Humaira Rashid

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Profit

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In the contemporary business environment, a fashion brand’s creative identity comes second to the priority of achieving sales. 

The industry, more precisely the e-commerce market, is worth $768.7 billion in 2023 and is expected to grow by 9.45% over the following 5 years. (Statista, 2023)

 Leaving aside apparel and focusing on accessories and footwear, the US market has been worth $81 billion since 2011. Unlike ready-to-wear, this side of the industry maintains relatively a stable design, diminishing the need to introduce a new style every season, mostly if it is perceived as an investment piece. At the end of the season, clothing pieces have a higher discount, with reductions of up to 70%, whereas accessories on average go down up to 35%. (Fernandez, 2017)

In summary, the commercial element is a pivotal part of the construction of a brand’s collection. The products are planned with the aim to gratify the consumer, and the more it aligns with the needs of the market, the higher the chance of achieving successful sales. 

The industry is transitioning toward shaping customer loyalty by adapting to the current market dynamics. The price point and its perceived value are based on the brand’s efficacy in building a good narrative, that creates a desire to possess a particular product. The creative director’s role is to understand the DNA of the brand and intrinsic it to the final product. (Mitterfellner, 2023)

However, the current market also forces to prioritize the production of highly marketable items, sometimes at the expense of the artistic element. This pattern can be seen in a successful brand like Gucci, where after the departure of Alessandro Michele, Sabato de Sarno took over bringing back sobriety by designing a minimal and commercial collection, that aims to cater to a loyal customer base. (Business of Fashion, 2023)

Another emergent trend, also among Gen Z, is the adoption of unisex fashion, which blurs the demarcation between traditional men’s and women’s clothing categories, aiming for the potential of higher sales by pushing gender-neutral products. (McKinsey, 2023)

Due to the recession which escalated the production costs, the final retail prices also increased leading the consumer to prefer mindful purchase, reducing discretionary expenditure, like new clothes. Consequently, brands have to formulate strategies for diversified markets by understanding the consumer, reconstructing their business model cutting non-essential costs. This will help to keep the prices down and mitigate the loss caused by societal dynamics. (McKinsey, 2023)

Reference

Mitterfellner, O., 2023. Luxury Fashion Brand Management: Unifying Fashion with Sustainability. 1 ed. s.l.:Taylor & Francis Group.

Fernandez, C., 2017. 6 Lessons For Building a Winning Accessories Business. Business of Fashion.

Statista, 2023. Fashion eCommerce: market data & analysis, s.l.: s.n.

McKinsey, 2023. The State of Fashion, s.l.: s.n.

Business of Fashion, 2023. Sabato De Sarno’s High-Stakes Gucci Debut. Business of Fashion.

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People

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Gen Zers need to be individualistic, therefore have a strong sense of identity and expressiveness is what sets them apart from previous generations. They prioritise self-expression over conforming to society. According to data released by McKinsey, 58% of individuals born after 1995, known as Gen Z, lack basic social needs due to experiencing crises such as inflation, wars and climate change. All these events contributed to a general sense of pessimism among Gen Z, while fuelling the need to improve the society, after the failure of the previous generation to guarantee a stable future. (McKinsey & Company, 2023)

Gen Z is the primary consumer group of the second-hand market, which is forecasted to grow by 127% in three years. Platforms such as Vinted and Depop, where users can buy and sell second-hand products, count primarily individuals under 26. This trend reflects how this category of consumers share interests in circularity, aiming to give a longer lifespan to their purchase and embrace sustainability, ethics and uniqueness, giving a strong value toward where their money is going, rather than following mainstream trends. (WGSN, 2023)

This category of consumers thinks that the reputation of a brand goes beyond the quality and a premium price which is not justified if core values are missing. If a brand is not fully transparent, they risk being “cancelled” or blacklisted. (Spagnuolo, 2020) This scenario can be witnessed in the case of Balenciaga, which faced backlash for creating questionable advertising featuring sexualized child.

As digital natives, Gen Z has a myriad of sources to validate information and share their opinions. Traditional media such as magazines and tv ads is no longer effective. Instead, a brand should build a 360-degree experience on both physical and online platforms, so they are able to comunicate with a wide range of potential consumers. Otherwise, they risk relying on a specific target, focusing on cultivating only loyal consumers and throughout the time the brand fails to attract new potential clients, so decline as they failed to adapt. (Mitterfellner, 2023)

Ganni is an example of a current emerging brand that appeals to Gen Z, being their key consumer, and it shows how it is possible to grow an ecosystem with transparency and ethical values, which includes the usage of innovative materials avoiding greenwashing, and prioritise social responsibilities by promoting size inclusivity from a range of XS to 3XL, and fostering diversity ensuring better representation between all the stakeholders. (WGSN, 2023)

McKinsey & Company, 2023. What is Gen Z?

WGSN, 2023. Gen Z: Fashion Recommerce Profiles 2023,: Elizabeth Tan.

WGSN, 2023. Brand Case Study: Ganni: Laura Saunter.

Mitterfellner, O., 2023. Luxury Fashion Brand Management : Unifying Fashion with Sustainability. 1 ed:Taylor & Francis Group.

Spagnuolo, E., 2020. Meet Generation Z: Shaping the future of shopping [MiKinsey Podcast] (04 08 2020).

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Planet

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Clothing items are not intentionally crafted to biodegrade, which will result a long-lasting presence of textile waste in the landfills of the planet.

This is the reason why fashion industry has an alarming impact on the environment, considering that it produces an average of 35 billion tons of garments each year, of which 75% is partially discarded during the production phase, and then at a post-consumer level. (Castro, 2021)

Research demonstrates how in 2018 the fashion system emitted 2.1 billion metric tons of greenhouse gas (GHG) emissions, accounting for 4% of the global emissions. (McKinsey & Company, 2020)
These data suggests that the planet and the current system are unable to naturally dispose the wastage, and so the safeguard of the planet becomes part of the “Four Pillars of Sustainability”. 

The continuous demand from consumers led companies to rely on usage of material with questionable origins, unsustainable supply chains that exploit low-cost labor and environmental consequences. (Castro, 2021)

Even fibers like cotton and viscose that might be considered natural, actually hide problems for the wellbeing of the planet, such as abundant usage of chemicals and pesticides to speed up natural processes of plants, deforestation, discharge of contaminated water into the river ecosystem which all together accelerates the fear of global warming. (Rimarcikova, 2020)

The resources on the planet are limited, and therefore it is necessary to transition to systems that promote responsible choices with the collective support of governments, industries and consumers.

Therefore in 2015 the UN implemented Sustainable Development Goals (SDG), urging the 193 state members to respond to the environmental and social problems by 2030. 

As mentioned in the 12 SDG, to attain improvements regards a sustainable consumption and production, the industry has to shift toward renewable practices and adopt a circular economy.
A circular economy aims to take in account the waste and pollution from the initial concept; reducing the usage of microfibres, put more emphasis of material recycling, and restoration of natural systems with the aim of replenishing the planets’ resources. (Gwilt, 2020)

This can be accomplished by encouraging consumer’s education on a garment care practices, in order to reduce energy and water consumption, finding alternative usage such as alteration and repair skills to mitigate more waste destined for landfill disposal. (Gwilt, 2020)

Corporation should focus on building transparent supply chains and held accountable for the involvement into ecologically harmful activities. Simultaneously, government should restrict legislations driven by the shared commitment to preserve the planet.

Citation

McKinsey & Company, 2020. Fashion On Climate.

Rimarcikova, K., 2020. Planet Earth & Fashion [lecture] (2-10-2020).

Gwilt, A., 2020. A practical guide to sustainable fashion. London: Bloomsbury Visual Arts.

Castro, O. D., 2021. Loved Clothes Last. London: Penguin Books Ltd.

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