A Glance At The Fashion Industry

The fashion industry has been evolving since the dawn of time.

However, mass media like TV and Cinema became the primary propellers for various fashion trends.

From luxury to fast fashion and more.

Audrey Hepburn’s 1961, Breakfast at Tiffany well epitomizes the acceleration of mass fashion trends.

By the 1980s the most prominent fashion brands had been born like Fendi (1925), Gucci (1921), Prada (1913), Chanel (1909), Burberry (1856), Louis Vuitton (1854), Hermès (1837).

And by the 1990s those fashion brands would start being merged into giant, multi-brand luxury corporations (LVMH and Kering will give us the picture):

lvmh-group-business-model — LVMH is a global luxury empire with over €79 billion ($83 billion) in revenues for 2022, spanning several industries: wines and spirits, fashion and leather goods, perfumes and cosmetics, watches and jewelry, and selective retailing. It comprises brands like Louis Vuitton, Christian Dior Couture, Fendi, Loro Piana, and many others.

kering-business-model — Kering Group follows a multi-brand business model strategy. The central holding helps the brands and Houses part of its portfolio leverage economies of scale while creating synergies. At the same time, those brands are run independently. Kering is today a global luxury brand that made over €20 billion in revenue based on this multi-brand strategy. Within Kering Group are brands like Gucci, Bottega Veneta, Saint Laurent, and many more—the primary operating segments based on luxury and lifestyle.

Only a few brands, (like Prada) would escape consolidation and stay independent.

Yet, while by the 1990s this trend consolidated, and by the 2000s, most of the Luxury Fashion industry is in the hands of a few giants (LVMH also managed to take over Tiffany).

In the same span of time, a separate phenomenon emerged: Fast Fashion.

While Luxury brands targeted the higher end of the market, by emphasizing quality, uniqueness (or at least scarcity), and status. Fast fashion brands focused on the opposite side of the market. Focusing on speed, variety, and low prices.

Zara epitomized that evolution, as part of the Inditex empire:

inditex-fast-fashion-empire — With over €27 billion in sales in 2021, the Spanish Fast Fashion Empire, Inditex, which comprises eight sister brands, has grown thanks to a strategy of expanding its flagship stores in exclusive locations around the globe. Its largest brand, Zara, contributed over 70% of the group’s revenue. The country that contributed the most to the fast fashion Empire sales was Spain, with over 15% of its revenues.

zara-business-model — Zara is a brand part of the retail empire Inditex. Zara is the leading brand in what has been defined as “fast fashion.” With almost €20 billion in sales in 2021 (comprising Zara Home) and an integrated retail format with quick sales cycles. Zara follows an integrated retail format where customers are free to move from physical to digital experience.

By the 2010s the web had finally managed to scale to billions of people and a further penetration happened as smartphones equipped with shopping apps took over.

This enabled a transition from fast fashion (with a focus on speed, shortened manufacturing cycles, and effective logistics, and focused on operating flagship stores where items could be easily distributed) to ultra-fast fashion (where the focus on speed was achieved also thanks to an only-online presence, thus cutting operational costs, and focusing on shorter manufacturing cycles and global logistics).

ultra-fast-fashion — The Ultra Fashion business model is an evolution of fast fashion with a strong online twist. Indeed, where the fast-fashion retailer invests massively in logistics, warehousing, its costs are still skewed toward operating physical retail stores. While the ultra-fast fashion retailer mainly moves its operations online, thus focusing its cost centers toward logistics, warehousing, and a mobile-based digital presence.

ASOS and Boohoo well represented this change:

asos-business-model — ASOS is a British online fashion retailer founded in 2000 by Nick Robertson, Andrew Regan, Quentin Griffiths, and Deborah Thorpe. As an online fashion retailer, ASOS makes money by purchasing clothes from wholesalers and then selling them for a profit. This includes the sale of private label or own-brand products. ASOS further expanded on the fast fashion business model to create an ultra-fast fashion model driven by short sales cycles and online mobile e-commerce as main drivers.

boohoo-business-model — Boohoo – sometimes referred to as Boohoo.com – is an English online fashion retailer founded in 2006 by Mahmud Kamani and Carol Kane in the historic textile district of Manchester. Boohoo makes money by selling fashion items for more than the cost of manufacturing, advertising, marketing, and distributing them.

On a parallel track, companies like Patagonia had been emphasizing much more on sustainability, thus building their brands on the premise of slow fashion.

While slow fashion took over, also another evolution of fast fashion made it to the masses: real-time retail.

Well exemplified by SHEIN, real-time retail brings the concept of fast fashion to another level. Where fashion trends are made and fast followed through digital channels, and also operations are primarily online and logistics global:

shein-business-model — SHEIN is an international B2C fast fashion eCommerce platform founded in 2008 by Chris Xu. The company improved on the ultra-fast fashion model by leveraging real-time retail, which quickly turned fashion trends in clothes’ collections through its strong digital presence and successful branding campaigns.

Key Highlights:

Evolution of Fashion Industry: The fashion industry has been evolving over time, with various trends and movements shaping its development.
Luxury Fashion Brands: Iconic luxury fashion brands like Fendi, Gucci, Prada, Chanel, Burberry, Louis Vuitton, and Hermès emerged and later merged into giant multi-brand luxury corporations like LVMH and Kering.
Fast Fashion Emergence: In the late 1990s and early 2000s, fast fashion brands like Zara and H&M gained popularity by offering cheap and fashionable clothes with short design-manufacturing-distribution cycles.
Differences between Luxury and Fast Fashion: Luxury brands targeted higher-end markets, emphasizing quality, uniqueness, and status, while fast fashion brands focused on speed, variety, and low prices.
Transition to Ultra-Fast Fashion: With the web scaling to billions of people and the rise of smartphones with shopping apps, fast fashion transitioned into ultra-fast fashion. This involved focusing on an online-only presence, cutting operational costs, and shorter manufacturing cycles and global logistics.
ASOS and Boohoo as Examples: ASOS and Boohoo exemplify the shift to ultra-fast fashion with their strong online presence and short sales cycles.
Slow Fashion and Real-Time Retail: While slow fashion emphasizes sustainability and quality in the supply chain, real-time retail is a further evolution of fast fashion that involves instant data collection, analysis, and distribution to offer consumers a personalized shopping experience.
SHEIN: SHEIN represents real-time retail, where fashion trends are quickly followed through digital channels, and operations are primarily online with global logistics.