New Fast Fashion Report by Alvarez & Marsal Finds Consumers ‘Gotta Have It Now’
Fast fashion — which is often criticized for hurting the environment — is poised to retain much of the ground it gained during the pandemic, according to a new study by Alvarez & Marsal’s Consumer Retail Group called “The New Evolution of Fast Fashion.”
The report examined the growing role and influence of fast fashion across the industry and found that retailers need to be able to capitalize and react to emerging and evolving trends as fast as possible, or they will lose out. The report said that in order to be successful today, brands need to adopt quicker cycle times between concept and delivery to cater to the fickle needs of a technology-obsessed consumer base.
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The report surveyed around 500 U.S. consumers ages 18 to 65 in June across all regions in the U.S. through an online panel.
Among the findings was that 50 percent of respondents want to buy a fashion trend within the same week they discover it. Consumers are no longer willing to wait six months; they want to see it on and buy it immediately. Some 40 percent of respondents ages 18 to 44 said they would compromise brand loyalty for immediacy when shopping for trends. And, 49 percent of survey respondents said they buy their fashion trends online, while 35 percent of them shop in a mall. In addition, 30 percent of respondents purchase fast fashion at least once a week, while 65 percent purchase multiple items.
But how does that jive with fast fashion’s reputation for having a negative impact on the environment? What did the respondents say about that?
Michael Prendergast, the study’s coauthor and managing director at Alvarez & Marsal’s Consumer Retail Group, said they didn’t question the respondents about the negative impact of fast fashion on the environment because they have a separate White Paper specifically addressing that important topic. “The interesting thing is we were under the assumption, especially under a certain age group, that sustainability and environmental responsibility is of the utmost importance to the consumer,” he said.
“People are absolutely concerned about sustainability and the environmental impact, but at the same time they really want their trends when they want them. It can be conflicting, but what it turns into is a lot of the press that you’re seeing lately, a lot of the responsibility is really falling back onto brands and retailers now to make sure their sustainability efforts are true and really valid, and they’re not what I’ll call lip service, if you will,” Prendergast said.
The report notes that the increased demand for disposable clothes from companies such as Forever 21, Zara and Shein demonstrates customers’ increasing appetite for access to the most recent trends without waiting. The study showed that fast fashion is no longer an isolated category of retailers. It has become a requirement of doing business in a quick trend environment of fast consumer adoption.
According to Prendergast, “The original introduction of fast fashion had some negative connotations to it, whether it was environmental impact, whether it was labor impact or whether it was quality of product or lack thereof. What we’re saying is the new evolution of fast fashion is not any of those. It is being quicker in your supply chain to get your design process closer to your customers’ decisions. That’s what we think the next evolution of speed is,” he said. “With that, everybody should be adopting a speed model to a certain extent, whether you’re a luxury house or an inexpensive brand.”
With labor shortages, shipping delays and rising supply costs holding up the industry, the A&M report found that traditional retailer models must take key practices from fast fashion to compete and survive in this new retail world. For example, they suggest retailers need to shrink their calendars, enhance technology and design resources, leverage sophisticated data and analytics, and align all internal and external resources to the strategy. This strategy has allowed fast-fashion companies to efficiently and effectively scale, according to the report.
The report notes each evolution of fast-fashion brands has pushed the production timeline shorter and shorter. For example, when Forever 21 first launched, it could go from sketchpad to storefront in a couple of months. Zara “famously reduced” the time from runway to retail store to less than 30 days. Today, Shein can design, produce and launch a product in as little as two weeks. The report also said consumers are rewarding retailers that provide items in the shortest amount of time. For example, in 2020, Shein reached $10 billion in revenue with eight consecutive years of 100 percent growth, and Zara achieved $33 billion in revenue in 2021. Inditex reported second-quarter revenue growth of 36 percent in 2022 and H&M posted net sales advanced 17 percent in the last quarter.
But with the backlash that fast-fashion companies get for hurting the environment, can one actually tell a retailer they should adopt more of the fast-fashion practices?
“Absolutely. I do not think sustainability and a quick turn model are mutually exclusive. We truly believe that you can move quickly in your supply chain and still have social responsibility and sustainability as a high priority. You have to really approach it from Day One of a style,” he said. “A lot of the speed comes in the actual product development process prior to a tech pack being handed off to a mill or to a factory. There are ways to really condense the calendar in the pre-planning design process and adoption process. Retailers or brands should not be getting two, three or sometimes six versions of prototype sample. To be quick you have to have the diligence and the design expertise to have your first proto[type] be your final sample, and that in itself eliminates a lot of wastage,” he said.
Once it’s handed off at the factory level, he said there are ways to partner with your vendors to make sure they’re being fast and they’re being environmentally responsible. “That’s the key piece, partnership. There’s a new definition of partnership. You have to be heavily invested in the success on both sides, which includes sustainability, social responsibility and environmental responsibility. To really have the transparency into what your factories are doing and holding them accountable, and you can still be fast when you’re doing it,” he said.
Do the current supply chain issues throw a monkey wrench into the whole speed game?
“Yes, and no. I wouldn’t necessarily call it a money wrench. It’s definitely a complication, and it’s definitely something you have to be hyper-aware of. But at the same time, there are still ways to navigate through the supply chain challenges. It’s really an end-to-end approach, starting at concept and going all the way through to delivery to store or to customer. Although certain pieces in the supply chain are elongated currently, there are ways to offset those extended periods in the supply chain. It doesn’t shut the door on a fast model just because some of the logistics lead times are longer than they have been. You can still navigate through the longer logistics lead time by optimizing the value chain in other areas.”
Asked what surprised him most about the survey’s results, Prendergast said, “It was very confirmatory. We had the hypothesis that quick response to trends from a purchasing standpoint was really top of mind and important to consumers. When we saw the numbers it really validated that. The other surprising thing was how consumers today want to react quickly, however they’re still shopping in brick-and-mortar, and within brick-and-mortar they want those trends to be there for them as well. It’s well known and well talked about that from a digital standpoint you have to be on top of trends, but it’s a little bit forgotten that in brick-and-mortar you actually have to be just as quick and just as nimble, or your customer will walk away,” Prendergast said.
In the survey, about half of the respondents indicated they’d check another retailer if a trend is not available, and only 30 percent will check back with the same retailer for the same trend again.
According to Prendergast, the survey showed the old days of branded loyalty is archaic and brands are super-important, whether it’s a third-party branded wholesaler or a retailer that has their own brand. “It’s still important, but if you don’t have the trend there, the customer’s fickle and they’re nimble and they will not wait. They’re going to move onto somebody else that has it,” he said.
“This craze reflects a massive opportunity across apparel retail — brands need to get the equation right and provide trends quickly and accurately, or risk losing out,” added Joanna Rangarajan, senior director of Alvarez & Marsal’s Consumer Retail Group and coauthor of the report. “Companies can take steps to shrink their calendar, adopt a flexible and rapid design-to-delivery model, and make bold, data-informed decision to keep pace with today’s insatiable customers.”
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