The fashion industry is renowned for being
highly competitive and fast changing. The UK clothing market is worth over
£28bn and 11,017 businesses in this market are all fighting for a share. Today,
a product at any market level of the fashion industry must achieve the correct
balance between price, quality, creativity and wear-ability. Even with all
factors considered, business have to protect themselves in the long term from
risk and operating in this market means brands can go out of ‘fashion’ just as quickly as last seasons
colour.
Away in which many brands protect themselves in the long term is by
creating a successful marketing campaign. The words ‘fashion’ and ‘marketing’
are virtually interchangeable. Marketing can be used to resituate themselves in
the market, distinguishing their brand from other clothing companies, it can
link the brand with a certain style; and therefore attract a certain target
market, all in the aim to form consumer loyalty. Some of the most successful
marketing has been done by brands such as Jack Wills, Ralph Lauren, Lacoste,
etc. What they all have in common is the brands represent heritage, and people
believe that when they buy their clothing, it will help them portray a heritage
of their own, creating an identity. Through clever advertising these brands
have linked the companies style with a high price point suggesting luxury, and
therefore the legend of the brand full smoothly into place. Consequently,
everyone wants to own a piece of the legend. This distinguishes them from other
high-street stores, resulting in consumer loyalty and this protects them from
long-term risk. However it's important that the marketing promotes to the
correct target market to create brand association, and example of this is going
wrong is Burberry in particularly its iconic check pattern, which became
associated with ‘chavs’. Although Burberry was lucky with its long history of
heritage, Burberry has been able to become successful once again in emerging
markets and has made a full recovery in the UK. Therefore through marketing and
forming a brand creating consumer loyalty, this protects the business from
long-term risk.
Another way that businesses can protect themselves from risk in the
UK market is to expand abroad. Topshop open the store in New York and aims to
exploit the gap of cool mid market fashion for trend lead fashion. Their
promotional concept connects the New York store to Topshop strong links with
London, which helps build the brand as the US market aspire to the UK for
fashion, which enables Topshop to benefit from economies of scale. By being
into countries, this spreads the risk of the brand in the long term. With the
added benefit of expanding overseas enables access to emerging markets, not
only for cheaper resources and labour, but also to benefit from an increase in
middle class and the demand for western lifestyle. UK luxury brands such as
Burberry and Mulberry have done well form expanding in China due to the passion
consumers have for British heritage brands. When the UK has an almost saturated
luxury fashion market, the Chinese market is booming. However by expanding
abroad, this brings in new threats of competition, although the fashion
industrious is so global, the chances are they're all ready competing against
them in the UK market therefore isn't a problem overseas. China has also
provided opportunities for more affordable brands such as NEXT and ASOS due to
the increase of low-paid wages and consumers looking for more mid-priced
fashion. Therefore expanding abroad and taking advantage of emerging markets enables
businesses to spread the risk and protecting themselves in the long term from
just the UK market fluctuations.
Fashion is not art; its business, therefore being cost-effective is
one way of staying competitive in the market. A way of doing this is shortening
the supply chain. Through clear focus on the demands of the consumer, Zara has
tapped into the power of fashion. It shortens the conventional supply chain
response from 5 to 7 months to 2 1/2 months which in such a highly competitive
and fast changing market allow Zara to become market leader for high-street
fashion, making consumers eager to get next week's fashion, compelling them to
frequently visit stores due to the two week turnaround of merchandise, this helps
generate cash, reduce inventories and eliminates the need for significant debt.
Zara sells it self to consumers as low cost but high-fashion quality. They
don't waste money on advertising; they believe the money should be spent on
producing the best product (this is their selling point). Zara only spends 0.3%
of revenue on promotion, when its competitors spend 3 to 4%. Zara’s success has
shown that fine-tuning the supply chain is no longer a strategic plan, but I
necessity in order to stay competitive. Supply chain management can provide
sustainability in such a competitive market differentiating themselves from
their competitors eliminating them from risk in the long term.
Many fashion brands have diversified into offering new services and
products. This might be to add to brand image, add to the brand experience or
to keep up with technology and shopping habits. For whatever reason
diversifying their brand may help spread risk. Now fashion is one of the largest
categories online. Fashion addicts now regularly by clothing over the web for a
site such as ASOS, YOOX, My-Wardrobe and gilt groups, all these online
retailers prove hard competition to the branded stores as the online brands
have much lower overheads, which enables them to charge lower prices. This
makes it harder for high-street stores to remain competitive. Therefore brands
such as Burberry, Topshop and Ralph Lauren have tried to add to the shopping
and brand experience but opening cafes and restaurants inside their flagship
stores. This is the way of competing against online websites however building
huge flagship stores in cities all over the world is a strategy that cost them
billions. In order to compete with online sites like eBay, brands have developed
apps and gorgeously deliver packaging and enable customers to shop 24 hours
which is a convenience that seems to trend due to busier lifestyles. Therefore
it's important that businesses cover both virtual shopping and physical in
order to compete in the market successfully and by competing in both spreads
the risk.
In conclusion I believe that in the UK clothing market it's
essential to secure a competitive advantage based on quality, unique design,
technology or trend to eliminate the level of risk. It's important that firm
spread their level of risk in the fashion industry, as it can be so
unpredictable. Therefore my first solution was the ability to build a
successful brand name through marketing creating consumer loyalty. However it
will depend on the success of the marketing strategy as consumers are highly
sophisticated, and they can decode marketing so swiftly and effectively that
the message is not presented in a suitable and elegant manner, it's actually
damages the brand. My second solution to risk in the UK market was expanding abroad
and taking advantage of emerging markets. However the success of this
method will depend heavily on the other countries culture, tastes, spending
power, language, competitors, exchange rates and style of marketing that
appeals to their particular style of fashion demands. Also whether there is a
gap in the market for their brand. With all this considered expanding overseas
should provide opportunities to the UK fashion retailers, and protects them
from risk but it also comes with a high level of risk. Thirdly, firms should
consider how cost-effective they are like Zara and their short supply chain.
However Zara's risk will depend on how they maintain a high fashion and quality
product with such short and cost-effective supply chain. Also will a business
like Zara, who does very little advertising, be able to protect themselves in
the long term from risk as other fashion brands catch up with the supply chain.
Finally I looked into how firms diversify to add to their brand experience to
compete against the likes of eBay. The investment into restaurant apps and
flagship store is what depend on whether people are willing to pay extra for an
experience, or are consumers more bothered about price and convenience.
Personally I think it depends on the type of brand and market level, but either
way, it's vital they either sell themselves as a brand experience or a low cost
and convenient to remain competitive and reduce risk in the long term. However
the main problem with this evaluation is that it's about the fashion industry.
Tomorrow, everything will have changed.
