COVID-19 has led to crushing blows in every sector of the economy, including fashion retail. With more than 30 million cases worldwide and nearly 1 million related deaths, many in-person events and daily activities have been cancelled, impacting customers’ need to purchase new outfits. Retailers like Zara, one of the first brands to embrace the fast fashion manufacturing style, have seen sharp declines in sales, causing major panic. Specifically, Zara experienced a 31% drop in sales, and the brand was forced to close around 1,200 of its stores. This has prompted fashion insiders to wonder about the future of the fashion industry and evaluate all contributing factors to the severe sales downturn.
What is Fast Fashion?
Before diving right in, let’s try to understand the fast fashion industry itself and why it thrives. Fast fashion is impulse-driven and attracts consumers with cheap pricing. Essentially, fast fashion often replicates the designs of expensive, high-end retailers inexpensively, with cheap, low quality materials.
Fast fashion introduces thousands of new, inexpensive styles every season. With the presence of COVID-19, short-term demand has gone down on many of these purchases for which long-term demand has never existed due to seasonality and low quality. This has led many fast fashion retailers to have unintentionally overproduced 2020 inventory, and in the process of the extra apparel and garment production, they have harmed the environment and worker health.
The Rise of Gen. Z
Generation Z contributes more than $830 billion to US retail sales each year, but with the global pandemic, their spending levels have dropped more than 13%, with a higher drop expected due to virtual learning in schools. With social distancing impacting behavior and therefore clothes spending habits, this trend will affect nearly 75% of fast fashion retailers, forcing many to shut down.
Additionally, the rise of climate strikes and environmental advocacy have oriented more Millennials and Generation Z members towards purchasing high-end, less environmentally disastrous attire. This makes researchers predict that in the future, more young people will avoid fast fashion, making it difficult for the fast fashion industry to recover economically after the global pandemic passes.
More Clothes Sales & Markdowns
Fast fashion retailers are beginning to use markdowns and sales in an attempt to get rid of seasonal attire and have a chance at recovering their manufacturing spend. However, because seasonality plays a significant role for the majority of fast fashion brands, their sales are not improving, and stores have remained packed with quickly outdated attire.
This will likely continue in the future as fast fashion retailers attempt to rebuild their brands financially. But with society becoming more environmentally-conscious, researchers predict that more and more of these retailers will be forced to close their doors as more young people lean towards a mix of thrifting and purchasing high-end attire.
Higher Unemployment Rates Impact Fashion Sales
There’s no doubt that many people around the world have lost their jobs large and small businesses try to recover their financial losses. In 2020, more than 16 million Americans so far have filed initial claims for unemployment benefits, more than double the amount than during the 2008 recession.
It’s predicted that it may take months or even years for fashion brands to recover from this deep recession, making it extremely unlikely for many fashion retail jobs to be restored in the future.
While the fast fashion industry has been struggling significantly with the rise of COVID-19, it is likely that it will survive post-pandemic, but it will continue to struggle to attract young shoppers, restore lost jobs, and rebuild financially. However, the future of high-end brands and thrifting with younger people looks bright post-pandemic.
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