Is the Ultra Fast Fashion Model a Blueprint for Success?

Is the Ultrafast Fashion Model a Blueprint for Success? | MakersValley Blog
Charles Meyer

Charles Meyer

It’s quick. It’s convenient. It’s affordable. It’s ultrafast fashion. A new wave of ultra fast fashion brands such as Shein, ASOS, and Boohoo, have hit the fashion industry with a disruptive business model that takes advantage of the economic and societal circumstances surrounding the COVID-19 pandemic. Their business model is aggressive, technologically proficient, and highly profitable. Their supply chains are streamlined to use online interactions and resources to provide customers with new, weekly, affordable fashions. With no physical retail locations, all you need to access their vast catalogs is a computer or phone, an internet connection, and a desire for the newest and trendiest designs. Combined with quick and convenient delivery to the customer’s door, consumers of ultrafast fashion can rock a new, fresh style in a matter of days.

However, following the time-honored tradition of “too good to be true”, this innovative business model has a catch. Its heavy focus on technology and short lead times have created an unbalanced supply chain that lacks high-quality fashion. They cut corners in order to produce quick, convenient, and affordable clothing for the consumer on a self-imposed design and delivery schedule. This begs some important questions – Is the ultra fast fashion model for quick, affordable fashion a good blueprint to integrate into your brand’s model? Or should you be wary? 

Shein OnlineImage from CNN

The Ultrafast Design and Delivery Model 

To understand why some brands find ultra fast fashion an attractive blueprint to model, it is important to understand what it is and how it improves the supply chain structure to be more efficient. At a glimpse, observations reveal that ultra fast fashion brands have mastered these two main components:

  1. Technology and E-commerce 
  2. Shortened Lead Times

Each plays a significant role in driving its overall dominance across a broad segment of the fashion industry. For one, technological proficiency provides them key insights and analytics into business operations and consumer data critical to quickly developing new, affordable clothing. Their shorter lead times push designs through the production pipeline at an increased rate compared to the traditional fashion brand. Let’s take a closer look. 

How Ultra Fast Fashion Leverages Technology and E-commerce 

online shopping for fast fashion

Pre-pandemic, the fashion industry as a whole slowly shifted toward building a strong online presence, although it still relied heavily on physical retail locations as the main B2C distribution centers. Brands regularly allocated funds in their budget to accommodate for their physical locations, as they were proven commodities that drove effective consumer spending. However, the pandemic forced a violent shift in the industry, opening the door to online-only, e-commerce-based fashion. 

With no physical retail presence, these brands built strong, technologically proficient infrastructures with the necessary tools and people in place to effectively run an online-only, e-commerce business. They implemented advanced data analytics tools, used centralized communication platforms, and prioritized social media in service of three important tasks for their brands:

  1. Trend Forecasting – Ultra fast fashion brands use artificial intelligence image recognition technologies to peruse social media and analyze fashion images. This tech collects information about specific components and attributes of these images, such as fabrics, prints, and colors, and then uses machine learning algorithms to predict future trends.  
  2. Creating a sense of urgency – Ultra fast fashion brands will encourage their consumers to stay up-to-date with their brand’s latest fashion trends by hiring influencers, planting targeted ads across social media, and creating personalized shopping experiences through data collected via online and mobile apps.  This conditions their customers to expect their new, affordable fashions at a rapid clip, while creating a recurring cycle of urgency and immediacy.
  3. Streamlining supply chain operations - These brands have created a more flexible inventory management model to enable them to produce smaller batches of inventory and monitor how each style performs in their catalog. The data collected helps determine which styles to produce more or less of in the supply chain. 

Building In Shortened Product Lead Times

delivery van loadingHow quickly can I get new, affordable clothes on my doorstep, in days? Ultra fast fashion brands answer this question through a variety of different strategies by following a distribution model similar to that of Amazon. To cut the time from conception to delivery ultra fast fashion brands will:

  1. Vertically integrate their supply chains – By operating at multiple levels of the supply chain, ultra fast fashion brands are able to control the value chain, reduce distribution costs, and maintain quality control over the production process. 
  2. Implement nearshoring – Unlike offshoring, nearshoring localizes production and shortens lead times. Shein, Boohoo, and Fashion Nova use nearshoring in their supply chains, which aids in getting their clothing to their customers at a faster, more efficient rate.   
  3. Use synthetic fibers – Synthetic fibers are man-made fibers that are manufactured from oil, coal, or natural gas. Across the global fashion supply chain, they are the most commonly found in imported fabrics, particularly in ultra fast fashion. They achieve the affordable and fashionable look consumers want, all while being cost-effective in the sourcing and manufacturing process.
  4. Place distribution centers in logistic clusters – Ultra fast fashion brands place their distribution centers in conveniently based locations to reduce shipping times. They are quick, efficient, and reliable. 

Should You Consider this Model? 

If you can get a taste of luxury fashion while not paying the luxury price tag, then why would you buy luxury? If you can get affordable fashion at your doorstep within days, why would you wait weeks for a high-end fashion product? This is not an uncommon customer mindset to consider when deciding if the ultra fast fashion model is right for you, your brand, and its business goals. 

However, consider the following before shifting your brand’s products over to this business model:

  1. Technology – Using technology is beneficial for trend forecasting, reaching a larger audience, and streamlining supply chain operations. Would investing into these resources to a greater degree help scale up your high-end brand to a wider market without forcing you to sacrifice the quality your customers have come to expect?  While ultra fast fashion brands rely heavily on tech to streamline their processes, traditional high-end fashion brands can also use many of these tools  to economize operations and achieve increased profit margins.
  2. Material sourcing – Synthetic fibers are quick to produce, cost effective to make, can be made in unlimited mass quantities over a short period of time…but (depending on textile, blend, etc.) result in low-quality clothing. Again, are you willing to risk the quality reputation of your brand by using cheaply made synthetic fibers? How would that impact your brand’s standing with the fashion press or with customers? 
  3. Distribution channels – Quickly reaching the consumer’s doorstep is how ultra fast fashion made its name. Yet, to provide the best customer experience with timely deliveries, warehouses must be placed conveniently in logistic clusters. Where will you place your warehouses to provide quick, efficient, and reliable shipping to your customers? Keep in mind, ultra fast fashion brands are vertically integrated and use nearshoring to streamline their distribution process. Does your brand have the resources available to open its own factories in locations near its warehouses?   
  4. The Consumer - Ultra fast fashion brands understand the human psychology behind the consumer and condition their audiences to expect new, weekly, affordable fashion in their business model. Would adding a cheap mass production line into your brand draw more customers to want your high-end catalogs? Or would the benefit to that primary line be negligible, or worse, compromised? 
  5. Competition – Positions of brand authority in ultra fast fashion have already been staked out, with many other major established brands in this niche. With an oversaturated market of affordable clothing, how will your brand stand out from and ahead of the pack while implementing its core tactics?  

Carefully consider these factors as you decide whether ultra fast fashion is something you want to factor into your brand’s operations. Will this strategy give you a competitive edge? Or put your brand at risk of exchanging quality for quantity without a solid return on investment?

cloth-and-fashion-business-three-people-works-in-2021-09-21-06-10-09-utc

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