While the fashion industry continues to flourish with the latest pieces, there has been a new trend that has disrupted traditional retailers. This new trend is known as fast fashion, and it has become popular amongst the targeted market of young consumers. It has changed the way consumers make purchase decisions on clothing today. Due to the increased pricing of clothing, many consumers have switched to purchasing inexpensive versions to keep up with the latest fashion trends. Shoppers are becoming price sensitive and using price comparison websites such as PriceReel to find the best deals.
Moreover, the retail segment is a crowded one, and one may say perfect competition exists because of this. Traditional retailers are now facing more competition from stores such as H&M, Inditex’s Zara, Arcada, Benetton and Gap. These competitors are making it difficult for traditional retailers because they all offer similar products, targeting a similar demographic. This demographic includes young, “metropolitan” adults aged 20-30, otherwise known as Generation Y, who are just jumpstarting their careers, have minimal disposable income and high student debt. This means purchasing expensive pieces of clothing is not of high importance to these consumers. According to research conducted by retail expert Judy Harrison, “good value” is the most important criteria for this demographic when deciding where to shop. This leads us to believe that these consumers see H&M’s low priced, fashion forward clothing as “good value.” So what should traditional retailers do with this latest fashion trend?
Traditional retailers must modify their misaligned promotional strategy with the right changes, in order to take advantage of the segments being neglected by their competition. On the other hand, there are some things that traditional retailers are doing well. For example, studies show that “fit”, “fiber content”, “style”, “color” and “product quality” of clothing are important to consumers and that they also value country of production. Traditional retailers meet almost all these important factors with the high-quality material and fiber content of their clothing that’s usually produced domestically and “sweatshop free”. Will fast fashion domination continue, or will traditional retailers be valued once again?