Refreshed for 2022, our regular analysis selects one or more news stories from fashion technology, and presents The Interline‘s take on why they matter to our global brand and retail audience – as well as what they might mean for the longer-term future of fashion. As always, this analysis is also delivered to Interline Insiders by email – and signing up continues to be the best way to get a fresh look at the fashion technology news, completely free, in your inbox.
For a long time “fast fashion” has been synonymous with both fashion’s evolution and its negative impact on the environment, and in almost every way that counts, that reputation has been deserved.
Fast fashion has unquestionably been a major catalyst for industry growth: consumer spending on fashion increased significantly every year in the forteen-year period between 2005 and the start of the COVID pandemic, with much of that continued rise being attributable to easy access to affordable clothing in volume. And fast fashion alone is predicted to be worth in excess of $200 billion by 2030 – an annual growth rate of more than 5%.
Monetary benchmarking is also only part of the picture. Fast fashion businesses have also been at the vanguard of new models of engagement between brands and shoppers; social media channels, influencer marketing, and other tools of direct and indirect marketing have been deployed to great effect by brands and retailers that rely on high turnovers of new styles – and people willing to buy them – to make margin.
And, it must be said, fast fashion organisations have also had a significant catalysing effect on the adoption of new ways of working. Zara is famous in industry circles for its ability to bring clothes to market on a comparatively compressed timeline. And even if many of its products are created according to much more typical, longer calendars, those kudos were earned through legitimately pioneering investments in verticalisation, direct control of production, and intelligent links between expected demand and fulfilment. To keep pace, the competition has made similar bets as well as buying into a spectrum of different technology solutions intended to optimise operational efficiency.
Or, to put it another way, fast fashion has been one of the primary engines driving forward fashion’s pursuit of both consumer-facing and behind-the-scenes innovation. By changing the game that was being played at the point of sale, those businesses altered the way the industry approaches everything from creative design to distribution.
But the other side of the coin is equally valid. By its very nature – cheap, high volume goods – fast fashion has fuelled a destructive cycle of over-production and disposal.
Pre-pandemic, consumers in the UK were spending close to $3.5 billion on seasonal fashion items (apparel, footwear, and accessories) that were expected to be worn for one season at most – and many of which would be worn literally once and then thrown away. And with vacations now back on the post-COVID agenda for many, this pattern of behaviour could well be repeating itself right now with 2022 “resort” collections.
This is, of course, only one regional perspective. And it does not take account of the remarkable volume of fashion product that is made but never sold – still a problem outsized enough that the European Commission is attempting to codify new rules to stem the time of unsold clothing and textiles entering landfills. It’s also a problem mostly (but not entirely) of fast fashion and mass market fashion’s making; the industry has always had unsold product, but the scale of that issue must, by definition, be tied to the increase in product volumes that has come to characterise those sectors.
Fast fashion, then, has a complex legacy. The fashion industry as a whole owes a lot of its growth to the business model and the mindset that fast fashion fostered, and many of the software tools we take for granted today evolved to cater to, respond to, or run counter to the market that fast fashion created. But a large part of fashion’s current negative image is also attributable to the deeply dubious environmental and ethical credentials of its biggest fast fashion names.
This legacy has developed into something of a pattern: retailers take a step that recalibrates how consumers think about convenience or affordability, which in turn creates a heightened expectation for more convenience and affordability and so on. This constant cycle of progress (although “progress” is probably not the right word, objectively speaking) has come to define not just fast fashion but fashion entirely. We, as a buying populace, want more volume, more variety, lower prices, and faster shipping. A vocal segment of us might buck those trends, but at a cohort-wide level, brands and retailers keep bringing fast fashion to market because we keep buying it – Gen Z included.
That cycle, though, is about to take a dramatic jump forward.
For a long time, the watchword for convenience has been Amazon. Next day shipping, same-day shipping, subscription delivery, low price own brands – a lot of what we take for granted in fashion (and in CPG) was pioneered, stress-tested at huge scale, or ruthlessly refined by Amazon. But this week’s all-too-believable rumour that ultra-fast fashion organisation SHEIN is raising capital at a $100 billion (this is not a typo) valuation could spell the end of the Amazon era. Not in the sense that Amazon is going anywhere, but in the sense that the US retail giant may no longer be setting the pace.
The statistics that swirl around SHEIN have been reported on extensively elsewhere. The retailer can list up to 600,000 products at any one time, and reportedly introduces in the region of 6,000 new ones every day. Even by fast fashion standards, this is something else. And while behind the scenes SHEIN is no doubt a hugely complex, data-driven operation, its manifest identity is fast fashion on an entirely new scale.
SHEIN is also already attracting the same sort of mystique that surrounded Zara. Outside observers are asking themselves how that sort of volume is possible. Has SHEIN developed enviable new methods and new tools, or is it taking advantage of its host country’s notoriously loose interpretation of labour standards to scale up production at the cost of human rights?
The answer is likely a combination of both ingenuity and sheer brute force. SHEIN has demonstrably been able to amass and act on a huge volume of demand signals from the spectrum of social and digital channels. This speaks to a sophisticated data scraping and intelligence surfacing capability. But at the same time, the company has likely not uncovered an entirely new paradigm of manufacturing that leapfrogs the advancements made towards Industry 4.0 elsewhere, so the odds are that SHEIN is creating as many new styles as it is by transferring the pressure onto a shadowy mix of manufacturers who are simply throwing people at the problem.
This is substantiated to some degree by previous researching suggesting that 75-hour working weeks are commonplace in SHEIN’s supply chain. And new analysis published by TechCrunch contains the following take:
“What separates Shein is the responsiveness of its supply chain, a vast network of loyal and agile dingy workshops around Guangzhou, a major metropolitan in south China where most of its operations are. The company tests a great variety of cheap clothing in small batches, and if data shows that something is selling well, it quickly places more orders with these suppliers to sell even more. This demand-driven approach allows Shein to maintain low inventory costs.“
It’s worth pointing out that labour exploitation is by no means a new part of the unscrupulous big brand toolkit. Just yesterday Amazon itself pushed back against a landmark unionisation vote in one of its warehouses by suggesting that its workers only voted to unionise as a result of coercion.
But there is a fundamental difference here: Amazon has already reached the apex of its ability to scale its retail operations. While the company will continue to grow further through other revenue streams – notably AWS – the additional money to be made in its retail and distribution network is going to be realised by the pursuit of cold, calculating efficiency. SHEIN, on the other hand, may have been around for more than a decade, but investors are betting that its biggest days are ahead of it. And as a consequence, SHEIN will need to keep growing; an engine that brings in a billion in new capital will need to keep finding higher and higher gears when those investors come calling for their returns.
So The Interline would encourage all of its readers to remember one thing. If this valuation is committed to paper, then SHEIN is going to make a lot of headlines for ushering in a new era of convenience and a new, even lower, floor of affordability in fashion. But it’s going to be creating that picture of tomorrow by simply leaning even harder on the already blunt tools of yesterday. And if that strategy succeeds, then fast fashion’s damaging legacy could be set in stone for a whole new generation to come.
