Sustainable Retail: Fast fashion’s last chance saloon?
Welcome to the latest sustainability column that takes a look at what retailing is doing to address the issues in its industry. Much of the ongoing focus will be on fashion but not exclusively. This month’s column takes a look at fast fashion’s precarious position – how long does the category really have left in its current format?
We are very pleased to bring this series of columns to you with the much appreciated support of our sponsor Prolog Fulfilment.
When even some clothes swapping charity events have banned the big fast fashion brands from their rails then you know that the sector really is facing a consumer backlash and while it may not yet be in the last chance saloon the signs are definitely there that peak-fast fashion is approaching.
As with all great imminent tipping points the behaviour becomes most extreme at the peak moment and China, the big global haven of unsustainable supply chains and in many ways the wild west of capitalism, has spawned two behemoths, Shein and Temu, who are slugging it out in the western markets with their eye-watering advertising budgets.
Both are trying to gain the larger consumer “mindshare” and presumably bankrupt the other. As homegrown fast fashion brands begin to noticeably recede into the distance, these Chinese rivals are fighting a very risky war of attrition that may well implode the entire bubble of fast fashion once and for all.
Their business models although different (Shein only sells clothes direct from Chinese factories around the world and Temu sells, well, just about anything produced in China to overseas customers) are predicated, among other things, upon certain legal loopholes to do with import and export duty that mean very little tax is paid by either company because individual package values are usually well below the tax-inducing threshold. Were the US or the UK to amend these arbitrary limits as there is some evidence they are minded to do, then the trading landscape would look very different overnight.
And from the consumer perspective it’s not only clothes swapping events that are getting very cold feet about dealing with any fast-fashion brands, resale platform Vestiare Collective has recently made more swingeing cuts to the list of brands that it accepts on its site. First time round Shein and the usual suspects like Boohoo, Nasty Gal were culled. This time names such as Gap and Uniqlo are for the chop as Vestiare ranks factors like the width of product ranges, speed to market, intensity of promotion, and range renewal rates to work out who’s in and who’s out.
This is important because according to any metric you care to look at, the process of reselling is rapidly entering the DNA of the consumer. If, as seems likely, the purchaser of the future will consider the onward sale potential of any purchase then not being able to sell it is a clear deterrent to buying it in the first place. And when eBay has a director of luxury then you know that the times they really are a changin’.
That same director Keith Metcalfe oversaw a Mayfair-based three-day pop up Taste of Luxury in November last year in time for the festive season because eBay’s research shows that the idea of gifting pre-loved is growing more popular all the time. Buying second hand for oneself has always been far more acceptable than buying pre-loved presents for others which has a stigma attached – but now with added protection such as Authenticity Guarantees the risk is much diminished. In its research eBay found that 41% of those asked said they would be happy to receive a pre-loved luxury gift and with the continuing impetus of bringing out new ranges every season it is the breadth of range that pre-loved can offer which is especially tempting for purchasers.
And when we say reselling is planting itself in people’s DNA, this really is borne out by surveys. One of them ‘Second-Hand, First Choice: The Psychology of Recommerce’ from MPB an Retail Economics found that 71% of consumers across France, Germany, the UK and the US bought or sold something used over the past year. In the UK that participation rate goes up to 84% for millennials and fashion is the most popular segment making up 45% in the US and 37% here – the report also noted that the resale market is forecast to grow 80% by 2028.
Temu (and Shein) are currently selling such vast amounts of goods into Western markets that probably even Amazon is a little bit worried about their market share although it remains much smaller than Amazon’s overall. Consumers are brought in via gamification and referral rewards but high levels of complaints about the shoddiness of the items (caveat emptor if you are paying £5 for a pair of trainers!) may in time hinder the repeat purchases that these companies definitely need to engender.
In the short term, geopolitical suspicion of any company emanating from China will be the biggest difficulty they have but in the longer term the perception of murky supply chains, environmental degradation and forced labour, which Temu and Shein cannot divest themselves of, will surely be the most damaging. Rather like the hare and the tortoise, resale keeps going, growing organically while the Temu hare sprints ahead but we all know who ultimately won that race.
Glynn Davis, editor, Retail Insider
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