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.
From Fast Fashion to Ultra-Fast Fashion
Zara had mastered this model. Its strength relied on:
- Quickly replicating designs: Zara initially didn’t innovate in terms of design. Instead, it copied fashion trends. Therefore, it fast followed the existing trends created by high-fashion players.
- Mass manufacturing them: Zara also had mastered quickly and cheaply manufacturing its clothes to achieve extreme speed. Where competitors or existing players took six months to turn the design into clothes available at the store, Zara took this to another level, shortening the design-manufacturing cycle to as low as 2-4 weeks.
- Mass distribution and logistics: Another key element of this strategy was making logistics a core competency of Zara. As these clothes could be easily made available in all its stores. By leveraging a “just-in-time” process, Zara distributed clothes across the stores from its central warehouses (perhaps in Spain), making the clothes available within 48 hours in any of the European stores.
- Flagship retails: Zara also invested in a marketing/distribution strategy where stores would be located in iconic and central places in the major cities across the globe. This is both a marketing and distribution strategy as the millions of tourists checking Zara’s store every day also could get comforted by the fact of finding Zara anywhere they were going (not that dissimilar to finding a MacDonald’s restaurant anywhere in the world). And this strategy of flagship stores also worked as a distribution strategy as its clothes could be easily made available to millions of consumers each day.
- High turnover: Another key element of Zara’s strategy was the high turnover of clothes. In short, each week, fashion shoppers could find different styles of clothes, thus creating a sort of addicting shopping mechanism, where you could go shopping with more and more frequency.
As the 2010s came, more and more shoppers turned to online retail. This brought to a further evolution where online players, or at least those able to leverage their online presence, could quickly gather the feedback of users, by further reducing the time from design to manufacturing/distribution.
Therefore, ultra-fast fashion is a further evolution of fast fashion. How did it evolve? By simply relying on online stores, rather than building a physical presence. For instance, in the case of ASOS all its efforts are invested in further shortening the design-to-sales cycles.
As ASOS highlights on its website:
We’re all about online at ASOS so you won’t find us in your local mall. We’ve got hundreds of brands and thousands of products that just wouldn’t fit into a store.
Instead we focus our efforts on bringing you thousands of new products each week and the latest fashion news and tips via our Women’s and Men’s homepages.
You don’t have to worry about opening and closing times or trying to find a parking spot – just log on from the comfort of your own home and start shopping. We’ve also got a mobile site and app so you can shop while on the go.
To better understand this transition from fast fashion toward ultra-fast fashion, we need to give a glance at ASOS’ financials.
The trend toward casual clothes has been accelerated by the pandemic and that has favoured ASOS. In fact, from a quick glance at its financials it’s possible to see how the company has further accelerated its sales and global customers acquisition:
When looking at the financials of ASOS, it’s interesting to note a few things:
- The company has a high marginality, with most of its sales coming from retail. This is thanks to the fact that ASOS is online-only. Thus, it uses its cash to invest in shortening the design-sales cycles, rather than operating massive stores, as it has been in the past for fast fashion retails like Zara or H&M.
- Among its key metrics there are the total visits, conversions, and mobile device visits.
- As it’s clear from its KPIs, mobile shoppers represent the majority (they grew to 86.3% in 2021).
- With a strong mobile presence, ASOS has incorporated the social shopping experience into its process thus, managing to increase the average units per basket and the frequency to which mobile shoppers place orders (over 3 orders per year with an average selling price of 23 pounds, and an average basket value of 71 pounds as shoppers usually have three items at least in their baskets).
Where a fast-fashion player like Zara has most of its operational costs skewed toward stores (which in Zara’s case are both a distribution and marketing tool), an ultra-fast fashion player like ASOS instead has most of its operational costs toward warehousing, logistics (delivery), and digital marketing/social media marketing.
While also Zara is converting a good chunk of its activities to online, the main difference between a fast-fashion player and an ultra-fast fashion one is the online-only presence of the latter. Furthermore, the online presence is skewed toward mobile shoppers.
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