Profit
Profit has significant importance within the fashion industry due to it’s dynamic and ever-changing ecosystem that intersects between culture and commerce. It plays a pivotal role in the global economy due to it’s large influence on consumer behaviour and global reach.
The fashion industry encompasses a wide range of products including clothing and accessories to beauty and cosmetics. Data suggests that the global fashion market was estimated to be worth roughly 2.5 trillion dollars in 2020 (McKinsey & Company, 2021). And with millions of people employed globally due to it’s substantial revenue generated, this astonishing number demonstrates the industry’s enormous contribution to the global economy.
The fashion industry is comprised of various segments including fast fashion, sustainable fashion and luxury fashion. The performance of each segment is driven by consumer behaviour and market trends. In recent years, there has been a increase in the awareness of the sustainability issue and businesses that uphold and align with these values are likely to have experienced considerable development. In contrast, fast fashion brands are being monitored due to their environmental and ethical concerns and a study on fast fashion consumers found that H&M consumers do also seek to minimise the environmental effects caused by the fashion industry (Shen, 2014).
It is difficult to remain competitive within the fashion industry especially during uncertain economic times. Therefore, it is crucial that brands focus on innovation and adopting an effective supply chain so that they can be responsive to the continuous shift in consumer behaviour (Distanont et al., 2018). Furthermore, taking sustainable initiatives or adopting an e-commerce strategy may provide brands with a competitive advantage due to the increased awareness in sustainability and popularity in online shopping.
McKinsey & Company. (2021). The State of Fashion 2021: In search of promise in perilous times. McKinsey & Company. https://www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion-2021-in-search-of-promise-in-perilous-times
Shen, B. (2014). Sustainable fashion supply chain: Lessons from H&M. Sustainability, 6(9), 6236-6249.
Distanont, A., & Khongmalai, O. (2018). The role of innovation in creating a competitive advantage. Kasetsart Journal of Social Sciences, 41(1), 15–21. Retrieved from https://so04.tci-thaijo.org/index.php/kjss/article/view/234863