Fast fashion retailers will be forced to rethink their marketing strategies in order to head off a forecasted downturn in the market, according to experts.
A report by Verdict Consulting predicts that the trend for cheap clothing will be phased out as retailers, such as Primark and H&M, and supermarket clothing lines, such as George@Asda, come under pressure from increasing overheads and growing consumer concerns over ethical sourcing. The latter made headlines at the weekend when it emerged that Topshop – arguably one of the founders of the fast fashion sector – is apparently using a clothing manufacturer that pays less than £5 a day to its workers.
Consulting director at Verdict Neil Saunders does not foresee a complete end to the fast fashion industry but believes that inflation will start to creep back into the clothing market by 2010.
Verdict says the predicted changes are down to increased rent, energy and staff costs with Saunders adding that there is little to gain these days from moving production to countries such as China, where factory wages are rising by 10% a year.
The availability of large volumes of clothes at low prices has led to a saturation of a market that was founded on quantity rather then quality. The average woman buys twice as many clothes as in 1995 and reducing prices is unlikely to stimulate demand.
To address the problem, Saunders believes fast fashion retailers will offer more segmentation and sub-brands in their stores. Retailers in the low-cost end of the market are going to have to move away from price-led marketing strategies, he claims. Graham Hales, an executive director at branding consultancy Interbrand, adds: “They may need to communicate more on their brand and not just on the basis of price.”
The model sub-brand
Saunders heralds Marks & Spencer’s sub-brands, like the Autograph range, as a model other retailers should follow. The range is branded, marketed, advertised and displayed in stores as an almost standalone offer.
Hales thinks more brands will go down the sub-brand route, saying: “Segmentation is something totally appropriate given the amount of information marketers have available to them these days.” For instance, H&M is extending its organic cotton range this year to help raise worldwide organic cotton production
Jonathan Gabay, a consultant at Brand Forensics, believes there is a continuing desire for quality from consumers – and not just from the clothes. “Retailers will have to give the customer better quality in terms of service and customer experience,” he says. “Particularly in the fashion sector, where people are not just buying clothes but buying the brand experience.”
Fast fashion retailers, synonymous with disposability, could also be hit by customer concerns about the environment. Topshop’s former fashion director Jane Shepherdson, who is now at Oxfam, said recently that shoppers will start putting ethical considerations before price.
The ethical issue
For such concerns to be allayed, low-cost retailers will have to start factoring this into their marketing plans and budgets. Hales says: “People want to feel good about what they consume and they will need to feel the way retailers’ get goods is appropriate. There’s a need for reassurance for that.”
To overcome this, Gabay says marketing campaigns will need to educate customers about retailers’ ethical credentials, putting a further strain on already limited marketing budgets.
But Saunders is less convinced that sustainability will be a major concern for customers. “People like to say they are ethical and give lip service to it but most people don’t follow it through,” he says. “Consumers want to be ethical but it has to be well designed, especially in fashion. It has to be an extra.”
Hale agrees, adding: “We won’t see the end of fast fashion. It’s now too habitual for us.”