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Global fast fashion giants set the trend for success in this space

"When it comes to fast fashion, Zara’s place is quite influential and its supply chain success story is one of the few in the industries to reckon with. It has over 2,200 physical stores globally and ventured online relatively late on (in 2010). Its model also differs from other store focused clothing businesses. Moving starkly away from 8 to 12 weeks cycle, Zara updates designs and ships new product to stores on an average two-week cycle, which is quite a daunting task. Design teams crunch masses of daily store data to inform the trends they are designing for. It employs a batch testing approach whereby small runs of designs are tested (in Zara’s case in store and online), and if the data says there is customer traction, then more inventory is quickly ordered and shipped out to the stores."

 

Global fast fashion giants set the trend for success in this space 002Fast fashion has been gaining prominence globally despite challenges. For consumers, it must seem to be a ‘one size fits all’ template for fast fashion but there are multiple models in operation. Starting from social sellers, to online pure-plays, multichannel giants, and more traditional store focused value-based models, fast fashion has been a winner in every format as displayed by leading global retailers.

Zara, the best example

When it comes to fast fashion, Zara’s place is quite influential and its supply chain success story is one of the few in the industries to reckon with. It has over 2,200 physical stores globally and ventured online relatively late on (in 2010). Its model also differs from other store focused clothing businesses. Moving starkly away from 8 to 12 weeks cycle, Zara updates designs and ships new product to stores on an average two-week cycle, which is quite a daunting task. Design teams crunch masses of daily store data to inform the trends they are designing for. It employs a batch testing approach whereby small runs of designs are tested (in Zara’s case in store and online), and if the data says there is customer traction, then more inventory is quickly ordered and shipped out to the stores.

Many designs are made into finished products locally (around half in Spain or nearby European countries).Global fast fashion giants set the trend for success in this space 001 Compared to the traditional seasonal orientated retailers, who operate on lead times which can be up nine months, this gives Zara the edge when it comes to being on-trend and staying relevant. Another key to its ability to stay relevant is only committing to 50 – 60 per cent of their manufacturing in advance versus the 80 – 90 per cent typically adopted by competitors, enabling it to react far quicker to changes in trends, maintaining its ability to fulfil customers fashion focus.

H&M, another showcase of fast fashion

Swedish brand H&M is another successful example of fast fashion. Its supply chain is completely in contrast to Zara. It has longer average lead times (varying from a few weeks to multiple months), and typically places larger order volumes putting more stock at risk of markdown. Recent poor performance has led H&M to invest in its supply chain as it seeks to adapt further to the fast fashion model, introducing greater levels of automation, and looking to reduce lead times as it tries to stay on top of trends.

Fashion Nova in US

Coming to the US market, Nova is a master of the social selling model, using a network of Instagram stars as affiliate marketers. For years since their launch Nova has grown to more than 600 people, who produce roughly 500 new designs a week. Fashion Nova source their clothes in the US and partner with close to 500 sewing factories in the Los Angeles area. About 80 per cent of its products are made in LA and Fashion Nova marketing is delivered via a network of 3,000 influencers that reach tens of millions of fans. These local social media influencers work as brand ambassadors and share their photo along with a ‘coupon code’ with strategic posts. This tracks back the efficacy of that post or representative.

Success traits

Consumers in the 16-30 years’ age group wants to experiment with their clothing, thanks to continuous feeds of the latest media streamed to their pockets, creating an insatiable appetite for all things ‘new’. In order to be successful, one needs to continuously keep evolving. But the challenge doesn’t end here… alongside product, deliver model also needs to evolve such as the one which Amazon is currently testing – a one hour delivery window. Meanwhile, fast fashion companies need to stay in constant touch with people through their social media handles to gain a competitive advantage.

With average return rates for fast fashion clocking around the 20 to 25 per cent, there needs to be an efficient returns channel in order to be a real differentiator. With an aim to cater to global audience, near-sourcing and more onshore manufacturing are increasingly being adopted to speed up lead times, and as fashion trends are changing more quickly and the demand for newness hots up, more demands are being made on manufacturers to become more agile.

 
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