Profit
Similarly to virtually any area of enterprise found in today’s economy, the financial stability and success of businesses within the fashion industry can be measured via assessing their profitability. Due to rapidly moving trend cycles and an evident instability of, practically, any brand’s image, “profit” is singled out of the four crucial components of the Fashion Business School as the only one controlled almost entirely through marketing.
The Fashion Industry has been recognized as one of the biggest within the global economy for many years and continues to grow at an exponentially quick rate, currently ranked as the fourth largest sector in the world. Composed of a 3,384.1 million labour force and valued at 3 trillion US dollars, the industry is believed to correspond to a total of 2% of the universal Gross Domestic Product (Vìlaça, 2022). Despite the 18.1% decline in the value of the industry at the start of the Covid-19 pandemic, these statistics are expected to maintain growth, particularly due to the rapid expansion of the e-commerce fashion market (McKinsey, 2022) . A vast majority of sectors within the industry, ranging from the most reputable haute couture establishments to lower end fast fashion chains, are now generating considerably more profit online rather than in stores (The Business Research Company, 2022).
Fig. 1 (Zeppia, 2022)
The aforementioned Covid-19 pandemic heavily impacted how fashion operates by encouraging brands to come up with new marketing strategies to help them remain afloat and in high demand during unpredictable economic times. Gen-Z’s substantial influence over social media in combination with their preference of ethical production has urged brands to re-evaluate their environmental impact and sustainability efforts (Hope, 2022). According to Forbes, 62% of Gen Z prefer to shop sustainably and 54% “are willing to spend an incremental 10% or more on sustainable products” (Petro, 2022). The presence of such high desire for ethically produced goods has prompted a rise in the online resale sector of the fashion industry, including sites like Vestiaire Collective and The RealReal, in turn, stimulating competition with non second hand brands and sites. For instance, luxury online retailer Net-a-Porter has created a consignment service in collaboration with Reflaunt, thus taking a step towards sustainability by allowing buyers to resell preloved items (Net-A-Porter, 2022). Ultimately, brands are expected to implement visible changes to their policies regarding ethical production and consumption in order to retain their status.
Although well thought out marketing is crucial for commercial prosperity, it can often minimise the unique essence of a brand in addition to reducing the value of its artistic identity. Renowned creative directors tend to bridge the gap between commerce and creativity by establishing a unique image of their label that makes it not only exclusive, but also catering to their “demographic’s sense of culture and credibility” (Ahmed, 2013). An excellent example of this is designer Vivienne Westwood. Since establishing her label in 1971, Westwood “has always used her collections and catwalk shows as a platform to campaign for positive activism” (British Fashion Council). Westwood’s public activism for climate change, politics, and sustainability is, no doubt, partially a reason for the brand’s rapid resurgence in popularity amongst Gen Z consumers in recent years.
References:
Ahmed, Ajaz. “Bridging the Gap between Art and Business .” The Guardian, Guardian News and Media, 16 Oct. 2013, www.theguardian.com/media-network/media-network-blog/2013/oct/16/bridging-gap-art-business
“Apparel Market Size 2022 and Growth Analysis.” The Business Research Company, Oct. 2022, www.thebusinessresearchcompany.com/report/apparel-global-market-report
Blachdiani, Anita, et al. “State of Fashion Technology Report 2022.” Edited by Imran Amed, McKinsey & Company, McKinsey & Company, 4 May 2022, www.mckinsey.com/industries/retail/our-insights/state-of-fashion-technology-report-2022
“Global Fashion Industry Statistics.” FashionUnited, Fashion United, July 2022, fashionunited.com/global-fashion-industry-statistics
Hope, Blaise. “How Gen Z Shapes Sustainable Luxury Fashion through Digital.” Sustainability Magazine, 28 May 2022, sustainabilitymag.com/sustainability/how-gen-z-shapes-sustainable-luxury-fashion-through-digital
“How to Sell Pieces From Your Closet With Our Luxury Resale Service.” PORTER: Incredible Women. Incredible Fashion. Every Day., NET-A-PORTER, 15 Nov. 2022, www.net-a-porter.com/en-gb/porter/article-ea4e0fb969278531/fashion/fashion-memo/net-a-porter-reflaunt-resell-service
Petro, Greg. “Sustainable Retail: How Gen Z Is Leading the Pack.” Forbes, Forbes Magazine, 12 Oct. 2022, www.forbes.com/sites/gregpetro/2020/01/31/sustainable-retail-how-gen-z-is-leading-the-pack/?sh=74eb212c2ca3
Vilaça, Jùlia. “Fashion Industry Statistics: The 4th Biggest Sector Is More than Clothing.” Fashinnovation, 18 Feb. 2022, fashinnovation.nyc/fashion-industry-statistics
“Vivienne Westwood: Fashion and Activism.” Google Arts & Culture, British Fashion Council, artsandculture.google.com/story/vivienne-westwood-fashion-and-activism-british-fashion-council/EAWB0Y4apC2qIg?hl=en
Zippia. “28 Dazzling Fashion Industry Statistics [2022]: How Much Is The Fashion Industry Worth” Zippia.com. Oct. 3, 2022, https://www.zippia.com/advice/fashion-industry-statistics/