Fast Fashion Industry, Is The Era Of New Differentiation Going Down Or Prosperity?

Bankruptcy rumours flew on the Internet for several months. In the end, Forever21 confirmed that it had filed for bankruptcy protection under the eleventh chapter of the bankruptcy law.

As early as the end of last year, Forever21 had already shut down stores in Tianjin, Hangzhou, Beijing, Chongqing and other places, and in April 2019, Forever21 Tmall and Jingdong flagship store were also suspended.

In recent years, fast fashion has fallen rapidly, not just Forever21.

In November 2016, when Marsha general store announced that it had closed all the shops in the mainland, it closed the Tmall flagship store in early 2018, and completely withdrew from the mainland China's retail business from offline to online. In 2016, it opened the Topshop of Tmall flagship store with the cooperation of Shang pin network. It was less than two years later to announce Tmall's closing shop in November 2018. The New look, which had set up 500 stores in 3 years, closed all stores in 18 years and withdrew from the Chinese market.

Local fast fashion brands are also having a hard time.

Metersbonwe's 2019 semi annual report shows 2 billion 699 million revenue, but 138 million loss, net profit fell 360%. Even the "Chinese version of ZARA" La Natsu Bell this year also "Thunderstorm", according to its earnings report, net profit in the past six months, 565 million yuan, 2470 stores closed, retail outlets shrink 26.65%.

When the loss of traffic dividends, the consumption scenario and demand change, the weak market has sounded the alarm for the fast fashion industry, and the fast fashion brand with brutal expansion has ushered in the fate of successive defeat.

But where does Forever21 lose? And what opportunities are there for the fast fashion industry, which is facing a downturn?

Only "fast" has no "fashionable" Forever21.

"Fast" is really important. Forever 21 founder Zhang Dongwen once said.

Indeed, for fast fashion brands, the word "fast" is almost the gate of survival. For example, ZARA, one of the core competitive advantages of being able to keep pace with the leading position of fashion leader, is to complete the whole industry chain from product design to store shelves in 14 days. ZARA stores around the world receive two new products per week.

But outside of "fast", Forever 21 has an advantage over ZARA in terms of "cheap". The price of 4-20 dollars has become the killer of Forever 21, which is different from ZARA capturing young consumers.

Under the two labels of "fast" and "cheap", Forever 21 killed four sides in overseas markets. At its height, Forever 21 has over 800 stores in nearly 50 countries and regions, and employs more than 40 thousand people worldwide.

But "fast" can achieve a batch of brands, and it will also leave a hidden line of crisis.

According to the data of billion euro network, Forever 21 began to withdraw from more than one European market in 2016. In 2017, the Forever21 loss amounted to US $400 million.

At the same time, ZARA, H&M and GAP, as fast fashion giants, have also entered a difficult period.

Under the leadership of the new CEO Carlos Crespo, ZARA will close 250 stores in 2019 to reduce the number of stores to ensure its growth. In the 2018 annual report of H&M, it also showed that the number of 175 net stores in the world dropped to 130 and lowered the opening plan in 2019.

In contrast, GAP is worse. According to GAP's latest report, sales in the first half of 2019 fell 1.9% to 7 billion 711 million dollars, and net profit dropped 14.3% to 395 million dollars. And in the next two years, GAP will close 230 stores.

But whether ZARA, H&M or GAP, in the fast fashion and cold winter, they are actively adjusting their pace to survive for a long time. And where did Forever21 fail to apply for bankruptcy protection?

The two labels of Forever21 are "fast" and "cheap", and they are also defeated.

1, only fast, no fashion.

Take the Chinese market, when the Forever21 is rough, the market has been almost split up by ZARA and H&M. After that, with the wave of mobile Internet sweeping, fast fashion has been hit hard. At this time, the other fast fashion began to defend the city, while Forever21 was still trying to expand the shop.

In 2015, confident Zhang Daoyuan promised to double the number of global stores to 1200 in 3 years. For a long time, the focus of Forever21's work is to rapidly expand the number of stores, and the average store size of 3500 square meters is 10 years.

But what is the product of Forever21 on the fast opening store in a shrinking market?

Is it really fashionable to have a deep, V, hollowed out and high saturation color? It is almost designed for the Europeans and Europeans, and it has been selected as a daily dress for most people.

Although "fast" has given consumers a variety of choices, there are not thousands of single items in the clothes shops that have been thrown away, but few of them are suitable.

2, only cheap, no quality.

The low price of Forever21 is relative to the underdeveloped network period, compared with the brand of special brand and ZARA.

But with the rise of the mobile Internet and the maturity of the electric business, many Amoy brands are developing vigorously. They can not only provide the fashionable styles but also guarantee the quality. At the same time, the rising tide of fashion in recent years has attracted the attention of a large number of young groups. The way to cut the young people's consumption market by "cheap" is no longer the advantage of Forever21.

Consumers who buy fast fashion actually do not expect to wear a dress for a couple of years, but a T-shirt, a thick and warm sweater that is washed once, and a skirt that is worn off several times, even if it is "cheap", can not get consumers' favor again.

When ZARA and H&M began to push the designer's joint name, when UNIQLO began to develop black technology, when the Amoy brand was playing the best price, the Forever21 could not pick up a "fast" and a "cheap" thing, but what could it be?

Industry "fast" disease, "slow" is a good medicine?

The collapse of Forever 21 is a typical epitome of fast fashion at present, with market saturation and performance dive, and once gloss has gone back to its predicament.

But that does not mean that fast fashion will go down this way.

Now the fast fashion market, with the prosperity of the mobile Internet, has entered a stage of differentiation and reconstruction from the barbaric growth stage of the horse racing enclosure.

However, since it is divided and restructured, Forever21 bankruptcy and La Natsu Bell's thunder also have "slow down", seize the opportunity to successfully transform ZARA, H&M and UNIQLO.

In the first half of 2019, the sales of ZARA parent Inditex group increased 7% to 12 billion 820 million euros, the net profit of operating profit increased 10% to 1 billion 550 million euros, and the two index growth broke the record of Inditex group's semiannual growth rate.

H&M's earnings are also brightest. According to the fashion business news, in the third quarter, H&M Group sales increased by 12% over the same period last year, about 6 billion 520 million US dollars. Net profit rose 25%, or about 3 billion 180 million US dollars, gross profit increased by 13% US $3 billion 180 million, gross profit margin also increased, from 50.3% to 50.8%.

UNIQLO's performance is even stronger. According to the first half of fiscal year 2019, UNIQLO turnover increased by 80 billion 900 million yen in half a year, with a turnover of 1 trillion 267 billion 600 million yen, an increase of 6.8% over the same period last year. Operating profit reached 172 billion 900 million yen, an increase of 1.4% over the same period last year. Net profit was 114 billion yen, up 9.5% over the same period last year.

In the new stage of differentiation and reconstruction, fast fashion brands are trying to save them through three dimensions.

1, expand the "new channel".

At present, through the advantages of offline channels, driving its online development has become the most fast fashion brand's self rescue road.

In November 2018, ZARA launched online shopping channels in 106 markets around the world, developed intelligent operation system, set up a direct mail system in the global stores, built a 90 thousand square meter logistics center in Spain headquarters, opened a new zero sale store in China and Tmall, and UNIQLO also imported digitalization from the design, production, manufacture and sale to full staff through the "Ming plan", and transformed into "digital consumer retail companies".

Zhang Peiying, an honorary consultant of luxury alliance, believes that the way of online drainage through offline stores reflects the importance of online and offline interaction under the trend of consumption upgrading.

2, embrace the new group.

When 90 and 00 become the main consumers of fast fashion, we can seize the "new group" to win the second half war better.

From the boom of the national tide, Lining and Boston went to the fashion week of Milan and the exploding fire of UNIQLO +Kaws joint fund. We can see that the new consumers are pursuing the uniqueness and individuality.

According to the white paper "2018 clothing consumer insight" released by Tencent data lab, it shows that celebrities like idol stars and KOL have a strong influence on "fast fashion" consumers. The former has strong ability to carry goods, and the latter recommends that products are more likely to be trusted.

H&M, who wants to keep abreast of consumer preferences, released the first series of ANGEL CHEN x H&M with the Chinese designer Chen Anqi Angel Chen in July 2019, and chose Zhang Yixing and supermodel Liu Wen to take out advertisements for ANGEL CHEN x H&M publicity. The series of cooperation with Pringle of Scotland is also on sale. H&M also specially invited stylist and fashion editor Julia Sarr-Jamois as spokesperson.

3, injection of "new technology"

In the second half of the Internet, artificial intelligence has become the vex of all trades and professions.

In 2017, UNIQLO went online with the "intelligent buyer" device. It can greet customers in the range of 5 meters, and invite consumers to experience four sections, namely, "choose new products", "preferential purchase", "fashion wear" and "interactive play", and complete the loop from service to transaction and logistics.

In addition, UNIQLO also set up vending machines in Japan and the United States, and 24 hours + unmanned sales. Consumers can not only buy goods on their own at any time, but also make an appointment to buy other brands of merchandise through the online channel entry on the self-help vending machine, so as to achieve online and offline interoperability.

In addition to UNIQLO, H&M and ZARA have also launched the smart fitting mirror and AR shopping, showing their changes to the market by injecting "new technology".

The success of the transformation of UNIQLO has clearly reflected the great opportunities of the fast fashion industry in the new age of differentiation, while Forever21, who wants to "forever", has entered the "darkest hour" with "fast" and "cheap".

Ms. Chanel once said, "fashion is fleeting, and style only perpetuate."

The fast fashion business, which is closely related to the fleeting fashion, firmly grasps the consumers' current tastes in the changing market, and continues to bring forth the new in order to win the hearts of consumers for a long time.

Nowadays, Forever21 is just like the clothes of the season. Now it is only a sad and angry thing to go to the present "outdated" situation.

For other brands that are in time to transform, they will have to answer the question if they can keep up with the market changes.