Profit

Profit

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Profit is the pillar that provides a look at the economic implications of the fashion market. Traditional financial indicators will no longer be relied on to determine the long-term performance of the business. To establish a value-driven organisational culture, profit and purpose must be balanced according to Liz Gee.

One of the largest and most significant industries is fashion. It is responsible for the world economy’s “key value-creating industries” (McKinsey & BoF, 2016). Following the McKinsey 2022 forecast, the ready-to-wear industry’s overall sales in 2021 will be between $1.7 trillion and $2.5 trillion (McKinsey, 2022).

There are numerous sectors within the fashion industry, such as marketing and manufacturing. Manufacturing has transformed throughout the years as a result of technological breakthroughs. As a result, manufacturing performance for the fashion sector is far more sophisticated than previously. As indicated in The State of Fashion report 2022, consumers are becoming more aware of sustainability issues and are requesting information about the materials, production techniques, and employees working, encouraging a growing number of businesses to enhance the sustainability of their supply chains.

Covid-19 disrupted all segments of the fashion industry, including manufacturing and distribution. Thus according to McKinsey, Business of Fashion anticipated that non-luxury and luxury fashion sales may vastly improve in the United States and China. At the same time, growth in Europe might be substantial(McKinsey, 2022). These predictions suggest that improvement differs internationally, according to consumers’ patterns of consumption and economic status. During COVID, the online retail market managed to perform well. The online retail sector saw a considerable surge in demand in 2020. People relied on online platforms such as Tiktok live stream channels to meet their consumer demands because everyone was at home during the lockdown. This resulted in a 48% increase in online retail sales in 2020(Mintel 2022). The internet retail business is predicted to shrink and rebalance as individuals become more cautious of their spending habits as we enter the recent cost of living crisis.   As a result, firms must be especially creative while advertising their products, as the market is highly saturated.

Figure 1: Market forecast all online retail sales (including VAT), 2017-27
Source: ONS/Mintel, 2017-22

A creative director establishes a brand’s creative vision by generating concepts and bringing them to life through methods such as installations.

To overcome the divide between creativity and business, creative directors must have the skill of making their artwork appealing. Many customers want to purchase items with a background story. As a result, brands that communicate a meaningful message through their products are more likely to sell as consumers feel their worth during the process.

Reference：

McKinsey&Company (2016) The State of Fashion 2017. 

Available at: https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20state%20of%20fashion/The-state-of-fashion-2017-McK-BoF-report.pdf 

[Accessed 21 October 2022]

McKinsey & Company(2022) The State of Fashion 2022.

Available at : https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf

 [Accessed 22 October 2022]

Mintel (2022) Online Retailing- UK- 2022

Available at : 

https://reports-mintel-com.arts.idm.oclc.org/display/1153399/?fromSearch=%3Ffreetext%3DFashion%2520Online%2520%25E2%2580%2593%2520UK%2520%25E2%2580%2593%25202022%26resultPosition%3D1

[Accessed 22 October 2022]

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Profit

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Among the four pillars, profit draws attention to the fashion industry’s revenue. Recent events required sustaining a thriving business through unstable times, rethinking business models, and examining the art director’s role as they navigate the changing market.

According to IBIS World (2022), the size of the manufacturing industry alone reached more than 850 billion dollars in 2022. Statista (2021) stated in a recent report that “The revenue of the global apparel market was… 1.5 trillion U.S. dollars in 2021.” Mintel (2022) also shared that the luxury market stands at more than 270 billion euros in 2022.

When examining sector performance, McKinsey (2022) discusses the luxury sector’s resilience as the pandemic less affected most of their customers, “whose funds saved on travel and entertainment were reallocated towards luxury goods” (p.119). Additionally, sportswear was another sector that showed significant growth, as the pandemic led to consumers’ change in focus that “accelerated existing strengths in sportswear, athleisure and outdoor brands” (p.118).

Figure 1: EBITA margins by value segment in 2020, average from 2010-2019, and range from 2010-2019, %. Adapted from “McKinsey Global Fashion Index, The State of Fashion 2022″ (McKinsey, 2022, p. 118, fig 20).  McKinsey & Company (2022). 
Figure 2: McKinsey’s ‘Super Winners’ Performance rates. Adapted from “McKinsey Global Fashion Index, The State of Fashion 2022″ (McKinsey, 2022, p. 120, fig 21).  McKinsey & Company (2022). 

However, other sectors saw earnings drop and fall in revenue. Due to the extensive lockdowns and the dependency on sales from physical stores, the value and discount players saw earnings decline (McKinsey, 2022). “Shoppers also shifted some of their spend on clothing to essential retailers such as grocers” (p.119). With the consequences of lockdowns, these notions also resulted in mid-market fashion players not fully recovering like the rest of the industry.

McKinsey (2022) states that the next two years appear more favourable for the global fashion industry. Nonetheless, “the shakeout is not over as weaknesses exposed during the Covid-19 pandemic will continue to plague the industry” (p.121).

As the market is inherently competitive during steady and challenging times and staying relevant is more complex than ever, decision-makers should consider measures to sustain growth while handling recent supply chain difficulties. Correspondingly, embracing business models suited for accelerated transitions in consumer behaviour can make a fundamental difference, as the players practising them are being rewarded (McKinsey, 2022).

While creative directors used to align themselves with art over commerce to benefit financially, the matter is different nowadays. Modern times illustrate creative directors as suppliers of aesthetic experiences while leading brands to financial profit as they develop their unique markets and attempt to infiltrate new ones, bridging the worlds of art and commerce (Stevenson, 2019).

Figure 3: Examples of contemporary time’s Creative Directors. Adapted from Images from Balenciaga’s Spring 2022 Show (Vogue, 2021), Balenciaga’s Spring 2022 Show (Vogue, 2021), Balenciaga’s first Couture show (Vogue, 2021), The experimental concept space by Gucci – Gucci Vault (Gucci Vault, 2022), and some of Virgil Abloh’s projects at Off-White (DeZeen, 2021).

The creative director leads the design stage, where crucial decisions affecting the supply chain are made (Gwilt, 2020). From selecting materials to deciding the design method and considering circularity or even collaborations, designers face determinations affecting the brand’s creative ethos and financial success. It is also required that designers beneficially spread the label’s message to their target audience as public figures (Mitterfellner, 2019).

Figure 4: An example of certain choices and collaborations as part of the creative director’s role; Palace Skateboards and Gucci Vault’s Recent Collaboration gained massive media attention (Gucci, 2022).

Reference list

DeZeen (2021). Available at: https://www.dezeen.com/2021/11/29/virgil-abloh-design-roundup/ (Accessed: 23 October 2022).

Gucci (2022). PALACE GUCCI. 14 October. Available at: https://www.youtube.com/watch?v=awdE7dF672I&ab_channel=GUCCI. (Accessed: 23 October 2022).

Gucci Vault (2022). Available at: https://vault.gucci.com/en-US/story/enter-vault (Accessed: 23 October 2022).

Gwilt, A. (2020). A Practical Guide to Sustainable Fashion. London: Bloomsbury Publishing USA. Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=6234061 (Accessed: 23 October 2022).

IBIS World (2021). Global Apparel Manufacturing- Market Size2005–2027. Available at: https://www.ibisworld.com/global/market-size/global-apparel-manufacturing/ (Accessed: 23 October 2022).

Mintel (2022). Luxury Goods Retailing – International – 2022. Available at: https://reports-mintel-com.arts.idm.oclc.org/display/1159687/ (Accessed: 23 October 2022).

Mitterfellner, O. (2019). Fashion Marketing and Communication: Theory and Practice Across the Fashion Industry. Taylor & Francis Group. Available at: https://ebookcentral.proquest.com/lib/ual/detail.action?docID=5981798 (Accessed: 23 October 2022).

Statista (2021). Apparel Market Worldwide. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/#dossierKeyfigures (Accessed: 23 Oct. 2022).

Stevenson, C. (2019). ‘(I Was There) When It All Went Down’, Vestoj, Issue 9: On Capital.

The Business of Fashion and McKinsey & Company (2022). The State of Fashion 2022. Available at: https://moodle.arts.ac.uk/pluginfile.php/1463744/mod_label/intro/The_State_of_Fashion_2022.pdf?time=1664132324542 (Accessed: 23 October 2022).

Vogue (2021). Available at: https://www.vogue.co.uk/fashion/article/balenciaga-spring-2022 (Accessed: 23 October 2022).

Vogue (2021). Available at: https://www.vogue.com/article/demna-gvasalia-brings-haute-couture-back-to-balenciaga (Accessed: 23 October 2022).

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Profit

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McKinsey said back in 2017, “Fashion is one of the world’s most important industries, driving a significant part of the global economy. An industry that creates value for the world economy. As one of the four pillars of the fashion industry, profits deeply influence the future of this industry, with global revenues for the p-fashion industry estimated at between $1.7 trillion and $2.5 trillion in 2021 according to Fashion United (Before the Covide-19 pandemic).

The production of raw materials, the creation of fashion items by designers, retail, and advertising and promotion are some of the different industries that make up the fashion industry.    The fashion industry is now dealing with a number of problems, according to the State of Fashion 2020 report from McKinsey.    For instance, the processing of raw materials for the textile industry still contributes significantly to greenhouse gas emissions, and a fifth of industrial water pollution is caused by chemicals like insecticides and dyes.    Additionally, as noted in The State of Fashion report 2022, consumers are becoming more aware of sustainability-related issues and are demanding details about the materials, manufacturing methods, and the people involved, which has led more and more companies to improve the sustainability of their supply chains.

BY Coleem Ramos Best Sims 4 Gucci CC: Clothes, Shoes & Accessories

With the rise of Generation Z and consumers looking more for purpose online, the habits of this demographic are beginning to change the way retail and advertising is delivered. Some fashion brands are beginning to flock to the virtual market where young people are the most numerous, for example the gaming ‘skins’, examples include LV’s collaboration with the character Qiyana from League of Legends, and limited-edition clothing from Moschino or Gucci in The Sims DLC. Also the more recent concept that has emerged – the metaverse. Also being transformed are companies that bring in a large number of young employees, who, having grown up in a more inclusive environment, implicitly promote diversity. Companies that show enough goodwill will gain the support of many people and move closer to success in this age of rapid information flow.

Many artists create art as a hobby rather than as a method of supporting themselves, although commercialization is necessary to spread their work. Today’s most obvious examples of art and business overlap admirably, but they also thrive because of an uncomplicated fit between the audience for the brand and the artwork. Burberry and British music groups get mutual leverage through a shared sense of national style and sexy chic. Fashion labels from Cos to Cartier sponsor contemporary artists and art events because they all tap into a certain demographic’s sense of culture and credibility(Ajax, 2013). Even though the above example is a little too old, it cannot be denied that successful art cannot be achieved without the help of business. In the meantime the benefits of this cooperation are mutual. By thinking more like artists, businesspeople have an opportunity to take a radically new approach, with more freedom, more creativity, and more possibilities（Amy, 2018)

REFERENCE:

McKinsey & Company(2022) State of Fashion 2022: An uneven recovery and new frontiers 

McKinsey & Company(2020) The State of Fashion 2020: Navigating uncertainty

https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion

Fashion United (2022) Global Fashion Industry Statistics

https://fashionunited.com/global-fashion-industry-statistics

Ajaz Ahmed(2013) Bridging the gap between art and business

https://www.theguardian.com/media-network/media-network-blog/2013/oct/16/bridging-gap-art-business

Amy Whitaker (2018)Bridging the gap between art and business

Bridging the gap between art and business
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PROFIT

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Profit is a necessary incentive for commerce to thrive. Its significance is debated in regards to the associations between creative and business industries. Currently, the fashion industry is worth $1.5tr USD (Smith, 2022), and its magnitude suggests great margin for profit, as well as other factors determining this level of surplus including human and economic capital investments. 

All sectors of the fashion industry, including manufacturing and retailing, were disrupted by Covid-19. With McKinsey & Company, Business of Fashion projected that non-luxury and luxury fashion sales would mostly recover in the US and China, but growth would be less imminent for Europe (McKinsey & Co., 2021). Such expectations can imply that performance varies globally, based on differing consumer trends and incomes. 

In unpredictable economic times, such as the Covid-19 pandemic and anticipated recession in Q4, 2022, competitiveness for brands can be derived from greater flexibility (Corner, 2014, p.6). As long as they remain aligned to their heritage, values and target consumer base, brands should consider expanding their offer, and in turn, presence in the fashion industry. For example, Supreme’s collaborations with Pat McGrath, Tiffany & Co., and Louis Vuitton have attracted new audiences to the streetwear label. Through envisioning a youthful yet distinct take on luxury, Supreme has successfully employed visual codes (Mitterfellner, 2019, p.121) such as the iconic red logo and inspiration from skate culture, to build a brand identity strong enough to enable such collaborations, thus enabling their competitiveness despite macroeconomic disruption. 

Figure 1: Supreme x Tiffany & Co. Fall 2021

The capitalistic nature of the global economy has placed fashion brands under pressure to marry creativity with commerce. Several companies have responded by introducing new chief creative officers to boost commercial growth. Burberry appointed Daniel Lee as Riccardo Tisci’s successor, due to his role in sustaining revenue growth of ‘nearly €1.2 billion in 2019’ at Bottega Veneta (O’Connor and Williams, 2022). This was mainly due to his influential footwear and accessories designs, helping to commercially and culturally elevate the brand despite worldwide economic downturn. 

Figure 2: Look 19/63, Balenciaga Resort 2023

It may be argued that no one has unified creativity with commerce better than Demna of Balenciaga. The Georgian designer presented his Resort 2023 collection at the New York Stock Exchange, quite literally portraying the relationship between fashion and business. While sending latex-clad models down the trading floor appears to be an absurd concept, such originality has translated into undeniable success for the fashion house. Off the runway, Balenciaga’s sunglasses and bags are heavily popular with Gen Z and millennials. These accessories are intentionally at lower price points, a conscious commercial decision made to generate greater sales from aspiring customers. Overall, profitability is possible for brands who are unafraid of taking risks without compromising their creative vision, and strike a balance between commercial and artistic success.

REFERENCES:

Business of Fashion, McKinsey & Co. (2021) The State of Fashion 2022. Available at: https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf

[Accessed 17 October 2022]

Corner, F. (2014) Why Fashion Matters. Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=5878041

[Accessed 17 October 2022]

Mitterfellner, O. (2019) Fashion Marketing and Communication: Theory and Practice Across the Fashion Industry. Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=5981798

[Accessed 18 October 2022]

O’Connor, T., Williams, R. (2022) Why Burberry Changed Designers. Available at: https://www.businessoffashion.com/articles/luxury/burberry-names-daniel-lee-chief-creative-officer/

[Accessed 19 October 2022]

Smith, P. (2022) Global apparel market – statistics & facts. Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/

[Accessed 19 October 2022]

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PROFIT

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Profit is an essential outcome of running a business. Making a profit is the main goal of the company. It shows the company is doing well. However, the fashion industry is changing. Many other important factors and values coexist alongside the profit factor to build the most sustainable and developed fashion industry.

Figure 1: Profit (Bui. L, 2022)

Fashion is one of the most important industries. It is holding the “key value-creating” industries for the global economy (McKinsey & BoF, 2016). There was an increase in apparel when the pandemic happened. In 2021, the fashion industry’s worth was approximately 1.55 trillion U.S. dollars. Fashion is not the biggest industry. Although, it is the biggest e-commerce industry in the world. According to Statista, the largest segment belonged to fashion with a revenue of 666 billion U.S. dollars (2022). This segment will increase to over one trillion dollars in 2025 (Statista, 2022). Additionally, one of the potential markets in the fashion industry is ethical fashion. Statista estimates the value of this market will rise by over three billion U.S. dollars in the 2021 and 2025 period.

As a part of e-commerce, social shopping is a vital way for fashion brands to boost their sales and attract customers. Due to Covid-19, it changes consumers’ behaviors. Social networks play a vital role in people’s lives such as shopping, entertainment, and connection. According to a research firm Data Reportal’s The Global State of Digital 2021, about 4.3 billion users (over half of the world’s population) now use social media (Draper, 2022). Therefore, reaching them is an important goal of fashion brands. At the same time, the circular economy is one of the most important sectors of the fashion industry to reduce its footprint. This industry produces around 40 million tons of textile waste into the environment a year. Renewcell partners with brands such as H&M, Levi’s, Beyond Retro’s parent company Bank and Vogue to deliver post-consumer waste to Renewcell.203. They are building a new facility and 60,000 tons of textiles will be recycled. (McKinsey&Company, 2022)

Figure 2: Estimated value of the ethical fashion market worldwide from 2020 to 2025. (Statista, 2022)

The new normal after the pandemic has just begun. While uncertain times, fashion brands need to find the correct direction to overcome competitors. Firstly, reliability is always the most vital point. In every single step during the process, brands should show sustainability in there. Transparency in the production process will gain the customer’s trust and they are more willing to buy the product. Secondly, there are many possible platforms, tools, and technologies for marketers of brands to develop and be open-mind to them (Clausen, 2020). Because with only one click when accessing the platforms, customer can buy their favorite products. The power of technology and its global is unquestionable.

Figure 3: Collaboration: Sterling Ruby & Raf Simons, Vetements & McDonald’s, Simone Rocha x H&M, and Gucci and Balenciaga’s Hacker Project (Bui. L, 2022)

Balancing creativity and commerce is always particularly challenging for creative directors. When designers present themselves as artists, they reveal their unique vision. However, this also protects their desire to live and work creatively. They can market themselves to consumers who also want to buy a work of art rather than mass-produced clothing (Stevenson, 2019). The designers can still keep their impressions on the garment and have the customer satisfied. In addition, collaboration is also an ideal choice for the brands. During the campaign, the impact of the media will help art spread and commercial purposes are also met (Stevenson, 2019). Nevertheless, the coin always has two sides. Before starting the projects, the creative director and brands understand the partner’s value and vision to make the most successful handshake.

Bibliography:

Business Wire (2020) Global Ethical Fashion Market to reach $8.25 billion by 2023 (COVID-19 adjusted) – researchandmarkets.com. Available at: https://www.businesswire.com/news/home/20200619005202/en/Global-Ethical-Fashion-Market-Reach-8.25-Billion (Accessed: October 16, 2022). 

Clausen. E (2020) Marketing Rules To Follow During Uncertain Economic Times. Available at: https://www.forbes.com/sites/forbesagencycouncil/2020/04/03/marketing-rules-to-follow-during-uncertain-economic-times/?sh=166266e54a36. (Accessed: October 19, 2022).

Drapers (2021) The Power of Marketplaces. Available at: https://www.drapersonline.com/guides/the-power-of-marketplaces-report. (Accessed: October 19, 2022).

Drapers (2021) Social Commerce Guide. Available at: https://www.drapersonline.com/guides/social-commerce-guide. (Accessed: October 19, 2022).

McKinsey&Company (2016) The State of Fashion 2017. Available at: https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20state%20of%20fashion/The-state-of-fashion-2017-McK-BoF-report.pdf. (Accessed: October 19, 2022).

McKinsey&Company (2022) The State of Fashion 2022. Available at: https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf. (Accessed: October 19, 2022).

ReportLinker (2018) Fashion E-Commerce Global Market Report 2020-30: Covid 19 Growth and Change. Available at: https://www.globenewswire.com/news-release/2020/07/09/2060323/0/en/Fashion-E-Commerce-Global-Market-Report-2020-30-Covid-19-Growth-and-Change.html (Accessed: October 16, 2022).

Stevenson, C (2019) “(I was there) when it all went down”, in Cronberg, A. (ed) Vestoj issue 9: On Capital. Available at: https://moodle.arts.ac.uk/pluginfile.php/1463893/mod_label/intro/Week%204-Pre%20seminar%20read%20-Stevenson%20%28I%20was%20there%29%20when%20it%20all%20went%20down.pdf (Accessed: October 18, 2022).

Statista (2022) Revenue of the apparel market worldwide from 2013 to 2026. Available at: https://www.statista.com/forecasts/821415/value-of-the-global-apparel-market#:~:text=Revenue%20generated%20by%20the%20global,approximately%201.55%20trillion%20U.S.%20dollars. (Accessed: October 19, 2022).

Statista (2022) Fashion e-commerce worldwide. Available at: https://www-statista-com.arts.idm.oclc.org/study/111688/fashion-e-commerce-worldwide/. (Accessed: October 19, 2022).

UK fashion industry statistics (2022) FashionUnited. Available at: https://fashionunited.uk/uk-fashion-industry-statistics (Accessed: October 16, 2022).

Image reference list:

Bui. L (2022), Profit, (Collage).

Bui. L (2022), Collaboration: Sterling Ruby & Raf Simons, Vetements & McDonald’s, Simone Rocha x H&M, and Gucci and Balenciaga’s Hacker Project (Collage).

Statista (2022), Estimated value of the ethical fashion market worldwide from 2020 to 2025. Available at: https://www-statista-com.arts.idm.oclc.org/statistics/1305641/ethical-fashion-market-value/ (Accessed 19 October 2022).

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Profit

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By Sophia Pandeli

The pillar of profit is one of the four pillars in fashion business school, profit is what allows the fashion industry to thrive on being bigger and better. Profit is an extremely important factor in the fashion world as without profit the fashion industry would collapse. The value of the fashion industry in 2021 reached $1.55 trillion.

Fashion is one of the largest industries in the world, in fact, the seventh-largest economy in the world. In 2021 the revenue from the fashion industry was $1.7 trillion dollars and before COVID – 19, the global fashion industry’s revenue was estimated between $1.7 and $2.5 trillion (Fashion United, 2022).

There are various factors within the fashion industry for example manufacturing, distribution, marketing, retailing, advertising, and promotion. Manufacturing has changed over the years due to technological advances that are available. This means the performance of manufacturing for the fashion industry is faster, better and in the long run – cheaper. Ideally, the supply and the demand of goods should be balanced (Mitterfellner, O. 2019) to ensure the manufacturing process won’t create too much or too little goods for the industry so that there is the perfect amount of goods for consumers to buy to create profit instead of a loss. Furthermore, distribution in the fashion industry in 2022 also relies on technology as e-commerce creates profit for the fashion industry. In ‘Glossy’s Annual Report on the state of fashion sales and distribution channels in 2022 – owned websites were the most common distribution channels, at 87%. The second was retailer stores, at 52% (Lu, L. 2022). Retailing’s performance grows due to e-commerce and expands the fashion industry’s revenue. In addition advertising and promoting have also become easier due to how popular and engaging social media and online websites are globally and will increase the performance advertising and promoting has for the fashion industry.  

E-commerce fashion 

A brand can remain competitive in uncertain times by having a strong unique selling point that appeals to the target market the business is advertising to. Having a strong unique selling point will give a brand a huge competitive advantage in comparison to other brands as it will appeal to consumers and grow the brand because of this even in uncertain economic times. 

Creative directors bridge the gap between creativity and commerce by thinking like an artist so that when thinking about commerce it’s with a creative approach to ensure the business is intriguing and desirable for consumers to want to purchase from. This gives the business a friendly image that isn’t just about business advantage but also about creating products that will be loved by consumers (The Meaning Team 2018).

– Fashion United (2022) 

Global Fashion Industry Statistics, fashionunited.com. Available at: https://fashionunited.com/global-fashion-industry-statistics. 

[Accessed 19 October  2022]

-Lu, L. (2022) 

Glossy Annual Report 2022: The state and future of fashion brand distribution, Glossy. Available at: https://www.glossy.co/fashion/glossy-annual-report-2022-the-state-and-future-of-fashion-brand-distribution/ 

[Accessed 19 October 2022] 

  • –Mitterfellner, O. (2019) Fashion Marketing and Communication. Routledge.

[Accessed 20 October 2022]

– Radonic, D. (2021) 

The Most Important Fashion Industry Statistics in 2021, Fashion Discounts.

Available at: https://fashiondiscounts.uk/fashion-industry-statistics/.

[Accessed 19 October  2022]

  • – The Meaning Team (2018)

Bridging the gap between art and business (2018) Meaning Conference

Available at: https://meaningconference.co.uk/blog/bridging-gap-between-art-business.

[Accessed: 20 October 2022]

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Profit

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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. 

Art at Selfridges

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). 

BBC, ShopperTrak, 2021 Huge drop in shoppers due to COVID-19

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 

https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2022/the-state-of-fashion-2022.pdf

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

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