How Ultra Fast Fashion Retailers are Taking Share from Zara & H&M
Two decades ago Zara upended the market for clothing by offering hundreds of new and trendy styles each week. Instead of only wishing you could wear what your favourite model on the catwalk was wearing you can go into a Zara store and buy a knockoff at a fraction of the cost. With more traditional retailers buying for new clothing collections many months in advance Zara’s model also greatly reduced that time, with its ability to get from design to the store in as little as three weeks.
But now a new crop of retailers have popped up and they are even cheaper and faster than the likes of Zara and H&M. These retailers are ultra fast fashion retailers and they include companies like Boohoo, Shein, ASOS and Fashion Nova.
With social media creating a need amongst young consumers to look fresh everyday these ultra fast fashion retailers play right into their hands. Zara is still the largest apparel company in the world but these companies are taking share. If you want how ultra fast fashion retailers have been able to carve out their own niche in the competitive apparel market consider these six facts.
1. Faster speed to market. Do you remember a time when the only option to purchase new styles was to wait until end of season clothing was liquidated and the looks for the new season were in store? For ultra fast fashion retailers “in season” is all the time. Fashion Nova is able to design and manufacture a clothing item in as little as 48 hours and more than 1,000 new styles are added on Fashion Nova’s website each week.
Shein, another ultra fast fashion retailer, adds between 500 to 2,000 new items on its website every day. Shein is vertically integrated allowing it to go from design to shipping in as little as three days. Commenting on the growth of Shein, TechCrunch wrote: “[Shein] manufactures in China as many apparel retailers do. The difference is Shein controls its own production chain, from design and prototype to procurement to manufacturing. Each step is highly digitized and integrated with another, which allows the company to churn out hundreds of new products tailored to different regions and user tastes at a daily rate. The strategy is not unlike TikTok matching content creators with users by using algorithms to understand their habits in real-time.”
2. A more efficient supply chain. Ultra fast fashion retailers often source their inventory closer to home. Boohoo, a company from the United Kingdom, sources a large amount of its merchandise from Leicester, England while Fashion Nova sources primarily from Los Angeles, United States. “When it comes to apparel, there’s no secret sauce,” said Felipe Caro, a business professor at UCLA Anderson School of Management “To shorten lead times, there’s no other way than doing local production.” Local production gives these retailers a leg up on other clothing retailers that source production overseas.
3. A more flexible inventory management model. Many ultra fast fashion retailers source inventory in much smaller batches at first which gives them more flexibility to respond to changing trends. “A traditional retailer might buy three or four styles, but we’ll buy 25,” says Carol Kane co-founder of Boohoo. Since Boohoo does not have brick and mortar stores it does not have to keep higher levels of inventory levels for each style in case a customer walks into a store and wants to try something on. Instead Boohoo can order small batches of a style, between 300 and 500 units and see how each style performs. Once Boohoo is aware of which items are trending it can buy more inventory of just those styles.
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4. A business model built around social media. Instead of focusing on the latest looks from the runway, a model made popular by Zara, ultra fast fashion retailers are adept at discovering and setting trends on social media. With 20 million followers on Instagram Fashion Nova has used Instagram to build a strong brand in a relatively short period of time. Customers often model Fashion Nova’s clothes on their own Instagram accounts, tagging Fashion Nova with the hopes of having their post reposted on Fashion Nova’s main account.
Ultra fast fashion brands were also quicker to embrace social media and reality TV stars like Cardi B and Kylie Jenner than mainstream brands. Both of these stars have been seen modelling Fashion Nova clothing on their own Instagram accounts. Cardi B also has her own Fashion Nova clothing line. This speaks to the fact that ultra fast fashion brands have not only been ahead of the curve on emerging clothing trends but also on the power of influencers before they became as widely used as they are today.
5. A model that embraces diverse body types. Ultra fast fashion brands are also playing a key role in redefining beauty standards. Fashion Nova’s clothing appeals to a broad audience with its website featuring models of all different sizes and ethnicities. Clothing sizes can go up to 3X at Fashion Nova. Fashion Nova CEO Richard Saghian has said: “lots of fast fashion retailers offer trend pieces at low prices with quick, convenient shipping. Fewer create items that are suited to body types not seen in typical fashion campaigns. All our other competitors were always using the same models over and over. We thought we could be a little different by celebrating body positivity and using curvier girls and the customers liked it."
Since many women are above a size large, which is typically the largest size at Zara, ultra fast fashion retailers like Fashion Nova, Boohoo and Pretty Little Things have been able to capture a broader customer base simply by offering extended sizes and targeting these consumers directly before it became more popular to do so.
6. A model where everything is new. Ultra fast fashion brands are designed for the Instagram age where young consumers are constantly documenting their lives online. For many teens the idea of appearing on social media wearing the same outfit even twice is taboo. But since many of these consumers are not wealthy but still want to show newness on a daily basis they are turning to retailers that can meet that need. It’s not that hard to have a new #ootd (outfit of the day) everyday if you are wearing a $3 top or a $12 pair of jeans from Shein. It is estimated that a dress sold on Shein costs half as much as one sold by Zara.