‘Retail has a tough path forward’ screamed the headlines in the United States recently, after two iconic fashion chains posted dire quarterly returns. The last two years have been disastrous for fashion retailers across the globe, and New Zealand has not been immune to this, with several high profile names closing their doors recently. Declining foot traffic to malls, and the seeming ever-decreasing prices offered by fast fashion stores are crippling the mid-range fashion retailers.
While it might be overly simplistic to blame it on ‘the recession,’ the facts don’t really stack up. GDP has been steadily creeping upwards and is expected to rise from 2.9% this year to 3.5% in 2018. Unemployment is less than 5% and there has been a slow but steady climb in both the minimum and the average wage over the last twelve months. So what is the cause – and how can we react to it?
The first problem is the supply chain. This is the term for the ‘chain’ linking the sourcing of the elements of any product, the factories where these products are transformed into merchandise, and the distribution network which delivers those items to the customer. There are 101 stages in the supply chain, the first being ‘designer attends fabric show’ and the last, ‘order ready for shipment,’ says Lucy Siegle, a British journalist who specialises in writing about ethics in the fashion industry.
Ralph Lauren, one of the US designers who have openly admitted they are struggling, have acknowledged their time frame, from design to availability, is eighteen months. They hope to reduce this to nine months, but the truth is that fashion designers are going to have to become more agile and nimble around their supply times. Those that go from idea, to design, to a complete garment ready to sell, in the fastest possible time, will win this race. And that is because speed of production addresses the second problem – consumers want it now, not next season. There is very much a ‘see now, buy now’ trend – with the technology available now through applications such as Instagram and Facebook, the consumer gets to see the latest designs months before they are available to purchase, and trends can seem out of date by the time they hit the shelves.
In the past, high fashion brands have been slow to react, they have held to their pre-set calendars of two seasonal releases a year, and have not been willing to adapt to this new market force. But the instant fashion trend is gaining a foot-hold overseas, as the traditional fashion cycle does not meet the consumer’s demand for instant gratification, and shoppers lose interest the longer it takes from seeing a garment to it becoming available for purchase. The winners in this race will be the designers willing to adapt to these new market forces, and the demands made by the customer. As of course, it is the hand that holds the wallet that holds all the power.