Posted by Alex Jackson on 6th Jul 2018
Leading fast fashion retailers have been making headlines a lot recently but not for good reasons. The industry leaders in the inexpensive and disposable world of fast fashion, have had their fair share of controversies of late from offensive advertising to concerns about unethical manufacturing practices, but there are some more troubling signs for these retailers that a rocky road may be ahead.
It’s been reported that H&M is sitting on a massive glut of excess inventory. Just how extensive is it? Its estimated to be about $4 billion dollars’ worth of excess inventory. Even with H&M’s 4500 locations globally, this is no small task to move a mountain of goods like this. So why the slowdown in demand from consumers for fast fashion? It’s a diverse mix of reasons but let’s start with the big one, money. The global recession of 2008 drove a lot of consumers to drastically rearrange their spending priorities and fast fashion certainly benefited from this trend. Consumers traded in their name brand apparel for these cheaper alternatives out of necessity but as the global economy began to improve so did the desire for better quality goods. Domestically the United States has enjoyed in the last several years a steadily declining unemployment rate combined with a slow but steady increase in wages allowing consumers to once again afford that quality name brand apparel that was put aside during the economic downturn.
Since the 2008 global recession consumers have also drastically shifted the way they make their purchases for apparel and fast fashion retailers are struggling to adapt. Online retail has essentially thrown a monkey wrench into their business models, these retailer’s formula of low cost items and rapid turnover simply does not translate as effectively to online retail. It’s one thing to load up a store with thousands of units of merchandise selling for less than $10 a unit in many cases. Quite a different story if they are expected to ship a $10 item thousands of times and offer free shipping. The already thin margin turns into a nonexistent margin very rapidly in a scenario like this.
Last as consumers become increasingly brand conscious again they are also becoming more aware of what the brands they wear represent. Fast fashion has been associated with some of the worst manufacturing disasters of recent history and consumers are aware and taking steps to avoid manufactures and retailers who are jeopardizing lives for the sake of inexpensive clothing. Higher end brands with big margins can afford to take corrective measures to ensure that their goods are produced safely and in an ethical manner where many fast fashion brands tend to turn a blind eye to keep their costs to a minimum.
Now you may be wondering, how this slowdown in fast fashion helps you the independent retailer and I will explain. Consumers are once again demanding recognizable name brand apparel and the quality associated with it. The big difference these days is that the consumer post-recession is a lot savvier and thriftier. These consumers are not rushing into malls to hand over their hard-earned cash at premium retailers, instead they are hunting online shopping for the retailer with the best price and service or shopping at independent retailers who offer the same goods at discounted prices. In essence market forces have aligned to create a perfect niche between the premium retailer and the fast fashion retailer where an independent retailer like you, can sell quality name brand merchandise at a discount and reap the rewards of a reinvigorated economy. At Foxliquidation.com, we offer wholesale, quality branded merchandise at a fraction of a wholesale price. Our clients are thriving and so should you!