For many, Forever 21 filing for Chapter 11 bankruptcy is a wake-up call for the fast-fashion industry. There is a challenge for brands to stay relevant and favored, and as always, there are great opportunities for those who understand where consumers are moving toward.
Some analysts have mentioned that the Forever 21 crisis was primarily caused by a slow digital transformation compared to competitors. But it is impossible to deny that environmentally conscious consumers are reacting to the incredible growth of consumption in this category. According to the Wall Street Journal, in this decade, we are buying five times more clothing than we did in the ‘80s. According to the UN, this growth has made this industry become responsible for 10% of all global greenhouse emissions and nearly 20% of all industrial water pollution annually.
It seems that catwalks and eye-catching store windows have not been able to distract new generations of consumers from realizing the impact the fashion industry is having on our planet. And sales are now seeing that impact. According to Mintel, in 2018, 30% of consumers bought clothing once a month. Two years before, it was 37%. Consumers are buying less garments. Some brands like H&M are creating campaigns for recycling and signing commitments to be more sustainable, but that doesn’t satisfy consumers.
What are the main opportunities for brands? Perhaps the best inspiration comes from sectors like the automobile industry where they are embracing the idea of a manufacturing industry that is transforming into a service one. There are many startups emerging all over the world with the idea of selling and buying secondhand clothing. In Argentina, for example, the startup Galpón de Ropa now has five stores, more than 60 employees and around 30,000 garments traded every month. Thousands of businesses based on renting clothing are booming all over the world. Fashion brands have now the opportunity to lead, not just with design and production but also by helping to extend the life of the garments.
It is time for the clothing industry to go back to basics: quality and durability. For decades, this has been a category where design, inspired by famous designers’ collections, was the key factor for marketing success and consumer preference. Now, quality is clearly a key brand promise again. And that is incredibly intriguing in a world where everything moves at a very fast pace where it seems there is no place for fast-fashion.
The opportunity for fashion brands that redefine themselves as services and not just as manufacturing is about showing how to rewear clothes. Their responsibility does not end with selling the item but generating, curating or sponsoring the content that helps customers to make the most out of every garment. According to YouTube trends, there was an increase in uploads of videos related to “hauls” with “sustainable” in the title and 13 times more views of those videos in the last year. YouTubers, influencers and celebrities are doing their job.
Citizens in western countries want to reduce their consumption (“Stop consuming” has been one of the top three claims on Greta Thunberg’s strikes). Perhaps, for the first time in the history of capitalism, having more does not mean you live better, and cheap is no longer a synonym for an opportunity to buy more. For the increasingly aware consumer, cheap means that someone else is paying: the worker in a sweatshop—or, ultimately, our planet.
The main opportunity for fashion brands that have built considerable equity is attracting those consumers that are ready to buy fewer cheap items and instead invest in better, more expensive and durable ones. We all know that price elasticity is a way of proving the value of a brand. Consumers that buy a more expensive brand instead of dozens of items from a cheaper one are actually demonstrating the equity of those brands.
Competitive advantage is less about the lower prices and more on brand associations. That’s why brand building, storytelling and great content is more important for fashion brands than ever. And that is, ultimately, very good news for the marketing world.