When asked what the fashion industry is to people, most relate just to the creative side of it and forget that this is one of the biggest industries in the world and, if ranked, would represent the seventh-largest economy (McKinsey,2017). It has many sides: marketing, design, retail, production, management, and social responsibilities… Even though fashion brands can love creating and producing, most of them are more focused on the profit they will make out of it. The growth of the fast fashion movement, aided by social media, is outpacing the growth of the sustainable fashion movement. Fashion consumers buy over 80 billion new pieces of clothing annually, making it profitable, over 400% more than what we consumed just two decades ago (fashion united, no date), making it profitable. As a side of the positive revenue, the environment suffers from overconsumption. (Henthorn, J., & Ulasewicz, C, 2015).
Before the 2020’s pandemic, the fashion industry’s global revenue was estimated between $1.7 trillion and $2.5 trillion ( fashion united, no date), and after, according to Euromonitor (2021), the global apparel and footwear market size shrunk in 2020 by -18.1% (to $1.45 trillion). Nevertheless, with that came changes in how brands produce and their selling methods; e-commerce was already rising before covid, but it had a significant boom, accounting for nearly 20% of retail sales worldwide. Nowadays, if the brand does not have an online selling platform, they are behind its competitors; most luxury companies see that they need it to adapt their ways of selling and communicating with their customers. With this increased exposure, companies can create new trends in short periods and sell more and more clothing. There are too many seasons and fashion shows to keep track of, and fast fashion retailers receive shipments of new styles daily. (Henthorn, J., & Ulasewicz, C, 2015) Brands have started changing their values to reach the audience and amplify by using social media platforms, being more sustainable and transparent because if they do not keep up, competitors will. Besides that, creative directors have to produce more daily collections rather than just statement pieces to sell. They are translating haute couture designers’ creations into wearable clothing. Nowadays, people want to relate to people, not big celebrities. That is why creating fashion is an exciting, challenging, and often risky business, but solid business models and operational work underpin this highly creative industry. (Grose, Virginia, 2021)
References:
Hethorn, J., & Ulasewicz, C. (Eds.). (2015). Chapter 9-Economic impact of textile and clothing recycling Pages: 204–230
Fashion united ( no date) Global fashion industry statistics. https://fashionunited.com/global-fashion-industry-statistics
Fashion united (2021) Euromonitor https://fashionunited.com/companies/euromonitor-international
McKinsey (2021) State of Fashion 2022: An uneven recovery and new frontiers
Grose, Virginia (2021) A Practical Guide to the Fashion Industry : Concept to Customer, http://ebookcentral.proquest.com/lib/ual/detail.action?docID=6934124.
Profit is an essential factor that allows the fashion industry to succeed. In 2021 the size of the fashion industry reached around $1.5 trillion with the prediction for it to increase by $500 billion by 2026.
Revenue of the apparel market worldwide from 2013 to 2026 (in billion U.S. dollars:
Fig. 1- (Statista, 2022)
As seen in figure 1, in 2020 the apparel market saw about a 12% decrease in revenue from the previous year. In these uncertain times brands have had to make changes to be able to continue to operate within the market; due to the closure of stores, many companies have had to rely on their e-commerce and marketing to be able to reach their target consumers. Brands such as Irene Neuwirth, a jewelry designer used her e-commerce website to be able to continue to sell her products online during the pandemic, she also engaged with customers and/or future customers on her social media platforms, this allowed her to create relationships with the consumers. This allowed her brand to continue to make profits without being affected by the economic crisis.
Consumers such as gen z look for brands to be transparent about their values and beliefs, such as their sustainability goals, this could be done by brands being more active on social media or brands working with bloggers, which allows brands to be able to expand their engagement and work with bloggers that have the same beliefs and values as them. Brands can make profits as bloggers can influence their audience to buy the goods, as the audience may want to copy the blogger and trust their opinion.
In the fashion industry, there are many different sectors that perform different tasks such as manufacturing, marketing and retail. However, each sector is performing differently; the manufacturing sector is performing poorly as the ‘fast fashion’ business model has been pushing over-consumption which creates negative environmental impacts, but with high demand for cheap clothing, materials used will be worse for the environment as they are less likely to be able to be recycled. Sectors such as marketing however are performing well, with trends and technologies continuing to change brands can continue to successfully market their products in new ways to stay relevant and connected to the consumer, which can increase overall sales for the brand.
To overcome the bridge between creativity and commerce is that creative director should integrate both factors when making their art. However, by thinking more creatively, it allows for commerce to have a different approach to business by having more freedom and creativity and therefore the art can appeal to the consumer as the brand doesn’t focus on just the commerce aspect of the design process.
Profit is one of the fashion business pillars, relating mainly to the financial aspect of the fashion industry. The fashion industry is key contributor towards a healthy economy, ‘if it we’re ranked alongside individual countries GDP the global fashion industry would represent the seventh largest economy in the world’ (Fashion United, 2022). It’s difficult to measure the size of the fashion industry, particularly due to the fact how rapidly the industry changes, ‘about 7% of companies left the market entirely, either due to financial distress or because they we’re bought by rivals’ (McKinsey & Company,2021), along with ‘3,000billion textile and garment companies are entering the market daily’ (Vilaça, J.,2021)
There are multiple sectors within the fashion industry, such as manufacturing, distributing and retailing. Advancements on technology has enabled many start-up brands and new production cycles. For example, ‘mass-market players will begin to follow suit, aiming to respond more rapidly to trends and consumer demand. The result is likely to be a rise in just-in-time-production, reduced levels of overstock and an increase in the importance of small-batch production cycles’(McKinsey & Company,2021). Therefore, technology and shifting consumer needs has enabled quicker, more efficient production and developments in understanding consumer behaviour for the manufacturing sector of the fashion industry. However, ‘According to the Council for Textile Recycling (CTR), the average American throws away 70 pounds of apparel products per year’ (Hethorn and Ulasewicz, 2015), showing a linear waste economy when a circular economy is needed to be more sustainable and environmentally conscious.
The recent pandemic has created instability within the economy along with major problems for certain businesses, for example some brands we’re not able to remain competitive during these times and lost their spot in the industry, forcing them to close down such as Topshop. A brand can remain competitive in uncertain economic times by focusing on their existing customers and keeping their brand loyalty towards them, communicating with customers/clients regularly. ‘There are a ton of studies that show the higher cost of acquiring a new customer relative to nurturing a current relationship’ (Clausen, E. 2020).
Creative directors bridge the gap between creativity and commerce through fashion shows/ exhibitions. For example, the Moschino spring/summer 2021 show, Jeremy Scott, the creative director fitted miniature dresses on mannequins 2 feet tall ‘the exhibition featured 237 looks, opening at The Louvre in Pairs and raising millions of francs for war relief’, showing by being creative and doing something unique can increase a brands profit or in the case of this show raise more money. ‘The exhibit eventually went on to tour the world and is currently part of the Maryhill museum of arts collection’ (Meyer, M. 2022).
(Meyer,M. 2022)
Reference list
Amed, I., Balchandani, A., Beltrami, M., Berg, A., Hedrich, S. and Rölkens, F. (2019). Fashion on demand. [online] McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/fashion-on-demand.
Clausen, E. (2020). Council Post: Marketing Rules To Follow During Uncertain Economic Times. [online] Forbes. Available at: https://www.forbes.com/sites/forbesagencycouncil/2020/04/03/marketing-rules-to-follow-during-uncertain-economic-times/?sh=75e463a4a36e [Accessed 24 Oct. 2022].
Fashion United (2022). Global Fashion Industry Statistics. [online] fashionunited.com. Available at: https://fashionunited.com/global-fashion-industry-statistics.
Hethorn, J. and Ulasewicz, C. (2015). Sustainable fashion : what’s next? : a conversation about issues, practices and possibilities. New York: Bloomsbury, Fairchild Books, An Imprint Of Bloomsbury Publishing Inc.
McKinsey & Company (2021). The State of Fashion 2022: In search of promise in perilous times | McKinsey. [online] McKinsey. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion.
Meyer, M. (2022). 29 BEST Fashion Shows Of All Times (Up To 2022). [online] the VOU. Available at: https://thevou.com/fashion/fashion-shows/#moschino-2021 [Accessed 24 Oct. 2022].
Vilaça, J. (2021). Fashion Industry Statistics: The 4th Biggest Sector Is More Than Clothing. [online] Fashinnovation. Available at: https://fashinnovation.nyc/fashion-industry-statistics/.
“Fashion is one of the world’s most important industries, driving a significant part of the global economy. It is one of the key value-creating industries for the world economy.” stated McKinsey in its State of Fashion 2017 report (2016). As one of the four pillars, profit is the pillar of the fashion industry. Before the Covid-19 pandemic, the fashion industry global revenue was estimated between $1.7 trillion and $2.5 trillion (McKinsey analysis, 2019).
The fashion industry as the world’s fourth largest industry has a strong market. According to Fashion United (2022), the industry has a labor force of 3,384.1 million. Its value is equivalent to 3 trillion dollars. That means, it corresponds to 2% of the world’s Gross Domestic Product (GDP).
The fashion industry consists of several key sectors. Fashion design and manufacturing translate some new fashion trends into concrete fashion items for the public to see. Fashion retailers buy products from manufacturers and sell them. Fashion marketing is the process of managing the product flow to maximize the profitability of the brand and the company.
What can a brand do to stay competitive in this uncertain economic climate? Firstly, I think brands have to have unique selling point in order to stand out in the same space. In addition, capturing the target customers of the brand is also an indispensable way. Through some brand innovation and marketing strategies to maintain a good relationship with these customers. Finally, the brand should keep up with the current trend, cater to GenZ’s taste, and adapt to uncertain factors in order to stand firm.
Designers try their best to balance commerce and creativity in the development of a brand. A brand without profits is like a brand without a pillar. Marni x Uniqlo is a good combination of profit and innovation.
Marni is known as a luxury fashion brand for its bright colors, graphics and bold stripes, while Uniqlo is favored by consumers for its affordable comfort. The cooperation between the two brands not only follows the current fashion trend but also has a high cost performance ratio, which has attracted a large number of consumers. At the same time, it also became famous. It combined creativity and commerce perfectly, and gained a good influence in the uncertain environment. “Itcombines impeccably crafted clothes with MARNI’s offbeat and life-embracing spirit. I really hope that wearers feel good, that they feel themselves, that they feel free” says Creative Director of Marni, Francesco Risso(2022).
Marni x Uniqlo 2022SS look
Jackson,C (2022) Marni X Uniqlo Is The Brightly Coloured, Bold And Joy-Bringing Collab We All Need This available at: https://www.elle.com/uk/fashion/what-to-wear/a39837587/uniqlo-marni-collaboration/ (accessed on Oct 23th)
McKinsey & BoF(2016) McKinsey State of Fashion 2017 report available at: https://fashionunited.com/global-fashion-industry-statistics (accessed on Oct 23th))
McKinsey analysis (2019) McKinsey report ‘State of Fashion 2022: An uneven recovery and new frontiers’ available at: https://fashionunited.com/global-fashion-industry-statistics (accessed on Oct 23th))
Vilaca,J(2022) FASHION INDUSTRY STATISTICS: THE 4TH BIGGEST SECTOR IS WAY MORE THAN JUST ABOUT CLOTHING available at: https://fashinnovation.nyc/fashion-industry-statistics/ (accessed on Oct 23th))
Uniqlo (2022) A closer look at the UNIQLO and MARNI Spring/Summer 2022 collection available at:https://www.uniqlo.com/uk/en/contents/collaboration/marni/22ss/article/02/ (accessed on Oct 23th)
The profit pillar in the fashion business school discusses economy being less about monetary value and more about it being a series of systems through which humanity provisions the requirements of life and society. The economic components are known as actors, made up of individuals and households, human-made, being goods and services and lastly, planet-made, such as plants and animals. Capitalism is also discussed within this which is an economic system using finials, human and planetary resources to produce goods and services to supply the demand of consumers. The fashions industry’s current size sits at $1.7 trillion in 2022. The global fashion industry’s profit is expected to fall by 93% in 2020. Globally the fashion industry has been valued at $2.4 trillion (McKinsey state of fashion). (https://fashiondiscounts.uk/fashion-industry-statistics/)
Mckinsey State of Fashion 2017 graph on the economic changes in fashion
According to Forbes May 2020 report on the world’s largest apparel companies, luxury brands such as Louis Vuitton, Christian Dior and Givenchy has the biggest market value of $194 billions making it 73rd largest publicly traded organisation in the world. Sportswear company Nike finished is ranked 244th largest publicly traded company in the world, with Adidas ranking among top 400 with more than $25 billion in sales and athelisure brand Lululemon ranking 1209th with nearly $4 billion sales. (https://fashinnovation.nyc/fashion-industry-statistics/)
Mckinsey State of Fashion report 2017 sates ‘Companies are adapting to new consumer priorities, and digital is providing a nexus for growth’. In order for a brand to stand out remaining competitive it needs to establish a strong identity that is shown to be consistent throughout the brand. Customers are beginning to factor in sustainability into their purchasing as reports such as UNECE 2018 on sdg’s (unece.org/forestry/news/fashion-environment) shows that 10% of global carbon dioxide emissions come from the fashion industry. Reports such as these have made consumers more aware of their carbon footprint and therefore are wanting to shop more sustainable where they can; therefore in turn may search for a brand with sustainability values.
Charles Frederick Worth who is known as the grandfather of haute couture aggressively marketed himself and the clothing revolutionising women wear for everyday use. He was the first to use real life models in his studio for fittings, recognise the use of magazine marketing and began to sew his signature into clothing as if it was a piece of art.
Worth, caligraphy label on a cotton waistband, c.1910
Virgil Abloh, the creative director of ‘Off White’ bridged this gap by representing the importance of youth culture. Abloh took normal objects and transferred them into a fashion accessory. HIs collaboration with Nike in 2017 used an everyday item of a zip tie on the shoe naming the date and creation of the product. Creative directors must look at the cultural economy to gain a profit.
Virgil Abloh collaboration with Nike Air Max using ideas from street and everyday objects into fashion
As John Hawkins observes, “creativity is not new and neither is economics, but what is new is the nature and extent of the relationship between them, and how they combine to create extraordinary value and wealth.” The idea of a ‘cultural economy’ into which these activities and personas exist, provides a ’critical tool for grasping the dynamics between art and commerce.’ (Slowinska, 2014: p 239 – 241). Creative directors must look at the three capitals discussed by Pierre Bourdieu 1993 (Richardson, J., Handbook of Theory and Research for the Sociology of Education) Cultural, the knowledge of culture acquired through upbringing and education as breaking that down into fashion capital of your knowledge in the fashion world, Social, who you know and your social networking groups and economic, how much money you have.
‘Profit’ is the third pillar within the fashion business school. Profit is defined as “money that is earned in trade or business after paying the costs of producing and selling goods and services”(Cambridge dictionary,2022). Profit and the economy are a series of systems through which humanity provisions the requirements of life and society and therefore without it the industry would collapse.
Fashion is one of the key industries, which contributes to a large amount of the overall global economy. The fashion industry has no specific size or scale but can be measured through its value and prices. “If it was ranked alongside individual countries, the global fashion industry would represent the 17th largest economy in the world” (McKinsey, 2017). In 2021 before the pandemic, the revenue of the fashion industry was estimated between $1.7 trillion and $2.5 trillion (Fashion United, 2022). As the industry is so fast-paced as well as the fast fashion movement is amplified it’s difficult to measure the true size of the fashion industry.
Within the fashion industry, there are multiple sectors both performing well and extremely poorly. Due to today’s climate manufacturing is performing badly. Brands are mass-producing garments made from cheap materials as well as being constructed poorly. Fabrics such as polyester, and oil-based synthetics have been bleached, dyed and dipped in chemical baths which causes a large negative impact on the environment. Marketing is a sector performing well as it can empower brands to stay longer and stronger in the minds of their buyers. Digital marketing allows brands to reach their target market as well as have a strategy to increase their reach and audience.
During uncertain economic times, brands will need to change their ways of thinking to remain competitive. Brands can often underestimate the power of marketing and the importance of having a unique strong selling point. During Covid 19 brands had to shift from focusing on profit and growth and invest in the power of marketing and social media. As it was an uncertain time it was vital to be present and interact with your customers to increase your engagement.
Figure 1 : Ikea x OffWhite collection (Highsnobiety, 2022)
Virgil Abloh is an American Fashion designer and entrepreneur and founder of OFFWHITE. Describing his brand as “the grey area between black and white as the colour off-white” (Varsity, 2022). After founding Off White in 2013 he later did a collection with Ikea to create the IKEA x OFFWHITE collection. The collaboration incorporated IKEA’s well known furniture and Virgil’s designs and was created to attract a younger audience. Similarly, Charles Frederick Worth Known as the “Father of haute couture” (The Met, 2004) dominated Parisian fashion as he focused on art and creativity over commerce, making him the first creative director to define the gap between creativity and commerce.
References:
Amed , I. (2022) State of Fashion 2022: An uneven recovery and new frontiers, McKinsey & Company. McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed: October 24, 2022).
Cambridge University Press (2005) Profit, Cambridge Dictionary. cambridge . Available at: https://dictionary.cambridge.org/dictionary/english/profit (Accessed: October 24, 2022).
Environmental sustainability in the fashion industry (2021) Geneva Environment Network. United Nations . Available at: https://www.genevaenvironmentnetwork.org/resources/updates/sustainable-fashion/ (Accessed: October 24, 2022).
Global Fashion Industry Statistics (2020) FashionUnited. fashion united . Available at: https://fashionunited.com/global-fashion-industry-statistics (Accessed: October 24, 2022).
Krick, J. (2004) Charles Frederick Worth , Metmuseum.org. Metropolitan museum of art . Available at: https://www.metmuseum.org/toah/hd/wrth/hd_wrth.htm (Accessed: October 24, 2022).
McGarrigle, W.B.L. and Editor, L.M.G.N.& C. (2019) Everything you need to know for the virgil abloh x IKEA drop Today, Highsnobiety. Available at: https://www.highsnobiety.com/p/virgil-abloh-ikea-collaboration-best-look/#:~:text=IKEA%20x%20OFF%2DWHITE%20release,November%201%20at%2010%20a.m (Accessed: October 24, 2022).
Morris, E. and Morris, E. (2022) The Life and Death of Virgil Abloh, Varsity Online. Available at: https://www.varsity.co.uk/fashion/22623 (Accessed: October 24, 2022).
Smith, P. (2022) Topic: Apparel market worldwide, Statista. stroer media . Available at: https://www.statista.com/topics/5091/apparel-market-worldwide/ (Accessed: October 24, 2022).
Taitler, R. (2020) Mass production in the fashion industry: How quantity outweighs quality and leads to waste and financial loss – 3D insider: Optitex blog, 3D Insider | Optitex Blog. Available at: https://3dinsider.optitex.com/fashion-quantity-outweighs-quality/ (Accessed: October 24, 2022).
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.
The People pillar explores the relationship between brands and their stakeholders – their interactions and how such interactions affect protocol and production. A recent surge of diversity and inclusion has been apparent in the fashion business industry. A need for change that included those of all races, ages, sizes, genders etc. Gen-Z is built up of those born in 1997 to 2010. With roughly 2.47 million Gen-zers worldwide, the generation takes up about a third of the world’s population. Following the Covid-19 pandemic, a sixth of Gen-Z consumers have adopted a more fashion conscious behaviour (Vogue Business, 2021.) Focusing on a more sustainable way of shopping, Gen-Zers have begun to prefer businesses that take steps to be more sustainable. Following these new behaviours, brands have taken a step towards a better future. For instance, Balenciaga collaborated with the World Food Programme to ‘draw attention to a recent spike in global world hunger’ by releasing a new line of clothing and accessories, donating 20% of sales to the WFP. This new line emphasised WFPs slogan ‘Saving Lives, Changing Lives’ by integrating it into Balenciaga’s archetype, highlighting issues in the socioeconomic climate of the planet. (Balenciaga.com, 2019) In order to attract the generation, adapting to their hobbies and pastimes, immersing themselves into the gen-z day to day life. For instance, Louis Vuitton released a mobile game, ‘LOUIS THE GAME’ (Highsnobiety, 2021) Those born into Generation Z were also born into the new age of phones and digital media, and so brands indulging into this era as a marketing tactic appeals to said generation. Dubbed ‘addictive’ by Highsnobiety, Louis Vuitton have appropriately catered to their key people, the consumers. A key skill needed to sustain a successful fashion brand is adaptability – as Drapers (2022) found, Gen Z consumers are seeking out ‘fun’ elements that Millenials aren’t after.
Drapersonline.com, 2022 PayPal, V.B.for (2021) Gen Z shopping trends uncovered, Vogue Business. Vogue Business. Available at:
https://www.voguebusiness.com/consumers/gen-z-shopping-trends-uncovered-pay-pal (Accessed: October 21, 2022).
Balenciaga -World Food Programme (2019) World Food Programme. Available at: https://www.balenciaga.com/en-us/world-food-programme (Accessed: October 21, 2022).
Northman, W.B.T. and Editor, T.N.N. (2021) Louis Vuitton’s new game is better than ‘fortnite’, Highsnobiety. Available at: https://www.highsnobiety.com/p/louis-vuitton-nft-game/ (Accessed: October 21, 2022).
Moran, G. (2022) Gen Z and millennials 2022, Drapers. Available at: https://www.drapersonline.com/guides/gen-z-and-millennials-2022 (Accessed: October 21, 2022).
A large part of the success of an enterprise depends on profit, which is a reflection of the effectiveness of each enterprise’s operations, and the final outcome of the enterprise is also reflected in the profit point. Profit is a key factor driving the market economy and each business is also a key point that affects each individual and society as a whole. Profit is also one of the four pillars of the fashion industry.
“The fashion industry is the key industry that drives the global economy, that creates the world economy and is one of the most important industries in the world. Before it was affected by Covid-19, the fashion industry generated between $1.7 trillion and $2 buy billion in global revenue (McKinsey, 2017). The fashion industry has brought huge profits to society and has drastically boosted socio-economic development.
Figure 1: Revenue of the apparel market worldwide from 2013 to 2026（Statista，2022）.
The root of profit is human labour, and the level of labour density set in the fashion industry is pretty incredible. The fashion industry employs over 300 million people in the design, distribution, retail, textile and production sectors (The McKinsey Download Hub, 2019). The availability of a large workforce has increased the total volume of production, which has resulted in the global fashion industry producing over 100 to 150 billion garments annually.
The fashion industry is divided into several sectors, which are market research, design, production, marketing and promotion (Admin, 2021). In modern times the fashion industry is also strongly developing the e-commerce sector. Each new generation of consumers has its own value judgement, and the main consumers have shifted to millennials and Gen Z. Using the internet to shop is now the main consumption pattern of Gen Z. The fashion e-commerce segment with the most users is clothing. The global fashion e-commerce market is worth US$668.1 billion by 2021 (Fashion E-commerce Global Market Report, 2022). A large number of luxury and fashion brands have expanded into the e-commerce space. For example, Gucci has partnered with Farfetch to achieve 90-minute delivery. There is also Instagram’s partnership with BigCom-merce and Shopify to add sales functionality to social media. The marketing department understands the needs of consumers and uses the internet significantly for promotion. A large number of advertisements are posted on the internet to enhance exposure and thus attract consumers.
In an unstable economic climate, fashion brands want to remain competitive. The first thing that brands can do to get the most tangible results is to reduce prices. With the economy in a bad state, consumers do not have the money to pay for expensive fashion items. The only way to remain competitive is for brands to lower their prices or open discount shops. Luxury goods can be sold in both discount and regular-priced shops. The regular-priced shops can maintain the brand’s premium image, while the discount shops can bring in a good profit, thus balancing the brand’s profitability and remaining competitive.
The Burberry Group has already begun to reposition and transform the brand, and from 2018 Burberry will begin to launch a new Drop model on a monthly basis, with a limited number of new products available on Instagram, WeChat, Line, etc. The Burberry Group has found a new sales model to increase the brand’s buzz by opening a hunger campaign on social media. The Group’s adjusted operating profit rose to 8% year-on-year at constant exchange rates to £178 million (Fine Textiles, 2018). Creative directors need to plan campaigns that are in line with the brand’s philosophy, and brand culture and that appeal to contemporary consumer perceptions and capture the consumer’s consumer philosophy. Creating innovative products and marketing techniques is the only way to make a profit. For example, if Gen Z is looking at sustainable products, the creative director will need to come up with solutions that use green and recycled materials, which will also reduce material costs in production and increase profitability.
Reference list：
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McKinsey & Company (2021). The State of Fashion 2022: In search of promise in perilous times | McKinsey. [online] McKinsey. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion [Accessed 24 Oct. 2022].
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This pillar is an important concern for every business. At the same time, a business must make profits in a way that takes the last two pillars into account. A business needs to be consistent in making a profit, but it is not encouraged to make a profit at all costs. This pillar appears under corporate governance under the economic, social, and governance (ESG) criteria. Good corporate governance practices encourage alignment of interests between a company’s shareholders, board of directors and management team. Such an approach gives consumers or investors confidence that the company’s systems are transparent and efficient. Companies should avoid engaging in illegal practices that harm society and the environment. It should also resolve conflicts of interest between stakeholders in a fair and transparent manner (Colson, 2022)
（fashionunited.com）
The largest retail markets in the world are China, the US, the United Kingdom, Germany and Japan. The US accounts for 24.67% of the total global economy, China has a share of 17.39%, Japan a share of 5.97%, Germany a share of 4.54% and the UK makes up 3.26%. China and the United States are the two largest apparel trading countries. China is the number one exporter of clothing, while the United States is second largest importer. According to Euromonitor and McKinsey, the fashion industry was $1.7 trillion and $2.5 trillion before the Covid-19 pandemic. The Covid-19 pandemic was affected the fashion industry. Global apparel and footwear market size shrunks by 18.1% in 2020, according to Euromonitor. And McKinsey states that the fashion industry suffered a 20% decline in revenue in 2019-2020 (fashionunited.com）
（fashionunited.com）（Posner, 2011)
The fashion market is segmented into specific divisions, so the company is able to better analyze market data and monitor business results more effectively. This chart gives the main markets and product sectors in which it is available, such as women’s wear, men’s wear, children’s wear and accessories (Posner, 2011, p. 10) But the key sectors of the industry of fashion designing are the production of textiles, designing of textiles, fashion designing and manufacturing, fashion marketing and media. In the textile industry, a large number of manufacturers produce different types of fabrics for the fashion industry. Natural fibres including wool, cotton, silk and linen are widely used in the fashion industry. Nowadays the whole of humanity is concerned about sustainability and eco-friendly textiles are very popular in the fashion industry. There are different design methods for different types of textiles. For example, textiles are coloured with a variety of fabric paints and pigments. With the addition of colour, many textiles are decorated or designed into creative embroideries and patterned paintings. The process of fashion marketing is simply managing the flow of merchandise from the initial design and selection for production to presenting the product to the retail customer in order to maximize the company’s sales and profits. Successful fashion marketing depends entirely on understanding the needs, choices and desires of customers and providing them with products that meet their needs. Finally, the media is a very good platform to promote and market the fashion brand in a way that gives it more visibility (Kumar, 2022)
(McKinsey & Company, 2022)
The fashion industry is dealing with new constraints, such as the impact of Covid-19 and economic transformation, and companies must introduce new innovative models and value strategies to meet the challenges of future business models. “Don’t let innovation stop, because this could be the window of opportunity,” retail futurist Doug Stephens cautioned in March 2020. “Use this time to reinvent how you do what you do, bring consumers new alternatives, new value, and in the process even reinvent your own brand.” Successful fashion companies will embrace new technologies over the long term, starting with their operating models and recruitment strategies. Companies should recruit more talent across geographies, seek out top talent internationally, and set up teams away from headquarters to attract talent. Fashion brands also need to operate flexibly throughout the value chain, adapting quickly to consumer trends and needs. For example, designers and salespeople should make decisions quickly and guide brands toward a demand-driven model through 3D technology, virtual sampling and artificial intelligence. Production-side, successful contingency plans were implemented during the outbreak-such as shifting production to Turkey when mainland China was under embargo-to increase supply chain flexibility and better prepare for future shocks. Brands should also innovate their products by integrating emerging consumer trends. For example, Chinese brand Cosmo Lady developed an antibacterial intimate wear line that capitalises on a niche product concept, a move that drove its share price up 21 percent (McKinsey & Company, 2022, pp. 32-34). The challenge in the future will be how to use the power of social media to do good: put consumer pressure on enterprises to eliminate their impact on society and the environment, put pressure on governments to enact better laws to protect workers and the environment, and let consumers buy less rather than more (Hethorn and Ulasewicz, 2015).
For some enterprises, the boundary between business and creativity is blurred, which can help them enter a new height. For example, Coca-Cola often defines itself as art itself; The recent cooperation with Kath has proved their unique attraction. The introduction of art into the business portfolio can enhance the stock of any brand.“Increasingly, companies are noted by rating agencies or investment analysts on elements beyond P&L: social responsibility, ethics, sustainability,” says Vadim Grigorian. To some extent, anything related to art and culture is assimilated with commerce. BMW’s art car project began in 1975, when Herv é Poulain, a French racing driver and auctioneer, commissioned American artist and friend Alexander Calder to draw the first BMW art car （Davidson, 2022)
Reference:
Colson, D. (2 February 2022). The Three Pillars of Sustainability: Economic, Social And Environment. Available at: https://www.transformationholdings.com/corporate-sustainability/3-pillars-sustainability/ [Accessed: 20/10/2022]
fashionunited.com (2022). Global Fashion Industry Statistics. Available at: https://fashionunited.com/global-fashion-industry-statistics [Accessed: 20/10/2022]
Posner, H. (2011). Marketing Fashion. Available at: https://ebookcentral.proquest.com/lib/ual/reader.action?docID=1876102 [Accessed: 21/10/2022]
Kumar, M. (MAY 20, 2022). FASHION INDUSTRY AND ITS KEY SECTORS. Available at: https://www.techpublishnow.com/fashion-industry-and-its-key-sectors/ [Accessed: 21/10/2022]
McKinsey & Company (2020). The State of Fashion 2020 Coronavirus Update. Available at: https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/Its%20time%20to%20rewire%20the%20fashion%20system%20State%20of%20Fashion%20coronavirus%20update/The-State-of-Fashion-2020-Coronavirus-Update-final.pdf [Accessed: 22/10/2022]
Davidson, J. (2022). From Silicon Valley offices to Warhol’s posthumous dominance, business and art’s long relationship is stronger than ever… Available at: https://www.we-heart.com/2018/10/18/business-and-art-a-valuable-relationship/ [Accessed: 24/10/2022]
