just-style management briefing: Speed and flexibility a boost to profitability
Fast fashion has had a fundamental impact on the apparel industry in the space of just a few decades, with global fashion giants such as Zara and H&M demonstrating a previously unthinkable production speed, with the ability to get a garment from concept to store in less than 12 weeks.
And while sizes, tastes and retail strategies vary around the world, according to industry analysts, the most successful fast fashion enterprises all have some fundamental things in common.
Robert Swinney, a professor at California's Stanford Graduate School of Business - and co-author of a recent study on fast fashion management models - identifies two crucial operational aspects of the fast fashion phenomenon: "Timelier product design and quick response production."
He says that when these two concepts interact positively, they provide "a super additive increase in profit."
This is particularly so when dealing with 'savvy' customers who delay purchases to take advantage of sales, according to Swinney's research, as they can be provoked into a full-price purchase (with greater profit margin for the retailer) of up-to-the-minute design with limited availability.
The standout fast fashion success story thus far has been Spanish-based label Zara; the world's number one fast fashion enterprise.
Zara has perfected its version of the fast fashion model by keeping manufacturing close to home, and a tight geographical control on production to maintain speed and get new merchandise into stores as often as twice a week. The brand's sophisticated communications network ensures that the latest trends and buyer feedback are constantly feeding its design teams.
Speed and flexibility
But how sustainable is global expansion - a strategy pursued by many other fast fashion enterprises, particularly into Asia - for a business based on speed?
Anastasia Charbin, fashion marketing director at Lectra, notes that while flexibility is essential to make the last minute decisions that are unavoidable in fashion, last minute "doesn't have to mean hasty or uninformed."
"With the right planning," she adds, "it can mean fine-tuned and agile - for example, holding greige goods that can be cut or dyed at a moment's notice. The key is to shift from holding finished stock to unfinished stock, which helps reduce surplus and the number of items that end up selling at a markdown."
Speed is equally important and any way to reduce time to market is a welcome step.
"Classic initiatives like communicating with clear, visual specifications and using digital colour management represent enormous time savings by cutting down on confusion and error," Charbinexplains.
"The introduction of more advanced technology like 3D prototyping is revolutionising the sampling process and giving development teams more speed and flexibility than they could ever have with manual techniques."
Another interesting dilemma posed by global expansion is on the vertical supply chain.
"Do you maintain short lead-times at great expense - either because of air freight or new capital investment into local production in the expanding markets - or tolerate longer lead-times and less responsiveness in the supply chain?" Robert Swinney asks.
An interesting counter-example to all of this is the Japanese-based Uniqlo, which in many ways has been the anti-fast fashion retailer.
"Their styles are much more 'classic' and predictable than Zara or H&M. They can reasonably tolerate much longer lead-times and lower production costs as a result. It seems to me that Uniqlo's model scales globally much more easily than the fast fashion companies and is the more sustainable strategy because of this."
For the moment, however, Zara shows no sign of slowing its global expansion. And its move into the southern hemisphere is interesting (for instance Australia, South Africa and Peru).
In a statement, it explains: "These three markets represent further progress in the differential retail strategy Inditex [Zara's parent company] applies to markets in the southern hemisphere."
While the collections may have been customised for the southern hemisphere seasons, stylistically, there is little difference in terms of pieces sold from one country to the next.
From catwalk to consumer
Meeting consumer demand means a close relationship with fashion catwalks (which can be interpreted as either inspiration or copying, depending on the point of view), and this has inevitably created a certain friction over time between haute couture designers and fast fashion enterprises.
The line between a flattering copy and a direct rip-off is often a subtle one, and this has led to many heated legal clashes and legislative minefields, such as the heavily contested Innovative Design Protection and Piracy Prevention Act, in the US.
The distinction between haute couture and fast fashion has also become increasingly blurred in recent years. While some haute couture designers such as Dolce & Gabbana have refused to consider collaborations with the world of fast fashion, others have embraced the idea. Luxury brands Lanvin and Versace have both come out with collections for H&M, while Italian fashion house Missoni's collection for US discount retailer Target was hugely successful.
For Italian fashion anthropologist Simona Segre Reinach, this comes as no surprise. "Fashion is about imitation and differentiation. Haute couture stopped being commercially relevant in the 50s and 60s. Nowadays it is the narrative of the designer that is relevant - together with other media, like fashion films," she says, adding that nowadays, "fast fashion is the most important phenomenon in fashion."
Bridging the luxury gap
With this, it is clear that overall, fast fashion has profoundly influenced both the design and manufacturing strategies of couture houses at all levels of the value chain.
This is perhaps nowhere more evident than in Italy; a country that has lost a significant amount of its 'luxury' appeal due to an increasing amount of outsourcing to China over the years, but still has a thriving luxury and mid-range apparel sector.
The 'Made in Italy' brand has proved it is not immune to the dictates of fast fashion, yet, according to Reinach: "Italian fast fashion is different to Zara or H&M. It is a special sector...they started as fast fashion, but they now present a very successful hybrid model that combines the best of 'pret à porter' with the best of fast fashion."
Indeed, in all countries associated with more 'luxury' fashion, fast fashion is beginning to bridge the gap between higher and lower income regions.
Claudio Ceper, consultant at Egon Zehnder International, Milan, said: "Take the [Eurozone] crisis with public deficits throughout all southern European countries - there is a boom in the so-called discount retail stores, and the same phenomenon applies to fashion."
"Even in France and Italy - [consumers] are finding and buying useful things at lower prices at Zara and H&M, and combining these items with Armani, Prada, and Dolce & Gabbana."
Additional reporting by MJ Deschamps.
An interactive databank with intelligence on the major apparel sourcing countries
Among the industry executives who spoke with just-style this year were Ranjan Mahtani, CEO of Epic Group; Henry Tan, CEO of Luen Thai Holdings; Andrew Lo, CEO of Crystal Group; and Marks & Spencer's K...
Among the most-read analysis articles on just-style in 2012 were stories relating to the clothing industry in Burma, the importance of speed to market, and the future of the UK apparel manufacturing i...
Among the most-read comment articles on just-style this year were a look at China's competitiveness and the sourcing potential of Bangladesh and Burma, as well as the challenges facing retailers inclu...
Swiss group CHT Bezema has opened what is thought to be the first bonded warehouse supplying dyes and chemicals to Ethiopia's growing textile and clothing industry....
A campaign to extend the wool selling season by driving sales in hot climates has launched at the the Middle East at the Dubai Mall and is set to be joined by a number of tailors and retailers over th...
- Why have US FTA imports fallen to a record low?
- Collaboration key to the future of smart textiles
- Hanesbrands sourcing to cut Pacific Brands costs
- First figures show Bangladesh exports climb
- Synergies Worldwide CEO unravels sourcing shifts
- Hanesbrands to buy Pacific Brands for $800m
- Lindex planning supplier sustainability scorecard
- US Q1 in brief: VF Corp, Carter's, Skechers
- BHS receives "expressions of interest"
- Timberland sets new eco-preferred standards