also be reflected through the companies. According to Forbes, topping the list of the biggest clothing companies is Louis Vuitton Moët Hennessy (LVMH), which includes big luxury brands like Louis Vuitton, Christian Dior and Givenchy, according to Forbes. With a market value of US$194 billion and assets of over US$108 billion, the company is the 73rd largest listed company in the world. (VILAÇA, 2022).
The fashion industry is of global importance in economic, social and other fields. However, the industry desperately needs to change. Discussions need to continue to drive the social, environmental and economic impacts of the industry. The potential of the fashion industry is huge, and it has huge destructive power. The key is to know how to channel its power for good and bring about positive transformation. In other words, making consumers, industry and society aware that it is possible to remain profitable and high income. However, it has to be done in an honest way with less impact on people’s lives and the health of the environment.
How can a brand remain competitive in uncertain economic times?
Despite the dominance of uncertainty during the current global pandemic, for businesses, an economic downturn does not mean an exit from marketing. Erik Clausen suggested that in order to remain competitive the company needs to focus on existing customers, clients and partners. The cost of meeting new clients during times of economic uncertainty can be very high. And pay attention to internal marketing of existing customers, strengthen relationships with them in times of crisis, and gain certain benefits when the market returns. (Clausen, 2020).
As Henry Ford once said, “A man who stops advertising to save money is like a man who stops a clock to save time.” When a recession hits, marketing often cuts budgets. Doing so could cause long-term damage to the brand. A March 2010 study tracked the performance and recovery of 4,700 companies during the 2008-2009 recession. Of these companies, 17% went bankrupt, private or were acquired. About 80% did not fully recover until three years after the recession ended. But 9% thrived. It turns out that companies that reduce costs by focusing on operational efficiency, while investing in growth strategies such as marketing and R&D, are most likely to beat the recession. (Clausen, 2020).
How do creative directors bridge the gap between creativity and commerce?
Creativity and business have never been separated, have always maintained a relationship of mutual influence, and more importantly, their nature is exchange and for profit. For creative directors, it is not enough to only understand art, but also to understand the market, products, and consumers. “Standardization” is an invisible demand that cannot be bypassed. For the business, using the media to support the development of art is a way of publicity with low investment and high return. For artists, investing in business allows them to seek their ideals, ambitions and pursuits in the creative process, and at the same time obtain economic benefits. For creative directors, they need to juggle many things. The purpose of people’s participation in art is often spontaneous and active, and the influence it brings to people is also rooted in the heart, which is also the expected result of business.
References:
Indeed. (2020). “What Is Profit and Why Is It Important?” Available at: What Is Profit and Why Is It Important? | Indeed.com (Accessed: 30/10/22).
VILAÇA, J. (2022). “FASHION INDUSTRY STATISTICS: THE 4TH BIGGEST SECTOR IS WAY MORE THAN JUST ABOUT CLOTHING”. Available at: Fashion Industry Statistics: The 4th Biggest Sector Is More Than Clothing (fashinnovation.nyc) (Accessed: 30/10/22).
Clausen. E. (2020). “Marketing Rules To Follow During Uncertain Economic Times”. Available at: Marketing Rules To Follow During Uncertain Economic Times (forbes.com) (Accessed: 30/10/22).