Fast Fashion

Introduction

In the past decade fast fashion has become the main feature fashion industry in UK. (liz Barnes, Gaynor Lea-Greenwood, 2010 ) ‘Fast fashion’, as it has come to be called, it has become rising popular among retailers already. So lots of chain stores adopt business model of the vertically integrated, this idea originally comes up from the ‘Just-in-time’ manufacturing philosophy and generating rapid-response strategies (Birtwistle et al., 2003) Excellence in the development of fast fashion retailers can be attributed thanks to the high means of buy from consumer behavior, which is more fashion-hungry. (Constanta and Grete, 2010)

This proposal investigates from the consumer perspective which factor attracts the consumer in the fast fashion clothing purchase. So, in the research, it will investigate the consumer behavior of fast fashion. Then, it will reveal the reason why consumer buys their clothes, which of the 2 brands is more popular and explore also the interest of the consumer. Finally the proposal will let the reader knows which factor leads the consumer to buy or not, fast fashion in both brand of products.

Chapter 1. Literature review

1.1 Chapter summary

The purpose of this chapter is to know what fast fashion is, and to know which factor influence fast fashion.

1.2 Background of fast fashion

Fast fashion is an idea in mind that retailers of targeting business strategies to reduce product of fashion into the store, and working in a system for a buy-season when product ranges are constantly updated through the season. (Doyle et al, 2006; Sull and Turconi, 2008) Fast fashion means that there between the time scale of a new fashion trend and time spent for the company to respond of trend exists with product sold in the market. (Michael, 2006) To defining fast fashion is ‘a business strategy which aims to reduce the processes involved in the buying cycle and lead times for getting new fashion product into stores, in order to satisfy consumer demand at its peak’ (Barnes and Lea-Greenwood, 2006, p.259) Otherwise, the reason for the significant increase of fashion apparel market, can be explained due to high demand since recent years for cheap fashion. Indeed, fast fashion has won some market share and it represents now like a fifth of total in UK clothing marketing (Defra, 2008a). This phenomenon has led consumers to buy and processing of growing batch of clothing. In the UK, more than one billion kilograms of textiles send to landfills each year. (Waste Online, 2008). Fast fashion retailers used to respond to market time in a very short time: they just need few weeks, compare to the traditional industry which usually needs six month. (Sull and Turconi, 2008) The basic of fast fashion principle is to shorten lead time and obtain products from concept to consumer. (Bames and Lea-Greenwood, 2006; Sull and Turconi, 2008) An example of fast fashion retailers: H&M, ZARA, New Look and Top shop etc. It has launched a newline average two or three weeks for a very low price. Thereby raise sales via impulse buying. (Constanaza and Grete, 2010)

In Europe the fast fashion is dealing with the service of the youth and young adult women who desire stylish, short, and relatively cheap clothes, and who are willing to buy small retail shops and boutiques. (Nagurney and Min Yu, 2010) According to the apparel marketing and literature, in general fashion leader are often young consumers. (Mason and Bellenger, 1974; Gutman and Mills, 1982; Horridge and Richards, 1984; Goldsmith et al., 1991). The reason of this, is that young consumers have courage and are interested in trying new style and new fashion. At the same time, new fashion always starts in young consumer. (Ka Ming, Zhi-Ming and Chung-Sun, 2004). Fashion apparel sales grew steadily and competitiveness in the traditional British Fashion Market. It increased 21.4% from 2000 to 2005, and is expected a further 19.5% from 2005-2010. (Verdict, 2005) Fashion is the key factor for a consumer to buy fast fashion clothes.

1.3 Fashion

Fashion can be defined like “the process of social diffusion by which a new style is adopted by some groups of consumers.’ (Solomon et al., 2006) The one of the most famous fashion designer Coco Channel said that ‘fashion is not something that exists in dresses only. Fashion is in the sky, in the street, fashion has to do with ideas, the way we live, what is happening’. Fashion is one of the most striking. It reflects the aesthetic, economic, political, cultural and social life changes. (Behling, 1985; Bush and London, 1960; Lauer and Lauer, 1981; Robenstine and Kelley, 1981; Wilson, 1985) Fashion is about something else and something greater. Fashion is about to escape from whom we really escape and who aspire to be. Fashion is temporary, at least in today’s fashion was happen at the yesterday. (Michael, 2006) Fashion trends work with the principles of product life cycle (PLC) management, from introduction products to the marketing to decline is very limited time. (Bruce and Barnes, 2005) This is very suited to the fast fashion, because it only does the newest fashion. The retailers put pressure to manufacture to decline the length of fashion product PLC and complement more frequent. Because of fast fashion needs more range of product to keep up-date, it is not amazing to see that the PLC of fashion product has reduced from months to weeks or even days. (Sull and Turconi, 2008; Barnes et al., 2007) Furthermore, Fashion also refers of the fact that consumer demand derived by weekly and daily television programs shopping more frequently, so consumers want to see the new look and the latest works of each purchase. (Barnes, 2008) So it can conclude that fast fashion is driving by fashion show, celebrity appearance and novelty, especially identified in the media, which projects creation and promote high-level of consumer demand. (Barnes and Greenwood, 2010)

On the other hand, as consumer pursues fashion all the time, and the money is limited, this is a creative chance for fast fashion. The all aspects of consumer require as a factor of fast fashion, that including theory of broadened, build on the in season buying and reduced lead time idea of ‘new’, this is also a key feature of fast fashion, in other words, newness means constantly update, updating of ranges and delivery of goods to the store. (Barnes and Greenwood) From this aspect, the consumer factor also very important in fast fashion.

1.4 The consumer and self-concept

Solomon,et al (2010) define self-concept is that ‘refers to the beliefs to the beliefs a person holds about their attributes, and how they evaluate these qualities.’ Self-concept can help us to define who we are and guide us to buy goods and services. (Hoyer and Macinnis, 2009) Self-concept aims and focus on saying the personality of people, who we are, and of course influence our way to act (Macinnis, 2008 p50) As Stone has figure out that ‘a person’s appearance announces his identity, shows his values, expresses his mood, or proposes his attitude.’ Mintel (2007) media and magazines have huge influence for consumer behavior. From the high street consumer are really careful about finding some ideas on magazines because it is where there are the last trends such as glossy magazines with a strong way of influence.

Schiffman et al (2010) define consumer behavior ‘as the behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs’. Consumer has become more ‘fashion’, ‘smart’ and intends to fashion and appearance for longer, so the size of the fashion product is increasingly in market. (Bruce and Daly, 2006; Mintel, 2009) As consumers are becoming more believed by self for fashion, ask adding new products growing of fashion product and in the UK fashion consumer want to change their style now. (Bruce abd Daly, 2006; Barnes, 2008) Fashion consumer’s expectation and thrive to changing, that the new products must be frequently used. Consumer purchasing a new supplier to engage in this rapid turnover of different products, in other words, the suppliers also need understand for change and have ability to provide such a relationship. (Bruce and Daly, 2006) Fast fashion is flexibility of design is referring to the ability or creating new design to close to start wear in-season, in which capture ever-changing and uncertain consumer trends. (Cachon and Swinney, 2008) In fast fashion field, the activities regarding the purchase are key. It is also influenced with the product decision -making and the changes.

According to Mintel (2007), the development of fast fashion retailers can be attributed to an excellent high purchase for impulse. The reason comes from an increasing purchase from low-cost countries in consumer attitude and removal of sigma attached to buying from value retailers.

1.5 Motivation

Motivation is identified as “the driving force within individuals that impels them to action’ (Schiffman et al, 2010) The ingredients of motivation are different. It can be responsive for three signals- natural, forward or reverse. (Rabey, 2001) Consumer behavior has two types in motivation thinking. One is called rational motives, another is called emotional motives. Rational motives mean that consumer are very carefully when they are buying. Emotional motives will pay attention to feelings such as pride, fear etc to choose one product to buy. (Michael et al, 2009) This is led to the increasing buying number of ‘season’ and transportation time providers must take in to consider.

There are three main reasons when consumers are buying fast fashion clothing, that have impulsed buying or emotional buying. The first one is the timing which is a priority. Fast fashion has the aim of getting clothing in to store with the time as time as possible. This is led to the increasing buying number of ‘season’ and transportation time providers must take in to consider. In Fashion industry, companies increasingly use time as a factor to enhance their competitiveness. More and more high street retailer’s procurement only few weeks from introducing new fashion product and add stock. This reduces chance of thinking for customer. Second deals with cost factors. Cost is one of the important buying decisions in consumer and company will take advantage of lower priced product from oversea, like China, Far East etc. (Lowson, 2001; Mattila et al., 2002) Third one is fashion buying cycle. In the tradition buying cycle, company spends long term forecasts from historical sales, this often happens one year before a season, that leads from orders placed to launched product. It spends for company six month. Also, company has a risk if during this time product out-of –date, all this working will cancelled. (Birtwistle, 2003)

Chapter 2. Research aim and objectives

21. Chapter summary

2.2 Aim

The aim of this research is to provider deeply understanding of the increase reason of fast fashion sales. This is focusing in which factor influence consumer purchasing motivation and reason for buying fast fashion clothing.

This aim will achieve by following three objectives:

1. To identify the profile of vintage consumer

2. To explore what fast fashion clothing means to the consumer

3. To critically analysis what makes consumer purchasing fast fashion clothing.

Chapter 3. Methodology

3.1 Chapter summary

This chapter is talking about methodology. The researcher will consider and evaluate different techniques of research used to obtain data relevant to the study in order to achieve the goals set.

3.2 Strategy

For this research, secondary research will be used. The reason for this is that some based data have been precociously collected by a third party.

Some resource of secondary research:

Journals, articles

Internet website such as Google Scholar, Science Direct etc

Books

Case studies

The first source is journal and articles. These will be some relevant information, such as some objective examples of fast fashion and some methodology. Case studies also helpful, it is true that the advantages of finding multiple case studies is that it help to generate answers to the questions why a well as what and how. (Saunders, 2009)

In addition, this research will use key words. This will help research define subject matter and make appropriate keywords. (Saunders, 2009)

Time

Cost

Fashion buying cycle

3.3 Ontology

Ontology a large extent determines the strategic planning of this study. Ontology is ‘concerned with nature of reality.’ (Saunders, 2009) This is emphasis on the active involved in the key construction projects. (Bryman, 2004) Following the ontological status of constructivism, this study asserts that social phenomena and their meaning are continuously being created and received by social roles. It can only be researchers’ own account, as there are building particular version of social reality, rather than one that can be defined as definition. (Bryman, 2004)

3.4 Research design

When research establishes question for research and hypotheses. It must be getting a plane a design for research which is get answers to the research question, test and hypotheses. Research design includes three categories of research approaches, there are: exploratory, descriptive, and causal. (Wrenn et al, 2006) So, in this research it will search before journal or article as them assumptions. Next, it will collect and analyzing both types of data via quantitative and qualitative. Naslund nad Mentzer et al (1995) states that more research choose quantitative than qualitative. However, Naslund argues that if research want to develop deeply and more logistics research, it must be combine both methodologies.

3.5 Quantitative

Quantitative can be defined that ‘quantitative models are based on a set of variables that vary over a specific domain, while quantitative and causal relationships have been defined between these variables’. (Bertrand and Fransoo, 2002) Quantitative modeling is original research in operations; this model is label as operational research in Europe also in USA. Quantitative modeling is towards to solve real-life problems rather than developing scientific. Quantitative studies usually have a logical and liner structure,

Reference:
1. Liz Barnes, Gaynor Lea-Greenwood. Fast fashion in the retail store environment

2. Michael Saren, 2006 Marketing Graffti: the view from the street

3. Cholachatpinyo, I. Padgett, M. Crocker and Fletcher: a concept model of the fashion process-part 1 the fashion transformation process model. Vol. 6 No. 1, 2002, pp11-23

4. Michael Saren, 2006 marketing

5. Ka Ming Law, Zhi-Ming Zhang and Chung-Sun Leung, Fashion change and fashion consumption: the chaotic perspective. Vol. 8 No. 4, 2004 pp. 362-374

6. Helen Goworek, 2007, fashion buying, second edition. Published by Blackwell publishing.

7. Georg Simmel, Fashion, 1904, 1 (22) international Quarterley 10 (1904), 130-155

8. Constanza Bianch and Grete Birtwistle, the international review of retail, Distribution and Consumer Research: give away, or donate: an exploratory study of fashion clothing disposal behavior in two countries. Vol. 20, No. 3, July 2010, 353-368sell,

9. Anna Nagurney and Min Yu, Fashion Supply China Management Through Cost and Time Minimization from a Network Perspective.

August 2010; revised September 2010

10. Leon G. Schiffman, Leslie Lazar Kanuk and Joseph Wisenblit, 2010 consumer behavior, 10th edition, published by Pearson Education, Inc.

11. Margaret Bruce and Lucy Daly; Academic paper buyer behavior for fast fashion. Journal of fashion marketing and management Vol. 10 No. 3, 2006 pp 329-344.

12. Gerard P. Cachon and Robert Swinney; the impact consumer behavior on the value of operational flecibility. Chapter to Appear in Operations Management Models with Consumer-Driven Demand, Serguei Netessine and Christopher Tang, Editors. October 1, 2008

13. Martin Evans, consumer behavior towards, consumer behaviour towards fashion.

14. Wayne D. Hoyer, Debroah J. Macinnis (2009) Consumer Behavior. 5th edition. Printed in the United States of America.

15.Michael R. Solomon, Gary Bamossy, Soren Askegaard and Margaret K. Hogg (2010) Consumer Behavior A European perspective. 4th edition. Published by pearson education, inc, publishing as prentice Hall

16. Mark Saunders, Philip Lewis and Adrian Thornhill, 2009 Research methods for business students. 5th edition, published by FT Prentice Hall.

17. Bruce Wrenn, Robert E. Stevens and David L. Loudon, 2006, marketing research text and cases, 2nd edition, published by Best Business book, an imprint of the Haworth Press, Inc.

18. John Mangan, Chandra Lalwani and Bernard Gardner, 2004, Combining quantitative and qualitative methodologies in logistics research. International journal of Physical Distribution & Logistics Management Vol. 34 No. 7, 2004

19. J. Will M. Bertrand and Jan C. Fransoo, 2002 Modeling and Simulation operations management research methodologies using quantitative modeling; international journal of operations & Production Management Vol. 22 No. 2, 2002, pp. 241-264

1. Introduction

The fashion industry has undergone significant change and development over the last few decades, gradually transforming from a more stable industry into a very turbulent one. The change in the fashion industry is said to be driven mainly by sourcing from abroad which can be directly attributed to cheaper labour costs (Jones, 2002). The industry is practically finding it difficult to compete on price alone as a result of tough competition from countries with low labour costs (Bruce and Daly, 2006). This suggests that firms that want to compete successfully in the industry must adopt a number of alternative strategies that would ensure that they remain competitive.
Competition from low cost products has forced some fashion retailers to adopt alternative strategies. One of these strategies is fast fashion marketing. Fashion retailers such as Topshop, H&M and Zara have adopted fast fashion marketing as a means of responding to low cost competition. Fast fashion marketing has had a significant impact on revenue streams of the companies that practice it. Fast fashion marketing companies not only solicit and value customer insights but take appropriate action on those insights so as to enable them improve their competitive position (Miller, 2006). Fast fashion retailers work mainly on a basic principle which suggests that “the customer is always right”. By so doing, the companies ensure that the customer is satisfied while at the same time realising maximum benefits their knowledge about the customer (Miller, 2006).

Fast fashion retailers continuously seek to understand customer needs and preferences. In addition, they study how these needs and preferences change over time. By understanding customer needs and preferences as well as their changes over time, fast fashion retailers can develop fashion products that meet customer requirements at all times and at the same time adapt to changes when necessary. For example in Topshop, when a customer picks up a pink skirt, and asks a salesperson whether there is a complementary white T-Shirt with a plunging necklace, the store manager immediately understands the customer’s need and transmits the message to the company’s buyer’s and design team. In less than a few weeks the complementary T-Shirt can be found on the shelves of Topshop (Miller, 2006).
Fast fashion retailers are growing at an alarming rate with their growth rate calculated to be almost three to four times the rate of the apparel industry as a whole (Miller, 2006). While traditional retailers bring in new products approximately once a month, fast fashion retailer like Topshop, Zara, and H&M source approximately 300 new designs per week. This shows that the turnover of fast fashion retailers is approximately ten times that of traditional retailers. The shelf life of a garment in Topshop and other similar fast fashion retailers is approximately a few weeks as oppose to approximately six months for traditional fashion retailers. This suggests the reason why these shops are referred to as fast fashion retailers. The innovation in the fast fashion industry can be compared to the innovation that took place in the fast food industry in the 1960s. Unlike in the traditional fashion retail stores where styles are dictated months in advance, fast fashion retailers depend on in-season trends for their cues. In addition, fast fashion retailers do not advertise heavily. Rather, they rely on the frequent flow of new products to lure customers into their stores. Compared to traditional fashion retailers who introduce new designs to racks just ten to twelve times a year, fast fashion retailers introduce new designs to racks approximately two to three times per week.
By creating a “buy it now” mentality, consumers of fast fashion products have been made to believe that there only a single opportunity for them to buy a particular product as it would not be replenished. Moreover, fast fashion retailers have made consumers to believe that their products are reasonably priced, which means that there is no need to postpone their buying decisions. Consequently consumers are forced to buy on the spot. It is therefore difficult for consumers to think that the product will go on sale. They have been made to believe that the product will no longer be available by the time they are expecting it to be on sale.
Fast fashion retailers therefore have significantly higher sell-through rates compared to traditional fashion retailers. This is evidenced from the fact that most fast fashion retailers are capable of selling their products at as much as 85 percent of the full price as opposed to an industry average of 60 percent. While production cost from local sourcing appears to be higher, fast fashion retailers are still capable of achieving profitability that is approximately two times as high as that of their traditional counterparts.
Fast fashion retail was a concept that was initiated by European retailers who have maintained a leadership position for some time now. However, a number of U.S companies have gained significant interest in the business model and are beginning to catch up with their European counterparts. Despite this catch up, U.S retailers are yet to fully embrace the concept. For example, Fast fashion represents only 1 percent of the U.S clothing market as opposed to 12 percent for the U.K. The companies that top the charts in the U.S include Forever 21, Charlotte Russe and Bebe Stores. These stores influence shoppers with instant messages, iPods and reality TV (Miller, 2006).
Some U.S companies have reacted to the threat of fast fashion by infusing “pseudo-fast fashion” into their business strategies. In early 2006, Target for example introduced a new series known as “Go International Series, Limited-edition collections” which was produced by up-and-coming apparel designers and was available only for 90 days. This series sent a clear message to consumers that it was a fast fashion product that will be available only for 90 days indicating that anyone who failed to purchase it within the 90-day window would be lost out. Another example of the “pseudo-fast fashion” in the U.S was by Chico who introduced the FAS. This strategy enables the company to employ frequent product flows to generate newness and scarcity thus transmitting an instant message to consumers that they may lose out if they fail to take necessary action.
While fast fashion appears to be leading the charts in the clothing and apparel sectors, one is forced to ask questions as to whether they are successful. The key question that one needs to ask is why is fast fashion marketing effective. This paper aims at providing answers to this question by conducting an in-depth analysis of a number of online fast fashion marketers. These include Zara, Topshop and H&M. The study will be looking at four key aspects of these companies. These include category management, quick response, marketing and production. Therefore, the study will be interested in answering four sub-questions:
– How do fast fashion retailers manage their categories to ensure that customers are satisfied?
– What are the strategies adopted to ensure that rapid response is achieved?
– How do fast fashion retailers source their products?
– What are the marketing strategies adopted by fast fashion retailers.
Providing answers to the above questions will enable one to understand why fast fashion marketing is successful and thus provide recommendations as to whether traditional fashion retailers can change their business strategies into the fast fashion model so as to increase their competitive position.
The study is organised under five key headings: Section 1 above provided a general background to the study and provided the objectives of the study; section 2 will provide a literature review which will focus on both theoretical and empirical literature; section 3 will be concerned with the methodology and data description; section 4 will provide the empirical findings and results as well as a discussion of the findings; and section 5 will provide general conclusions, recommendations and areas for further research.

2. Literature Review
Brun and Castelli (2008: 169) review the work of Blumer (1969) who defines fashion as “the word used to describe trends, which affirm themselves in a spontaneous way in accordance with the Zeiteist, i.e., the spirit of the age prevailing at a given moment”. This definition suggests that fashion is something that varies with time. Dealers in fashion products must therefore develop distinctive capabilities that can enable them to easily adapt to change. In other words, fashion dealers must have the capabilities necessary for delivering the critical success factors of the industry.
In response to its changing nature, fashion is no longer the way it used to be. A new type of fashion has emerged. Today, most retailers and designers talk of fast fashion. Fast fashion is a contemporary phrase employed by retailers of fashion products, which signifies that new designs leave the catwalk to the store within a very short time so as to meet up with current trends in the market (Tony and Bruce, 2001).

Fast fashion emerged from a product-driven concept known as quick response to a market-based concept known as fast fashion (Lowson et al., 1999). The main objective of fast fashion is to produce a product within the shortest time possible using the most cost efficient method. In order to achieve cost efficiency, the retailer must achieve a detailed understanding of the needs and preferences of the target market (Lisa, 2008). A number of factors are required for the success of fast fashion. These include category management, quick response, marketing, production, etc.
Category management links the retailer and the manufacturer in a more collaborative relationship (Sheridan et al., 2006). Sheridan et al. (2006) defines category management as “the strategic management of product groups, which aims to maximise sales and profits by satisfying customer needs”. Collaboration between retailers and manufacturers enables them to pool scarce resources together thereby maximising the total profits of the industry. This in turn makes it possible for high quality products to be offered at low cost to customers thereby keeping them satisfied.
As earlier mentioned, fast fashion emerged from a product-based concept known as quick response. Quick response emerged as a means of improving manufacturing processes in the textile industry with the objective of removing time from the production system (Hines, 2007). The concept of quick response resulted in lower lead times in manufacturing processes and to a more competitive U.S textile industry as well as to lower imports of textile products (Hines, 2007). Quick response is used today as a means of supporting fast fashion. It facilitates the creation of new products while at the same time pooling customers back to repeat purchases (Bruce and Daly, 2006). Speed is at the centre of fast fashion marketing (Miller, 2006). Fast fashion retailers achieve shorter cycles times by delaying decisions farther and farther along in the process (Miller, 2006). For example, Topshop is capable of changing the wash on jeans going through a factory within 24 hours; it can decide to change a short-sleeve jersey into a long-sleeve jersey within minutes following a single last-minute call to manufacturing. Rapid response depends heavily on a flexible supply chain. Flexible supply chains means that fast fashion retailers cannot depend solely on low cost production countries like India and China where labour costs are perceived to be cheap. Rather fast fashion retailers must also make use of local manufacturers who may just be their best option for last minute designs and manufacturing.
In addition to category management and quick response, fast fashion relies heavily on marketing for its success. Marketing remains the key determinant of the success of fast fashion in that it creates the desire for the consumption of new designs as close as possible to the point of creation. Marketing achieves this through its promotion of the consumption of fashion products as something fast, low priced and disposable. The objective of fast fashion marketing is to reduce cycle times from production to consumption so as to ensure that consumers engage in as many cycles as possible over any given period of time.
Unlike traditional fashion retailers who follow the annual cycle of summer, autumn, winter and spring, fast fashion retailers have reduced the fashion cycles into shorter periods ranging from four to six weeks and even lower in some cases. By so doing, more buying seasons have been created within the same time dimensions. Fast fashion retailers employ two main marketing strategies. While some operate with no advertising, others rely on advertising. Primark for example does not invest in advertising. Rather, the company invests in the store layout, shop fit and visual merchandising thereby creating an instant hook. This hook results in an enjoyable shopping experience which in turn leads to the continuous return of customers. Evidence suggests that approximately 75 percent of customers make their decisions within 3 seconds while standing in front of the fixtures. By not spending on advertising, Primark is able to pass these cost-savings to customers through low prices (Sheridan et al., 2006).

In line with this requirement, fast fashion marketing has been developed to enable fashion dealers easily respond to current and emerging fashion trends in a fast and efficient manner.
Fast fashion marketing can be defined as “the strategies that retailers adopt in order to reflect current and emerging trends quickly and effectively in current merchandise assortments” (Sheridan et al., 2005: 301). The speed by which decisions are made, as well as the innovations introduced into the store determine how sourcing and buying decisions are combined in the fast fashion industry (Bruce and Daly, 2006). Consumers of fashion products grow strongly and vigorously on constant change, which means that new products have to be introduced frequently to keep up with the pace of change (Bruce and Daly, 2006). Fast fashion companies can achieve this fast turnaround by making contacts with new suppliers with different products in addition to updating and maintaining relationships with existing suppliers who through an understanding of change in the fast fashion industry as an ineluctable factor that determines competitive advantage have developed capabilities to deliver it (Bruce and Daly, 2006). Buying activities therefore play a critical role in the industry through the selection of suppliers and product decision making (Bruce and Daly, 2006). Buying in the fast fashion industry has therefore changed from a pure strategic decision, which was considered less important to a strategic decision, which must be treated with some level of caution.

The fast fashion retail market can be divided into different segments. Three main segments have been identified. These include luxury, high street, and supermarket/out-of-town discounter. Competition in the clothing market has increased recently owing mainly to the entrance of supermarkets into the clothing sector. Supermarkets have made it easy for customers to buy fashionable clothing as part of their weekly shopping. This has reduced the amount of time spent visiting the high street. One of the major fast fashion retailers is Zara. The company has a rapid stock turnaround and is vertically integrated to its supply chain. According to the Economist (2005); and Stabe (2005) Zara is the market leader in the fast fashion industry. The company focuses on a limited range of products as well as on basic shapes. This enables it to deal with a very narrow product range. Fast fashion does not apply to the whole range of products in a store. Approximately 80 percent of products may be core products with fast fashion accounting for just about 20 percent of the entire product range (Mintel, 2002).
A number of empirical studies have been conducted following the emergence of the fast fashion industry. Most studies have focused on how this has impacted the supply chain of the fashion industry. Christopher et al. (2004) for example argues that the emergence of fast fashion has led to significant changes in supply chain operations. The study argues that product life cycles have become shorter as a result of fast fashion. In addition, impulse buying has increased as well as demand fluctuations. Moreover, higher demand fluctuations have made it difficult for demand to be predicted. Forza and Vinneli (2000) provide explanations for shorter product life cycles. Accordingly, they argue that because consumers have increased their desire for new products and variety, it is difficult for a particular product to stay for long thereby leading to shorter product life cycles (Forza and Vinneli, 2000). Consumers’ desire for new products and variety has been attributed to the higher media availability of fashion trend-based and “gossip” magazines (Doyle et al., 2006). Birthwistle et al. (2003) argues that the supply chain needs to be structured in such a way that facilitates rapid response as this can significantly benefit fast fashion retailers. This is because; time has become a key dimension of desirability in a fashion sector that is also characterised by high levels of demand unpredictability. While Christopher et al. (2004) advocates close-market or domestic sourcing as a solution to rapid response for fast fashion retailers, Finiton (2005) argues that while this may provide some benefits, the domestic or close-market sourcing model is best suited for international fashion retailers rather than to national retailers. Besides, it has been argued that rapid response is not determined mainly by the supply chain. Rapid response depends mainly on the requirements of the market and not on the proximity between the retailer and the supply chain (Abertnathy, 2000; Lowson et al., 1999). Fashion retailers are therefore urged to focus on understanding market requirements rather than trying to figure out which supply chain best suits them.

References

Bruce, M., and Daly, L. (2006), “Buyer behaviour for fast fashion”, Journal of Fashion Marketing and Management, vol. 10 No. 3, pp. 329-344
Brun, A., and Castelli, C. (2008), “Supply chain strategy in the fashion industry: Developing a portfolio model depending on product, retail channel and brand”, International Journal of Production Economics, vol. 116, pp. 169-181.
Hines, Tony, and M. Bruce. 2001. Fashion marketing – Contemporary issues. Oxford: Butterworth-Heinemann.
Hines,T. (2007) Supply Chain Strategies, Structures and Relationships, in Hines, T. and M.Bruce. Eds. Fashion Marketing Contemporary Issues 2nd Edn. Oxford, Elsevier
Lowson, B., R. King, and A. Hunter. 1999. Quick Response – Managing the Supply Chain to Meet Consumer Demand. Chichester: Wiley.
Miller, C. (2006) “Fashion’s New Fast Lane”, available online at: http://www.forbes.com/2006/09/13/leadership-fashion-retail-lead-innovation-cx_ag_0913fashion.html [ accessed: 23rd December 2011].
Muran, Lisa. “Profile of H&M: A Pioneer of Fast Fashion.” Textile Outlook International (July 2007): 11-36. Textile Technology Index. EBSCO. Mary Couts Burnett Library, Fort Worth, Texas. Available online at: <http://lib.tcu.edu.ezproxy.tcu.edu/PURL/EZproxy_link.asp?url=http://search.ebscohost.com.ezproxy.tcu.edu/login.aspx?direct=true&db=tdh&AN=27084147&site=ehost-live> [accessed: 26th December, 2011].
Sheridan, M., Moore, C., Nobbs, K. (2005) “Fast Fashion Requires Fast Marketing: the role of category management in Fast Fashion Positioning”, Journal of Fashion Marketing and Management, vol. 10, No. 3, pp. 301-315.

1. Features of Zara’s business model that affect its operating economics: •Zara owns much of its production and most of its stores, while competitors Gap and H&M own all of their stores but outsource all of their production. Benetton, on the other hand, owns all of its production but goes to market through licensing agreements. •Zara places more emphasis on backward vertical integration. Production runs are short and inventory is strictly controlled. This is in contrast to industry trends of high volume production. Zara’s product cycle time from the design phase to the manufacturing phase is 4 to 5 weeks while the industry average is 6 to 9 months. The short cycle time enables Zara to commit to a bulk of its product much later than its competitors. 85% of Zara’s in-house production occurs after the season has started in contrast to 20% in-house production of traditional retailers. •Zara’s pricing is lower than its competitors, but profit margins are higher due to direct efficiencies gained from a shortened, vertically integrated, supply chain.

At Zara, a high inventory turnover rate results in minimal obsolescence costs, clearance sales or mark downs. Zara estimated 15%-20% of total sales as markdowns/close-outs vs. 30% to 40% for its competitors. This helps to preserve a strong profit margin and bolster market image as a “must buy now” destination. •Zara’s advertising expenses are minimal (avg. 0. 3% of revenue) compared with 3% to 4% for other specialty retailers. These helps lower expenses and preserve strong profit margins. Zara, in turn, invests more money in renovating its storefronts and buying prime real estate for store locations. At Zara, 75% of display merchandise is turned every 3 to 4 weeks which corresponds to the average time between customer visits. The average Zara shopper visits the chain 17 times a year. In contrast, the competition records an average of 3 to 4 customer visits per year. Zara’s image creates a “sense of urgency” and forces loyal customers to check in frequently for the latest fashions. 2. Zara’s Quick Response Capabilities – Upstream and Downstream activities: •Zara’s quick-response capability is based on improving coordination between retail stores and product manufacturers.

This coordination allows Zara to respond faster to fashion trends, thus creating a competitive advantage for Zara. Effectively utilizing information technology and vertically-integrated manufacturing facilitates Zara’s quick response capability. Upstream Activities: •Design Teams continuously track customer preferences via data sent electronically from individual storefronts. Additionally, sales data is sent upstream from the stores to give instant feedback on Zara’s new product lines generating replenishment orders for sold product.

This instant upstream feedback, coupled with Zara’s rapid product development gives Zara a compelling market advantage. •Zara sources fabric and finished products from external suppliers using purchasing offices in Europe and Hong Kong. 50% of the fabric remains undyed to facilitate in-season updating via Comditel, a subsidiary of Inditex that manages the dyeing and patterning of unfinished fabric. Delaying production of unfinished fabric allows information flowing upstream to influence Zara’s production. 40% of all garments are manufactured internally or by subcontractors located near Zara’s headquarters. This 40% represents the most fashionable, time-sensitive garments that Zara considers risky. Zara’s local production network facilitates flexibility and risk-taking on fashion trends. Downstream Activities: •Zara owns its own distribution center in Arteixo. All merchandise from both internal and external suppliers passes through this distribution center. Shipments occur twice a week to each store. Items move through the center very quickly.

For example, a vast majority of items are at the center only a few hours and no item stays at the center for more than three days. •On average, Zara spends 0. 3% of its revenue on media advertising, which is focused on opening season and end of season sales. •Product cycles through the stores rapidly, with new designs arriving every three weeks. This fast turnover results in a significant reduction of discounted merchandise. •Display shelves are sparsely stocked creating a sense of urgency (“buy now”) in the minds of shoppers, resulting in immediate sales. Location is critical for Zara to attract repeat customers. Stores are occasionally relocated in response to ever-shifting popularity of shopping districts and traffic patterns. 3. Why might Zara fail? Zara could fail due to falling into what is known as the “growth trap. ” In the beginning, Zara established itself as selling medium-quality fashion clothing at affordable prices. Zara went on to gain a competitive advantage in the industry by developing a quick response capability while at the same time maintaining low customer pricing.

As Zara begins to expand internationally, the potential to lose their competitive advantage increases. For example, in South America, Zara had to present a high-end rather than a mid-market image. This goes against the image of medium quality fashion at affordable prices that Zara had built and maintained since their inception. As Zara continues to grow, their stores may eventually be found on every street corner around the world. As a result, Zara runs the risk that their products may become less unique in the eyes of the consumer.

According to the “growth trap,” efforts to grow can blur uniqueness, create compromises, reduce fit, and ultimately undermine competitive advantage. In the end, Zara runs the risk of becoming an ordinary retail chain as they lose sight of their competitive advantage and become more like every other retail player. In order to maintain their market share, Zara should remember their roots and focus on the excellence of their existing chain with very minimal increases in selling space.