PROFIT

This weeks pillar is profit, profit is important in the fashion industry as it allows for growth and development in a brand and freedom of creative outlet for designers without limitation, with any creative vision being able to bring to life to therefore generate further profit. The fashion industry is a massive economic sector that encompasses everything from clothing, accessories to footwear. “The revenue of the global apparel market was estimated to amount to 1.53 trillion U.S. dollars in 2022, with revenue forecast to increase in 2023, to more than 1.7 trillion dollars ” (Smith, 2023). With an industry so big brands are continuously striving for success. “collections must generate revenue, which is a point of success measurement when ceos and shareholders look at annual reports” (Mitterfellner, 2023). There are limitations to this, creativity sometimes must be subsided for marketability. In order to bridge the gap between art and commerce creative directors look for innovation in all aspects of the brands identity in order to excite consumers. For example, Karl Lagerfeld transformed runways into immersive experiences “he recreated supermarkets, an airport in the middle of Paris’s Grand Palais, had a giant rocket in the room”(Mitterfellner, 2023) Karls shows always captivated audiences and left a lasting impression. 

“The COVID-19 crisis has a great impact on the economy, including the luxury fashion industry, where sales have declined. The pandemic has interrupted supply and demand.”(Xie & Youn, 2020) Whilst some companies were able to change and survive many went into decline. For example, ,many non- luxury brands such as Debenhams and Topshop when bankrupt compared to luxury brands like Patrick Mcdowell who ran with the restrictions and turned out in success. AI is forthcoming in the industry, we have seen designers such as Patrick Mcdowell taking part in the first digital fashion week during the pandemic. This included designed garments being made into digital fashion rather than physical. “digital fashion gives the sense of inclusivity and accessibility that comes with it, because everyone with Wifi can experience it. This collection was open to everyone; everyone had a front row seat”(Murray-Nag, 2021)In order to stay relevant brand must look to gain traction from the new generation and look to the future. “AI applications reveals remarkable use cases, including predictive analytics for efficient production, personalisation to enhance product longevity, and virtual fitting rooms to limit wastage.”(Rathore, 2019) The use of AI not only appeals to the younger generations as exiting and innovative,  but it also has positive environmental impacts which have become more and more important to young people. 

Reference list 

Mitterfellner, O. (2023). Luxury Fashion Brand Management and Sustainability. Mastering Fashion Management.

Murray-Nag, B. (2021, February 3). Patrick McDowell: How I created my first fully digital fashion collection – eco-age. Eco. https://eco-age.com/resources/patrick-mcdowell-digital-fashion-collection/

Rathore, B. (2019). From trendy to green: Exploring AI’s role in Sustainable Fashion Marketing. International Journal of New Media Studies, 06(02), 12–22. https://doi.org/10.58972/eiprmj.v6i2y19.120 

Smith, P. (2023, August 31). Topic: Apparel market worldwide. Statista. https://www.statista.com/topics/5091/apparel-market-worldwide/#:~:text=The%20revenue%20of%20the%20global,more%20than%201.7%20trillion%20dollars.

Statista. (August 24, 2023). Revenue of the apparel market worldwide from 2014 to 2027 (in trillion U.S. dollars) [Graph]. In Statista. Retrieved October 22, 2023, from https://www.statista.com/forecasts/821415/value-of-the-global-apparel-market

 Xie, J., & Youn, C. (2020). How the luxury fashion brands adjust to deal with the COVID-19. International Journal of Costume and Fashion, 20(2), 50–60. https://doi.org/10.7233/ijcf.2020.20.2.050 

The profit pillar is defined by the economic face of the fashion industry. In this pillar success is defined as mass production and rising profits.

The fashion industry is currently valued at $1.7 trillion globally and 430 million workers (Ariella, S 2023). “Fashion is believed to be one of the world’s most important industry, and if it were ranked alongside individual countries GDP, the industry would represent the seventh-largest economy in the world,”(McKinsey, 2017). Like every industry, the fashion world were negatively affected by the Covid-19 pandemic, where the market dropped almost 40% between the start of January and March, 2020 (McKinsey 2023).According to the Euromonitor apparel and footwear shrunk by -18.1%  in 2020, however the market also grew 18.1% post-pandemic due to ‘revenge shopping’. (McKinsey 2023).

The effects of the pandemic and inflation on the fashion industry are impactful, with the footwear and apparel market forecasting to lose many consumers. Despite the public tightening their purse strings against the rising energy prices hasn’t stopped the growth of the luxury market. It’s sales are projected to grow 5 percent to 10 percent in 2023 (McKinsey 2023). This can be explained by the wealthy people who are the target demographic for luxury brands, and are also the least affected by inflation, therefore will continue to purchase goods (Kim 2023). On the other hand, non-luxury fashion sales are forecasted to grow between negative 4 percent and positive 1 percent (McKinsey 2023), explained by inflation, energy prices from the Ukraine crisis and a post-pandemic environment.

For brands to remain competitive and raise profits, they use trend forecasting. However, in uncertain economic times trend forecasting can be difficult, and therefore companies may not be able to keep up. One way for companies to survive challenging times is to create partnerships amongst each other and share their consumer data, increasing the accuracy of forecasts made by designers (A, Berg 2023). In 2023 demand patterns aren’t as stable as they used to be, so brands need to learn how to be more flexible and adapt. Until the nineteenth century, fashion wasn’t considered art and any fashion illustrations were for costumes or logical use (Goethe-Jones, S 2019). In 2023, clothing is viewed drastically different, with museums and galleries exhibiting garments, and events such as Paris Fashion Week and the Met Gala showcasing designer’s creations. Fashion brands hire creative directors to bridge the gap between the designer’s artistic view. A creative director takes the brands creative vision and translates this into a visual language that resonates with consumers (YellowBrick 2023). They turn art into commerce and build the brands profits, upholding one of the pillars of fashion.  

References

Ariella, S. 2023.

28 Dazzling Fashion Industry Statistics [2023]: How Much Is The Fashion Industry Worth – Zippia

Berg, A. June 2022. How current global trends are disrupting the fashion industry.

Fashion industry challenges and global disruptions | McKinsey

Goethe-Jones, S. March 2019. Fashion illustration from the 16^th century to now.

Fashion Illustration from the 16th Century to Now – Illustration History

Kim, W. May 2023. The surprising reason luxury goods are booming.

Dior, Tiffany, Le Creuset: Why we’re buying luxury goods like crazy – Vox

McKinsey. 2017. The State of Fashion Report

The-state-of-fashion-2017-McK-BoF-report.pdf (mckinsey.com)

McKinsey. November 2023. The state of fashion 2023 holding onto growth as global clouds gather.

State of Fashion | McKinsey

Yellowbrick. March 2023. Unleashing creativity what does a creative director do.

Unleashing Creativity: What Does a Creative Director Do? (yellowbrick.co)

Introduction

The fashion industry is a fast-paced, ever-evolving sector that plays a crucial role in today’s global economy. It encompasses a wide range of activities, from design and manufacturing to marketing and retail, making it a multifaceted industry with significant economic implications. In this blog, we will explore the dynamic performance of the fashion industry and its impact on the economy.

1. A Growing Industry

The fashion industry has experienced remarkable growth over the years. According to a report by McKinsey & Company, the global fashion industry was valued at $2.5 trillion in 2020, contributing 2% of the world’s Gross Domestic Product (GDP) and employing over 75 million people. This growth is driven by factors such as increasing consumer demand, globalization, and digitalization.

2. Digital Transformation

Digitalization has revolutionized the fashion industry. E-commerce has become a driving force, with online sales accounting for a substantial portion of fashion retail. The COVID-19 pandemic accelerated this shift as more consumers turned to online shopping. Luxury brands like Gucci and Louis Vuitton have embraced e-commerce, making their products accessible to a global audience.

3. Sustainability and Ethical Concerns

Sustainability and ethical concerns have gained prominence in the fashion industry. Consumers are increasingly seeking eco-friendly and ethically produced products. Sustainable fashion practices, such as upcycling and recycling, have become mainstream. Brands like Patagonia and H&M have taken steps to reduce their environmental impact, reflecting the changing consumer values.

4. Supply Chain Disruptions

The COVID-19 pandemic exposed vulnerabilities in the fashion industry’s global supply chains. Lockdowns and factory closures led to production delays and shortages, impacting the industry’s performance. To mitigate such disruptions, companies are now diversifying their supply chains, focusing on local sourcing, and investing in digital solutions.

5. Fashion Tech and Artificial Intelligence

Fashion tech and artificial intelligence (AI) have transformed the industry. AI is used for trend forecasting, personalizing shopping experiences, and optimizing supply chain logistics. It has improved efficiency and helped brands better understand consumer preferences.

6. Economic Impact

The fashion industry’s economic impact extends beyond the products themselves. It creates jobs throughout the supply chain, from designers and manufacturers to retailers and marketers. The industry also stimulates ancillary sectors like advertising, media, and tourism. Fashion weeks, such as those in New York, Milan, and Paris, draw international attention and boost local economies.

Conclusion

The fashion industry is an ever-evolving sector with significant economic implications. Its dynamic performance is influenced by digital transformation, sustainability initiatives, supply chain disruptions, and technology integration. As the industry continues to adapt to the changing landscape, its role in the global economy remains prominent. Understanding these dynamics is essential for businesses, policymakers, and consumers alike.

References:

1. “The State of Fashion 2021,” McKinsey & Company, https://www.mckinsey.com/industries/retail/our-insights/the-state-of-fashion-2021
2. “How COVID-19 Will Change the Fashion Industry,” Harvard Business Review, https://hbr.org/2020/03/how-coronavirus-could-change-the-fashion-industry
3. “Sustainable Fashion: What It Means and Why It Matters,” World Wildlife Fund, https://www.worldwildlife.org/stories/sustainable-fashion-what-it-means-and-why-it-matters
4. “The Future of Fashion: From Design to Merchandising, How Tech Is Reshaping the Industry,” Forbes, https://www.forbes.com/sites/forbestechcouncil/2020/09/16/the-future-of-fashion-from-design-to-merchandising-how-tech-is-reshaping-the-industry/
5. “The Economic Impact of the Fashion Industry,” Fashion United, https://fashionunited.com/education/fashion/the-economic-impact-of-the-fashion-industry/2021011332319

Capital is at the core of the fashion industry, it allows brands to sustain their operations and enables growth. With a labour force of 3,384.1 million, the industry generates an equivalent $3 trillion USD, and roughly one in eight workers is involved in the fashion and textile industry (Fashion United, 2022; Faces and Figures: Who Makes Our Clothes?, n.d.).

Though the rate of financial growth is heavily dependent on various socio-political factors. For example, disposable income reduced during the Covid pandemic due to redundancies and sick leave, between ‘January-March 2020 and April-June 2020, employment levels fell by 424,000’, this severely halted demand for fashion goods thus caused further redundancies within the manufacturing and production process (Powell et al., 2022). As the connect between worker and brand has become more complex and clouded, there is little accountability or legal obligation for decent worker wellbeing, ‘with exploitatively low salaries, garment workers in the Global South have for years struggled to survive. Saving for emergencies was near impossible, meaning they had nothing to fall back on when the COVID-19 pandemic hit’ (Hoskins, 2021).

In addition to this, the Cost of Living Crisis has meant that shoppers have become more stringent with their spending, McKinsey found that ‘81% of Brits have changed their shopping habits in some way as a result of cost-of-living pressures’ (Caris, 2023).

In response to this, brands have had to adapt or face going obsolete. Techniques have been used aid customers in spending, like the ‘buy now pay later’ method. Klarna is a company that provides post-purchase payments, it is featured in many clothing websites, including H&M, Michael Kors and River Island  (Klarna Shops, n.d.). Another technique is boosting advertising, ‘four in ten UK firms expect to…increase their marketing spend in 2023/24, with just 15.3% expecting cuts’, this is so that companies can influence consumers into switching to competitors (Carroll, 2023).

Creative directors not only ensure brand aestheticism but also must evaluate whether it will generate capital, in fact they play a key role in bridging these two elements. Fashion business lecturer and writer Olga Mitterfellner states ‘collections must generate revenue, which is often a point of success measurement when CEOs and shareholders look at annual reports. If the figures don’t impress, the designer can and will be exchanged for another one.’ The brand must be modernised and reinvented with every collection, whilst holding true to the brands ‘visual DNA’ to please customers and board members (Mitterfellner, 2023). This task is made more difficult as the creative director must also oversee a large team, their expertise in this field, however, often lacks as brands bring in impressive designers and fail to consider their ability at staff management (Mitterfellner, 2023).

References:

Caris. (2023, January 31). Consumer behaviour in a cost of living crisis. Curated. https://curated-digital.com/blog/consumer-behaviour-in-a-cost-of-living-crisis/

Carroll, N. (2023, January 19). Marketing budgets cling to growth despite recession fears. Marketing Week. https://www.marketingweek.com/marketing-budgets-grow-despite-recession/

Faces and Figures: Who Makes Our Clothes? (n.d.). Common Objective. https://www.commonobjective.co/article/faces-and-figures-who-makes-our-clothes#:~:text=The%20global%20workforce%20is%20estimated

Fashion United. (2022). Global Fashion Industry Statistics. Fashion United. https://fashionunited.com/global-fashion-industry-statistics

Hoskins, T. (2021, January 18). “They left us starving”: How the fashion industry abandoned its workers. OpenDemocracy. https://www.opendemocracy.net/en/oureconomy/they-left-us-starving-how-fashion-industry-abandoned-its-workers/

Klarna shops. (n.d.). Klarna UK. https://www.klarna.com/uk/klarna-shops/

Powell, A., Francis-Devine, B., & Clark, H. (2022, August 9). Coronavirus: Impact on the Labour Market. Parliament.uk. https://researchbriefings.files.parliament.uk/documents/CBP-8898/CBP-8898.pdf

‌Mitterfellner, O. (2023). Luxury Fashion Brand Management: Unifying Fashion with Sustainability (1st ed.). Routledge. https://doi.org/10.4324/9781003124184

In this part, I will introduce the pillar of “profit”. We all associate the fashion industry with creatives, even geniuses but it is an interesting point to consider if it’s a rightful place for designers to put themselves on the same level as people in other creative fields. Is fashion as an art form worth pursuing when from a marketing perspective the idea of owning a brand is creating a business and generating profit?

We know that the fashion industry is a huge, really competitive, and fast-moving sector. (Gazzola, 2020) According to the author of “Psychology of Fashion” the global value of the fashion industry is about 3 trillion dollars and it employs 57.8 million people overall (Mair, 2018).

Looking at the story and success of Alexander McQueen’s brand, especially its beginning we could consider the artistic approach as beneficial for emerging brands. In his performance art movie “The Bridegroom Stripped Bare” (2002) McQueen places himself in the role of an artist and essentially ventures into performance art rather than fashion, which was not uncommon for this designer when he “blurred the boundary between a runway show and a new kind of installation art” (Knox, 2010). In a symbolic way, he breaks the stereotype of a faceless entity behind the project and rather a person who actively partakes in the creative process- an artist, (C. Stevenson, personal communication, October 16, 2023), which might be seen as a unique approach from the perspective of fast fashion era when the artistry of making clothes is under the cover and disregarded, because of the rate of global consumption.

As much as the beginning of McQueen’s history does present a quite avant-garde image, the brand is now still recognizable and after the founder’s death continued to operate. Therefore we might argue that the cause of a brand’s success is the persona and “spirit” of the designer that is immortalized through the archive of their work, building a foundation for the reception of the brand (Mora & Berry, 2022). Looking at McQueen or brands like Channel and its time under Karl Lagerfeld’s direction we might draw the conclusion that it’s the individuality that keeps a brand going. Therefore the role of a creative director and the persona they build is crucial.

One of the other important factors is the role of technology in fashion; “To be dynamic is becoming strategic to survive in the long-term and this implies the need for companies to update technologies and to interpret the new trends and to identify how these challenges can be translated into marketing opportunities”(Gazzola & colleagues, 2020) as well as the importance of sustainability, which has recently been described as “ an important new driver in consumers’ purchasing decisions” (Gazzola & colleagues, 2020). With the heightened awareness of global issues presented by the Gen Z customers, the market shows a need to adjust in these areas.

Resources:

Mair, C. (2018). The psychology of fashion. Routledge.

Gazzola, P., Pavione, E., Pezzetti, R. R., & Grechi, D. (2020). Trends in the fashion industry. The Perception of Sustainability and Circular Economy: A Gender/Generation Quantitative Approach. Sustainability, 12(7), 2809. https://doi.org/10.3390/su12072809

McQueen, A.M. (Director). (2002). “The Bridegroom Stripped Bare” [Film].

Knox, K. (2010). Alexander McQueen: Genius of a Generation. http://ci.nii.ac.jp/ncid/BB03561173

Juliana Luna Mora & Jess Berry (2022) Creative Direction Succession in Luxury Fashion: The Illusion of Immortality at Chanel and Alexander McQueen, Luxury, 9:2-3, 117-140, DOI: 10.1080/20511817.2022.2194039

The profit pillar focuses on the economic side of the fashion industry, specifically on achieving economic growth responsibly. (Coolset, 2023). It looks at how we can increase our economy in way which is sustainability to not only other industries but the smaller sectors of the fashion industry. 

The fashion industry, specifically, the apparel and textile industry are the 4th biggest industry globally. It’s estimated that around 3,000 billion textile and garment companies are entering the market daily, a large degree of these are unknown to the majority of consumers but still thrive in their own circles and communities. (Vilaça, J. 2022). These companies continue to grow and contribute to the economy. 

When considering the performance of the individual sectors in the fashion industry, the luxury fashion sector is likely to excel and certainly outperform the rest of the sectors, due to having wealthier shoppers, who are expected to continue to travel and spend, as their desired market. Therefore, the luxury fashion sector ‘[will] remain more insulated from the effects of hyperinflation.’ However, the fashion market excluding the luxury sector is expected to struggle to grow significantly throughout the duration of 2023. (Mckinsey and co, 2022)

Brands are being encouraged to employ different tactics in order to remain competitive in uncertain economic times. For example, utilising the power of social media, specifically vlogging/blogging. According to Mitterfellner (2019) Blogging follows the two-step process, the two-step flow of communication, created by Lazarsfeld in 1944. It suggests that it is possible to achieve a certain reaction of a large group of people by first influencing the opinion leader and pre-calculating how they will re-distribute the information. This can be applied to blogging in which the opinion leader is the blogger, and the large group of people are the people that follow that specific blogger. This tactic is likely to help brands stay competitive in an unpredictable and uncertain economic market. 

Brands should also consider how they’re bridging the gap between creativity and commerce. This includes considering the consumer and their desires as well as still designing creative and new items of clothing that clearly display and accentuate fashion as an art form and stick to the brands ideals about the apparel they produce. Therefore brands need to think about the marketing they’re producing and making sure it fits their desired market including the pricing they are setting their items at. 

References

Vilaça, J. (February 18^th 2022) Fashion industry statistics:The 4^th biggest sector is way more than just about clothing.Fashinnovation. https://fashinnovation.nyc/fashion-industry-statistics/ Retrieved 22^nd October 2023. 

Mckinsey and Co (November 29^th 2022) The state of fashion 2023: Holding onto growth as global clouds gather. https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion . Retrieved 22nd October 2023.

Mitterfellner, O (2019) Fashion marketing and communication: Theory and practice across the fashion industry. Chapter 5: Social media, blogs and opinion-leaders. Taylor & Francis Group, Milton. https://ebookcentral.proquest.com/lib/ual/detail.action?docID=5981798.

Coolset (August 7^th 2023) The three pillars of sustainability: people, planet and profit. https://www.coolset.com/academy/three-pillars-of-sustainability Retrieved 22nd October 2023

The Profit Pillar in the world of fashion represents the critical junction where financial strategies and ethical responsibilities intertwine. It’s a delicate balancing act that addresses the multifaceted demands of modern consumers, including sustainability, affordability, and style. This pillar is the response to the fashion industry’s growing emphasis on sustainability and ethical values, where achieving profitability coexists with the responsible sourcing of materials and ethical management of supply chains (Londrigan et al., 2018).

Whilst the fashion industry is colossus, forecasted to reach $1.7 trillion in retail sales by the end of 2023 (Smith, 2023), various sectors of the industry are performing uniquely concerning the profit pillar.  Luxury fashion, known for its prestige and exclusivity, historically maintained robust profit margins. However, it’s adapting to meet evolving consumer expectations for ethical practices (Mitterfellner, 2023). On the other hand, fast fashion, celebrated for its affordability and convenience, faces increasing scrutiny due to its environmental and ethical practices. Brands like Shein have continued to thrive, dominating the market with a 40% market share (Beyrouthy, 2023), despite these challenges. In contrast, sustainable fashion, committed to eco-friendly materials and ethical production, may commence with lower profit margins but is steadily gaining traction as consumers increasingly prioritise ethically responsible choices.

Navigating the ever-evolving economic landscape, fashion brands must adopt strategic measures in alignment with the Profit Pillar. This includes streamlining operations, diversifying into new markets, and thoughtfully balancing pricing strategies to cover production costs while ensuring affordability for consumers. Digital dominance is essential in the era of online shopping, where e-commerce and a strong online presence can make or break a brand. Sustainability, a central strategy, aligns not only with ethical values but also yields long-term financial savings. Remaining customer-centric, fostering innovation, and relying on data-driven decision-making are essential elements in this intricate balancing act.

Creative directors play a pivotal role in bridging the gap between creativity and commerce within the Profit Pillar. They analyse consumer trends and market dynamics, ensuring creative ideas translate into profitable, marketable products that align with ethical values. Crafters of brand identities and narratives, infuse sustainability and ethical practices into a brand’s story, catering to the conscientious consumer. Collaborations and influencer partnerships amplify brand reach and profitability, while sustainable design practices and innovation keep brands at the forefront. Data-driven decision-making guides their strategies, fine-tuning product offerings, marketing efforts, and pricing decisions with profitability and ethical responsibility in mind. The Profit Pillar, in essence, represents a transformation in the fashion industry, where financial sustainability and ethical responsibility are no longer adversaries but partners, coexisting to create an industry where innovative design and sustainable practices go hand in hand, aligning with the expectations of today’s conscious consumers.

Bibliography:

Beyrouthy, L. (2023, March 28). U.S. Fast Fashion Market Share 2022. Statista. https://www.statista.com/statistics/1341506/fast-fashion-market-share-us/

Mitterfellner, O. (2023). Luxury fashion brand management: unifying fashion with sustainability. In Library Catalog (Koha). Routledge. https://libsearch.arts.ac.uk/cgi-bin/koha/opac-detail.pl?biblionumber=1546849&query_desc=kw%2Cwrdl%3A%20Mitterfellner

Londrigan, M. P., Jenkins, J. M., & Bloomsbury (Firm). (2018). Fashion supply chain management. In Library Catalog (Koha). Fairchild Books, An imprint of Bloomsbury Publishing Inc. https://libsearch.arts.ac.uk/cgi-bin/koha/opac-detail.pl?biblionumber=1449128&query_desc=

Smith, P. (2023, August 31). Global apparel market – statistics & facts. Statista. https://www.statista.com/topics/5091/apparel-market-worldwide/#topicOverview

The Profit Pillar examines the difference in price between the cost of production and how much the product is sold for, a business requires profits in order to be financially stable in the industry.

The scale and expense of the fashion industry is immense, due to multiple components and processes involved. The fashion industry had an annual income of between $1.7 and $2.5 trillion globally according to Euromonitor and McKinsey before Covid-19. (Ogbiti, 2023)

McKinsey in its State of Fashion 2017 report said, ‘if it were ranked alongside individual countries’ GDP, the global fashion industry would represent the seventh-largest economy in the world’. (Karl, 2017)

The State of Fashions 2022 report predicts that the luxury sector will outperform other sectors in the industry, as wealthy consumers can afford to travel and shop luxury brands despite hyperinflation.  The report says according to McKinsey ‘the luxury sector is expected to grow between 5 and 10 percent in 2023’. In comparison to ‘a relatively slow sales growth of between -2 and +3 percent’ in 2023 for non-luxury products. (Amed, 2022)

To remain competitive, businesses must adapt their operation techniques, becoming more digital, enabling global and local advertising for the brand. Reducing overproduction and taking into account what is in demand will help keep the profits stable. (Amed, 2022)

Modernised operational techniques and AI will benefit the business by introducing new and exciting ideas. The efficiency and reliability of these digital designs will save time for the creatives and attract consumers. Virtual designs will reduce the environmental damages and reduce production pricing, resulting in preferable pricing for the creatives and consumers. (Langer, 2020)

In order to be successful, brands have to be unique.To be unique FIAT eliminated ‘grey’ toned cars. Instead, promoting bright colours that fused ‘emotion’ and ‘life’, with the intention of boosting sales. (Fiat, 2023)

A London College of Fashion report explains that ‘Creatives’ and ‘Consumers’ should communicate, and consider how much consumers would pay for a product. Understanding the products true value and seeing how comparable it is to its selling value. Other brands can replicate designs, so making sure you don’t deceive the buyer is crucial to ensure customer loyalty. (De Souza Crook, 2017)

‘Dual leadership’ is becoming more common within the fashion industry, the designer collectively works with their business partner or other creative leaders, emerging creativity and artistic views with commerce which leads to economic success. (Overdiek, 2016)

Mitterfellner, O. (2023). Luxury fashion brand management [image]

Consumer behaviours are changing, favouring sustainability and second-hand purchases as well as the potential thrill of making a profit upon resale, on platforms such as Depop and Vinted. Meaning for consumers to connect with a brand, shopping ‘experiences’ need to be modified to keep shoppers on their toes and attract them to buy the original sustainable products. (Hu, 2023). 

References

Amed, I, et al. (2022). The State of Fashion 2023: Holding onto growth as global clouds gather. McKinsey&Company. 

https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion

De Souza Crook, J. (2017). Compelling Fashion Business: Bridging The Divide Between Creative Vision And Commercial Reality. London College of Fashion.

https://www.arts.ac.uk/colleges/london-college-of-fashion/stories/compelling-fashion-business-bridging-the-divide-between-creative-vision-and-commercial-reality

Fiat, 26 June 2023, No More Grey,[Video] (Youtube) https://www.youtube.com/watch?v=uWLX94pzYVk.

Hu, Z. (2023). What’s driving the rise of pre-loved fashion?Drapers. https://www.draperonline.com/insight/analysis/whats-driving-the-rise-in-pre-loved-fashion

Karl, C. (2017). The State of Fashion 2017. McKinsey Global Institute.https://www.mckinsey.com/~/media/McKinsey/Industries/Retail/Our%20Insights/The%20state%20of%20fashion/The-state-of-fashion-2017-McK-BoF-report.pdf

Langer, D. (2020). Brand Strategy: Rules for Uncertain Times, FIBRE2FASHION.

https://www.fibre2fashion.com/industry-article/8630/brand-strategy-rules-for-uncertain-times

Mitterfellner, O. (2023). Luxury fashion brand management: Unifying fashion with sustainability. Taylor & Francis Group.[image]

https://ebookcentral.proquest.com/lib/ual/detail.action?docID=7260416#

Ogbiti, J., & Uddin, O. (2023). Development of a Computerized System for Fashion Business. International Journal of Science for Global Sustainability, 9(1), 10-10.

https://www.fugus-ijsgs.com.ng/index.php/ijsgs/article/view/399

Overdiek, Anja. (2016) Fashion designers and their business partnershttps://www.ingentaconnect.com/contentone/intellect/infs/2016/00000003/00000001/art00003?crawler=true&mimetype=application/pdf&casa_token=bWKqzrApMCcAAAAA:ITOt9LYqzXtqUoEXA_3TdF4bKb18zz-1R5IWz1-gEdsf8nNaL51PnOBmTAFhc1NJLE6WsQ84fPSqH-4LOw

Without profit, it can be argued that the fashion industry would not dominate the globe as it currently does, as it is often said that money makes the world go round.

In terms of profit, the global fashion industry is said to be valued at $1.7 billion dollars as of 2023, and since 2017 has reported a growth of 5.46%, and was projected a 6.2% by 2020. The global retail sales of apparel and footwear reached a total of $1.9 billion in 2019. Furthermore, the US fashion market is said to grow annually by 1.98% through 2027. (Ariella, 2023)

With these growths, certain sectors of the fashion industry may follow these growth trends, or decrease. The luxury sector is expected to grow between 5 and 10 percent in 2023, with projections of growth in China between 9 and 14%, 5 to 10% in the US and a modest 5 to 8% in Europe. However, McKinsey reports that the fashion industry, excluding the luxury sector will struggle to grow. (McKinsey, 2022a)

Alongside these projections, brands may struggle to remain competitive with the uncertainty of the state of the global economy. Due to consumer shifts, ‘fashion executives should adapt their business models to protect customer loyalty and avoid diluting their brands.’ (McKinsey, 2022b) These adaptions may look like avoiding greenwashing to present valid, meaningful and credible change to a brand’s customers (McKinsey, 2022c) as well as being creative in their marketing, spending their money in a way to craft creative and eye catching digital advertisements to please and attract the customer. (McKinsey, 2022d)

A company’s creativity can create commerce, a brand being creative with their products can be the reason why they generate profit. However, creativity directly endorses the knock off industry, and throwaway culture. No matter how creative a brand will be in their designs, it is almost certain that a ‘dupe’ will end up on SHEIN, or ROMWE with the coming days. ‘Dupes’ diminish creativity for brands, as their designs meant to generate profit for them end up endorsing the fast fashion industry, and these pieces will end up in a landfill, due to throwaway culture. However, the gap between creativity and commerce are reached by grand advertising, and Gen Z’s grasp on social media, with a creative piece becoming a trend overnight with a simple video on TikTok, influences now drive these bridges.

Reference list.

Areilla, S. (2023, June 15). 28 DAZZLING FASHION INDUSTRY STATISTICS [2023]: HOW MUCH IS THE FASHION INDUSTRY WORTH. Zippia. https://www.zippia.com/advice/fashion-industry-statistics/

The state of fashion 2023: Holding onto growth as global clouds gather (2022) McKinsey &
Company.
https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion

Profit may be the most important pillar of the fashion industry- considering that it is one of the biggest industries worldwide at $1.7 trillion in 2021 (McKinsey, 2022). Though the industry saw recent decline during the COVID-19 pandemic, economic recovery is forecast and many sectors of the industry are already seeing recovery. Luxury brands in particular are seeing significant profits, exemplified by Gucci which reported over $10 billion in revenue in 2022. Despite a global recession on the horizon, the luxury sector is projected to grow 5-10% in 2023. In contrast, the rest of the fashion market is projected to grow slowly at between -2% and 3% as they do not have the protection of wealthy shoppers against inflation (Amed et al, 2022). To remain competitive in the current economic climate, brands are forced to find new strategies as highlighted by Mitterfellner (2019), who outlined ‘Desire, Digitalisation, Diversity and Design’ as four key aspects in Saint Laurent’s rebranding. Digitalisation is a particularly important aspect for brands to currently consider, as people increasingly shop online. Generation Z, in particular, enjoys online shopping, as found by Choudhury (2014): ‘young people have been the majority shoppers online’. Brands must therefore consider the online purchasing experience they provide as well as their physical stores, as a poorly functional website is likely to create customer dissatisfaction and discourage purchasing decisions. However, this emphasis on function and profit raises concerns about the creativity of brands and their creative directors, as expressed by Alber Elbaz, who felt that he had lost feeling and heart when he became a creative director as opposed to a courtier- describing the role as having ‘to create- but mostly direct’ (Dacre, 2015). Mitterfellner (2023) outlined the roles of a creative director as ‘brand ambassador, manager of teams, brand visionary and lead fashion designer’, clearly showing the diminished role of creative design even in a brand’s creative director. This issue may be difficult to bridge, as a brand cannot remain profitable while only creating fashion to be creative. However, creativity and commerce in fashion are not necessarily at odds. Creative directors may not solely exist to create, but they may hold large power and influence over brands. For example, Burberry’s creative director was recently appointed also to the position of CEO, retaining his position as creative director while explicitly holding power over the brand. In this way, Burberry has stated that creativity is a priority of the brand- effectively bridging the gap between creativity and commerce by bringing the two most important roles together. 

References: 

Choudhury, D., & Dey, A. (2014). Online shopping attitude among the youth: A study on university students. International journal of entrepreneurship and development studies, 2(1), 23-32.

Mitterfellner, O. (2023). Luxury Fashion Brand Management: Unifying Fashion with Sustainability. Taylor & Francis.

McKinsey’s ‘State of Fashion 2023’, Imran Amed https://www.mckinsey.com/~/media/mckinsey/industries/retail/our%20insights/state%20of%20fashion/2023/the-state-of-fashion-2023-holding-onto-growth-as-global-clouds-gathers-vf.pdf

The Lyst Index Q2 2023 https://www.lyst.com/data/the-lyst-index/q223/

Business of Fashion: Floriane de Saint Pierre on Creative Leadership https://www.businessoffashion.com/articles/workplace-talent/floriane-de-saint-pierre-on-creative-leadership-032c/