Profit
The profit pillar entails a certain revenue which companies obtain from selling their products, fashion brands have to think about the pricing and manufacturing costs of their products to determine the retail price and the profit percentage. Suppliers should also take into consideration the current economic state and the amount of disposable income their customers have. The fashion industry is a major contributor towards a healthy economy as it is currently valued at $1.7 trillion as of 2022 (Zippia, Oct 22). Fashion is one of the most important industries in the world, it has a significant place in the global economy and represents the seventh-largest economy (McKinsey 2017). The covid 19 pandemic took a hit on the fashion industry with major retailers being shut down, however, the post covid ‘revenge shopping’ made the industry grow by 18.1% in 2021 (Euromonitor International 2022).
There are various sectors within the industry such as distribution, manufacturing, advertising, retailing, and promoting. As technology has advanced throughout the years this has helped the fashion industry develop and produce items at a rapid speed and cheaper overall. Manufacturing and retailing was disrupted by covid 19, McKinsey business of fashion predicted that the US a7 China would recover as they are the two manufacturing and retailing powers. However, this would be more difficult for Europe as the number of consumers varies leading to the amount of exposure and profit for the brands to differ along with the trends changing. During the past few years as the pandemic hit, economic times have not been stable, brands have faced challenges such as dealing with debt. This has led brands to remain competitive to keep their spot in the industry, to do this they have to focus on marketing and their marketing strategies. Making new content regularly keeps consumers interested and excited about new products, this could include posting things on social media which is a free platform (Horizon marketing, 2022).
Also by doing something new and exciting, this can spark consumer interest, for example by collaborating with other brands, for example in 2020 Gucci collaborating with the outdoor apparel brand North Face, this sparked interest within the community and it was a luxury retailer collaborating with a brand that focused on a different area of apparel. The gap between creativity and commerce is bridged through fashion shows and exhibitions, for example, the Balenciaga SS23 show where it was contextual by an artist, the models walked in a mud pit where the mud was brought from pairs and the guests sprayed with mud scent. This catwalk show sparked a conversation for the brand increasing its popularity and therefore profit.
REFERENCES
Colleen Baum, Pamela Brown, Emily Gerstell, and Althea Peng, (march 26, 2020) perspectives for north Americas fashion industry in a time of crisis,https://www.mckinsey.com/industries/retail/our-insights/perspectives-for-north-americas-fashion-industry-in-a-time-of-crisis
Euromonitor, (2022), (https://fashionunited.com/companies/euromonitor-international)
Horizon marketing, (august 8, 2022), the value of marketing in uncertain economic times,https://horizonmarketing.co/the-value-of-marketing-in-uncertain-economic-times/
McKinsey State of Fashion, (2017 report, McKinsey & BoF, in 2016),https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf
Sky Ariella, (Oct 3, 2022), How much is the fashion industry worth,https://www.zippia.com/advice/fashion-industry-statistics/