Fashion brands and retailers can keep hold of customers despite ultra-fast fashion giants Shein and Temu continuing to take market share.
“This is a very strange and largely unprecedented time for retail,” claims Jack Stratten, head of trends at consultancy Insider Trends at Source Fashion in London last month.
The past few years has seen the pandemic, record inflation and a boom in online shopping, resulting in out of the ordinary becoming the norm for the apparel industry.
As new mainstay trends continue to emerge, it seems the sector is still evolving at a rapid rate and much of the change is said to be being caused by two fast fashion market disruptors — Shein and Temu.
Earlier this year, marketing platform Omnisend surveyed 1,000 US consumers on their shopping habits and found 70% have shopped with the online retailers in the last year with over half (57%) shopping at Temu and 43% at Shein.
As consumers across the world continue to feel the impact of inflation and the rising cost-of-living, it is perhaps no wonder that so many are turning to the discount retailers in their droves.
However Stratten noted there is a contradictory trend taking place as the luxury fashion sector has seen incredible growth in recent years.
According to GlobalData’s Global Luxury Apparel Market to 2028 report, while capturing growth in 2024 will remain challenging due to low consumer confidence, luxury will still outperform the total apparel market in the next four years.
Stratten clarified these two divergent trends are not made up of different types of consumer. Instead, consumers are using ‘buy now, pay later’ services to buy expensive goods or are choosing to splurge on one-off luxury items a few times a year, while also shopping more regularly at value fashion retailers.
This leads to what Stratten calls ‘polarised spending’ which sees a growth in both value items and high-end products. “It’s incredibly hard to read and very contradictory in some terms,” he explains.
“Despite the fact all the economic news we see around the world is gloomy, spending is polarised: people spend a lot of money on some things and not a lot of money on others,” he says.
How can fashion brands compete against Shein, Temu in such a tough, confusing market?
- Reducing ranges
While Shein, Temu and other retailers are differentiating themselves with a vast array of products on offer, often using AI to generate new product designs, Stratten says others are finding success in reducing their ranges.
“I really don’t think there is a retail strategy for what Shein, Amazon or Walmart do, because you can’t build that,” Stratten explains. “You can’t compete.”
He highlights the success of fashion retailer and online marketplace Wolf & Badger, which is removing products from its range. “It is finding the less product it has online, the better it does overall.”
2. Building brands
“It’s never been easier to start a brand,” Stratten suggests, citing the growth of e-commerce platform Pietra, which enables influencers to quickly start their own brands and sell a range of products, including clothing.
However, he adds the sheer number of brands available to consumers has also made it very hard for fashion brands to survive for more than a few years.
One example of a fashion brand going from strength to strength is Japan’s global export Uniqlo, which is owned by Fast Retailing and has seen sales increase in recent years thanks in part to its retail strategy, which sees it opening up stores in historic buildings.
“What that does to the customer is say ‘we’re a brand that has a story, we’re a brand that actually cares about history, heritage and the quality of the products we produce,” Stratten explains.
He adds that many Uniqlo shoppers would not define the brand as fast fashion, despite its business model, thanks to the strength of its branding.
3. Embracing heritage
While British brand Dr Martens has struggled in recent years, Stratten highlights how the brand is using its heritage as a selling point.
Earlier this year the company announced the departure of its CEO Kenny Wilson alongside a muted FY25 sales and profit outlook. However, the Dr Martens’ brand remains strong, with the company reporting ‘milestone’ FY23 revenue last year.
“History matters and it works, and it’s precisely why brands like Dr Martens are still relevant,” he states.
4. Being better
Global e-commerce platform Amazon recently announced plans to start shipping products directly from factories to consumers in a new marketplace that will closely resemble Shein and Temu’s business models.
However other companies are moving in the opposite direction.
US supermarket Walmart, for example teamed up with US clothing brand American Giant to create t-shirts celebrating 4 July that were made in the US. With the slogan ‘American Made’ on the front and the t-shirts retailed for $12.98.
“The real opportunity is not copying them,” Stratten shares, “it’s doing something different. It’s trying to be better.”
Source from Just Style
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