Fashion And Freshness Create

In early July, the stock price of fast fashion group boohoo was close to an all-time high. Then there was the scandal: the company was suspected of violating labor rights and was involved in charges related to the outbreak in Leicester, UK.

The financial impact of the news was rapid and brutal. Last month, boohoo's share price fell nearly 35%. Retailers including next, ASOs and zalando have taken the brand off their platforms. Aberdeen standard investments, one of the company's largest investors, sold its shares.

Fast fashion is facing increasing scrutiny, and consumers, investors and regulators are criticizing the social and environmental impact behind low-cost, high-volume retailers. In just the past few months, companies such as ASOs and Amazon have been ousted by unions for failing to create a safe and hygienic working environment in their warehouses. Brands such as Primark and Urban Outfitters are strongly opposed by the public for not paying their suppliers in full. They also sparked a global campaign called payup to urge brands to deliver on time.

But the performance of these companies doesn't seem to be affected to a certain extent by the anger consumers show on social media.

Sales of ASOs increased by 10% during the outbreak compared with the same period last year. When Primark's UK store reopened on June 15, as many as 100 consumers queued outside. Boohoo is also showing signs of recovery, although its share price is still below its all-time high on June 17, the company's share price has begun to pick up at the end of July.

After years of exposure, the negative phenomenon of booo has been reflected in the fashion world. This is a deep violation of human rights and has also affected the spread of the epidemic. According to a statement released on 8 July, it has conducted an independent investigation into the supply chain and manufacturers and has committed to spend 10 million pounds to eradicate such violations. But on the other hand, a $5 dress is still attractive to many consumers.

Convenient and affordable

In fact, the epidemic may help to deepen the influence of affordable fashion, especially for e-commerce platforms with attractive advertisements, frequent discounts and easy to buy. With the U.S. in recession and unemployment at an all-time high, financial distress may increase consumers' attention to prices, rather than environmental and social factors.

Even before the outbreak, consumers expressed interest in sustainability only to a certain extent affected their actual purchasing behavior. In the fashion industry trends in 2019 released by the global fashion agenda, only 7% of consumers said that sustainability was a key determinant of their purchase. The survey found that quality, value for money, and whether an item makes a person look like a winner are more important.

"I don't think the boohoo scandal will necessarily affect the whole industry," said aneesha Sherman, an analyst at Bernstein. "It doesn't negate the whole fast fashion industry."

To be sure, fashion companies without a strong online business will be severely hit by the blockade, but the sales growth of major e-commerce players is extremely rapid. After the recent scandal, some investors in boohoo have even increased their investment in the company. Jupiter asset management, its largest independent shareholder, increased its stake from 9.6 per cent to 10.1 per cent, a spokesman said the company saw an opportunity from a weak share price and was continuing to follow up supply chain investigations with boohoo.

Adam Cochrane, an analyst at Citibank, estimates that the company will successfully recover half of its share price decline in the short term as the market begins to realize that the scandal has not had a material impact on boohoo's sales.

Social media effects

Brands such as Zara and H & m firmly established fast fashion models 20 years ago, selling show design at easy prices and fast pace. But the rise of social media and online shopping has taken this model to a new level. New fast fashion models such as boohoo, fashion Nova and missguided are influencing and dominating the industry trend with dazzling speed.

"Fast fashion is shaping freshness and scarcity. "We are conditioned by the social environment to like everything new," says Kate Nightingale, founder and chief consumer psychologist at style psychology Ltd. "brands that launch new collections every three to six months don't necessarily give us a sense of freshness. To satisfy people's immediate satisfaction, brands use past creations and revamp their product lines. "

Despite investors' shock at boohoo's recent scandal, its user engagement on social media remains high. Boohoo earned $5.5 million in media value (EMV) in the first two weeks of July, more than half of the $9.5 million in June, according to tribe dynamics, an analysis firm. During this period, 643 Internet Celebrities posted about the company, compared with 870 in the whole June.

The continued popularity of fast fashion brands can be attributed to "the great agility of these companies, which means they can act quickly and adapt to new realities," says Joaquin Villalba, founder and CEO of retail software company Nextel and former head of European logistics operations at Zara.

Fast fashion brands that are proficient in social media are also very good at using opinion leaders and networks to build a highly interactive consumer community.

"People want to build relationships, not products or services themselves," said Zana Busby, a consumer and business psychologist at retail reflections, a consulting firm. "Successful brands are building a tripartite relationship between themselves, consumers and opinion leaders."

Sustainability of fashion

While price still seems to be an important consideration for many consumers, brands see more and more opportunities to promote sustainable fashion. The capsule series featuring organic cotton, carbon neutral and recyclable textile fabrics has become one of the common practices. Attempts in the resale market, fabric innovation and automation show that brands should reach agreement with consumers' demands while maintaining relevance.

"Innovation doesn't mean that new brands or products are constantly emerging, but retailers are trying to surpass existing trends," Sherman cites zarando, which entered the resale market, and H & M, which launched the consistent exclusive series in March last year, which mainly uses textile fibers made of organic cotton, fruits and vegetables.

The risk from regulation is also increasing, which increases the motivation of brands to meet the needs of consumers, that is, to create more ethical products. The alleged abuse of workers is linked to the new outbreak, making regulatory and law enforcement agencies feel the situation urgent. Together with more than 90 retailers, more than 50 British MPs and other social organizations, the British Retail Consortium wrote to the home secretary, Priti Patel, urging the government to take more measures to protect employees from exploitation.

Nevertheless, the resilience of the fast fashion industry is rooted in the fact that its business model already represents the price range consumers are accustomed to.

"Nothing can replace fast fashion brands on a large scale," Sherman says. "It's hard to get people to stop drinking coke unless you sell diet coke."