Is full price fashion over?
It is well documented that fast fashion brands have had a negative impact on consumer shopping habits. Many customers are no longer willing to pay full price for clothing, with discounting, off-price retail and affordable fast fashion changing the global retail landscape.
But never before has high-end fashion had it so tough. Today I visited several luxury fashion websites in different markets to see first hand that the SS18 sales are well underway. From Brownsfashion.com in London, Boutique 1 in the UAE, de Bijenkorf in The Netherlands and Bergdorf Goodman in the USA, on all these sites I saw contemporary fashion and luxury brands - including Vetements, Calvin Klein 205W39NYC, Adidas Originals, Raf Simons to name but a few - on sale, with an average discount of 30 to 40 percent.
When did the summer sales start in May?
I cannot remember a time when the SS18 collections were on full sale by mid May. Gone are the days when you could walk into a boutique in the middle of summer and purchase a pair of shorts at full price, a time when you actually needed them. Now the summer collections are discounted before the summer has even started.
The retail shelves are making way for pre-fall, followed by winter collections which should be in stores from July. But something is not quite right. The summer collections have only been available from January, with barely a few months to perform at full price.
Whilst there is no doubt retailers are having a tough time selling full price fashion, high-end brands are having an even tougher time. Retailers demand high sell-thru figures, despite not providing enough time for brands to achieve these. Furthermore, with the advent of fast fashion, consumers are willing to pay on average only 76 percent of full price. This figure comes from a three year study conducted by Fung Global Retail & Technology and First Insight.
Clothing costs less, spending is down
With findings published last year in Quartz, the joint study looked at more than 57,000 women’s apparel and accessories items in 11 countries, including China, France, Germany, UK, US, Mexico, and Poland. It found that clothing prices for many categories were decreasing, but so too were the dollar amounts shoppers were willing to spend.
“This overall trend aligns with the increasingly promotional nature of retail, the impact of multi-channel selling, and off-price retail and fast-fashion retail,” stated the study.
According to Bloomberg, the fashion industry is in crisis. In the US, where unemployment is low, the economy is growing and consumers have purchasing power, Americans are spending less and less on clothing. “Apparel has simply lost its appeal, and as a result more and more companies from big-name department stores to trendy online startups, are folding.” Why spend your dollars on an expensive dress when you could travel somewhere special instead?
In fashion, what is the new normal?
We are used to seeing 5 pound t-shirts at Primark. But similarly the 700 pound t-shirts at Gucci are seen as ‘normal.’ This pricing disparity seems to highlight how much garments are supposed to reasonably and responsibly cost, notes The Fashion Law.
We all know the pitfalls of fast fashion: when brands move their production to low-cost and low-wage manufacturing countries, they can offer rock-bottom prices. Similarly, high-end fashion brands often take a 500 percent margin in order to make their designs more exclusive in the eye of the consumer.
Cheap garments do not provide the same aura of exclusivity as luxury fashion, and the psychology of price is such that the higher cost of a garment the higher the value we attribute to the product and ultimately to the brand.
Neither low nor high-end is sustainable
But it appears neither low-end or high-end fashion is proving sustainable. Companies like H&M have seen their lowest growth in years, with many industry insiders saying the conglomerate is in dire need of ‘fixing’ itself. And at the high-end, consumers are no longer willing to spend on big ticket clothing items the way they once did. Hence the sales are starting earlier and earlier.
The only good news is, shoppers waiting for their wishlist items to go on sale, no longer have to wait.