Profit
The Profit pillar represents the idea that consumers continue to purchase products at an affordable price, whilst suppliers continue to make the product at a cost which allows them to make a reasonable profit. It is very important for suppliers to consider the state of an economy when pricing their products. When there is an economic boom, this signifies the increasing level of consumer confidence in an economy which allows suppliers to obtain higher profits in relevance to the laws of supply and demand.
One of the biggest contributors to a healthy economy is the fashion industry. The value of the fashion industry was $1.55 trillion in 2021 and the global fashion industry’s worth is expected to reach $1.7 trillion by the end of 2022. Although not the biggest industry, due to the existence of life and health industries, the fashion industry is known to be the biggest e-commerce industry in the world (Radonic, 2022).
With the growing use of technology, it is expected for the fashion industry to seek approaches to online creativity and commerce. Some brands over the past year expanded into the digital metaverse, introducing virtual stores, gaming and digital events (Mckinsey, 2022). This is an example of how fashion businesses should adapt to changes in the operational infrastructure that supports the business to seek the maximum amount of profit and returns (Longdrigan, M. Jenkins, 2018).
Selfridges is a good example of how art and commerce conjoins. The department store enables the exploration of art and culture, balancing it with the consumption of goods. This USP may also attract more customers, resulting in good sales.
A brand must maintain the engagement from consumers during uncertain economic times. Consumers behave in a rational, logical and predictable manner, therefore, during tough times, the level of demand is likely to decrease. When this occurs, brands should attempt to remain competitive in the market, otherwise it may face a huge loss. For example, the fashion industry was affected severely during the COVID-19 pandemic, with many fashion retailers temporarily shutting down. This resulted in many staff losing their jobs, or having to be furloughed by the government (Auld, 2021).
However, a few brands were able to remain competitive by developing their digital marketing strategies during the pandemic to communicate with consumers online. Therefore, to stay competitive, brands should predict consumption behaviours and act accordingly with consideration of the current state of the economy.
REFERENCES
Auld, M., 2021. How has COVID-19 impacted the Fashion Industry? [online]
https://www.rguunion.co.uk/news/article/radar/How-Has-Covid-19-Impacted-the-Fashion-Industry/
Longdrigan, M., Jenkins, J., 2018 Fashion Supply Chain Management
https://libsearch.arts.ac.uk/cgi-bin/koha/opac-detail.pl?biblionumber=1449128
Mckinsey., 2022. State of Fashion pg.18-19
Radonic, D. 2022 The Most Important Fashion Industry Statistics in 2022 [online] https://fashiondiscounts.uk/fashionindustrystatistics/#:~:text=The%20value%20of%20the%20fashion,expected%20to%20reach%20%241.7%20trillion