Many companies serving the teen market (think: Wet Seal, Delia’s, Urban Outfitters, Abercrombie, and even American Apparel) have been taking a serious sales and profit bath over the past twelve to eighteen months. Where have those sales gone? Blame it on Fast Fashion. Fast Fashion retailers include H&M, Forever 21, and Zara. They have many similar traits. The clothes are low-priced but stylish, styles cycle in and out of stores (and web sites) as quickly as every three weeks. That means, the product is turning well over twelve times a year, when traditional fashion retailers get excited at turns of 6 or 7.
Because sales cycles are so short, product development cycles must ALSO be short. In 2010, my company surveyed retailers on their time-to-volume for new product introductions. At that time, the majority reported a product lifecycle of twelve to eighteen months. That’s just too slow for a Fast Fashion world. On the flip side, Zara has long been commended on products that can go from concept to shelf in a matter of weeks, highlighting the role of mathematical inventory optimization in Zara’s decision-making. The short way to describe this concept is to say if you’re going to fail, fail fast. Don’t take eighteen months to do it.
Forever 21 is considered a “fast follower.” That means the company creates less expensive versions of fabrics and styles soon after they’ve been shown on runways or other high end stores. The company has been sued for all kinds of things: from ‘stealing’ designs to collecting too much information at the Point of Sale. But customers keep shopping and product keeps selling.
H&M seems to be a hit wherever it opens, and while it caters to teens, middle-aged women seeking the hip factor in their lives also shop there. After all, the product is cheap enough that a fashion faux pas can be easily forgiven and forgotten.
The long and the short of the situation is this: today’s teens aren’t interested in wearing someone else’s logos to define their identities. Instead, they mix and match their own selections, and when they get tired of them, they move on to something else. The clothes don’t need to last. They just need to look good for a while. Traditional product developers have had a heck of a time knocking off the knock-offs. Their supply chain cycles are longer than the demand cycles of the products they’re selling. That’s a hard business model to sustain in today’s world.
Ultimately, the entire retail apparel world must adjust. Two keys to success are speed to market and responsiveness. Fail quickly. Succeed quickly. And move on to the next product. Logos are yesterday. Today is all about something else. And the Fast Fashion retailers will be there to figure out where it is going tomorrow.