Profit
Profit arguably is one of the most important pillars from a business perspective out of people, planet and purpose. Profit can be described as “money that is earned in trade or business after paying the costs of producing and selling goods and services” (Cambridge Dictionary). Simply said, profit is the monetary benefit a business receives after selling its goods and services.
The size of the fashion industry is something that is not only hard to determine but also changes according to whether the informal sectors of the economy are being included or not. Generally speaking, the United States of America and China possess the largest apparel retail markets in the world. Before Covid-19 hit the world, the fashion industry was worth $1.7 trillion. During the pandemic, the worth of the fashion industry had decreased to $1.45 trillion, that is by -18.1%. (McKinsey, 2022). Post pandemic, consumers indulged in something termed as ‘revenge-shopping’, bringing up the industry’s worth between $1.5 and $1.7 trillion in 2021. (Fashion United).
The economy is perpetually fluctuating, especially post pandemic, and brands can find it difficult to remain competitive during these uncertain economic times. To help remain afloat, it is important that a brand stay with the trends and keep up with the times. For example, the new way of advertising is through social media and that’s where most consumers look for information nowadays. If a brand did not have a digital marketing team, they would find it very hard to remain profitable. A brand could also use their unique selling point to their advantage and stand out from the rest of the market. Even though good profit is important, it can only be achieved if the consumer is happy. Hence, it is important to make product development decisions based on consumer feedback. (Forbes Finance Council, 2020). Brands also need to be able to bridge the gap between creativity and commerce in order to be competitive.
As Caroline Steven mentioned (Stevenson, 2019), “Nineteenth Century, Charles Frederick Worth, the ‘Father of Haute Couture’ and a keen entrepreneur, recognised the economic benefit of aligning himself with art and creativity over commerce.” (Berry, 2018) Creative directors can bridge the gap between creativity and commerce by creating a balance between skill, that is art, and the business aspect of the company. More often than not, consumers are more likely to buy something that is visually appealing and are displayed in elaborate pop ups and/or flagship stores. This is the creativity aspect of the business. If a brand is creatively strong, they are likely to make a higher profit, which is the commerce aspect of the business.
References:
Profit (no date) Cambridge Dictionary. Available at: https://dictionary.cambridge.org/dictionary/english/profit (Accessed: November 9, 2022).
Global Fashion Industry Statistics FashionUnited. Available at: https://fashionunited.com/global-fashion-industry-statistics (Accessed: November 9, 2022).
State of Fashion 2022: An uneven recovery and new frontiers (2022) McKinsey & Company. McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed: November 9, 2022).
Panel, E. (2020) Council post: 13 tips to balance staying competitive with maintaining cash flow in your business, Forbes. Forbes Magazine. Available at: https://www.forbes.com/sites/forbesfinancecouncil/2020/02/18/14-tips-to-balance-staying-competitive-with-maintaining-cash-flow-in-your-business/?sh=7886696b1f02 (Accessed: November 9, 2022).
Stevenson, C (2019) “(I was there) when it all went down”, in Cronberg, A. (ed) Vestoj issue 9: On Capita
Berry, J. (2018) House of Fashion: Haute Couture and the Modern Interior. London: Bloomsbury