Boohoo allegations taint fast fashion reputation

Just style By GlobalData Retail | 30 October 2020

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Reports surfaced in July that one of Boohoo's Leicester-based supplier factories was paying staff just GBP3.50 (US$4.38)

an hour to work in unsafe conditions and in breach of UK coronavirus lockdowns

Recent allegations against the Boohoo Group's unethical working practices in its Leicester factories have damaged the retailer's reputation, with 66.4% of UK clothing and footwear shoppers stating they now feel discouraged from purchasing fashion from any of its brands in the future. This malpractice has also had a huge negative impact on the image of the fast fashion industry as a whole.

In September 2020, 61.2% of shoppers cited that they have been deterred from purchasing from retailers like Primark and Missguided as a result of the allegations against Boohoo, so it is vital for fast fashion companies to focus more greatly on transparency, as well as highlighting their ethical initiatives via social media and in-store signage to regain shoppers' trust.

Source: Data is derived from GlobalData's monthly survey of 2,000 respondents conducted in early September 2020. Consumers were asked whether the allegations against the Boohoo Group would discourage them from purchasing clothing and/or footwear from other fast fashion brands (e.g. Missguided, Primark) in the future? All figures are in percentages.

Older shoppers stated they would be the most discouraged from using fast fashion retailers as a result of the Boohoo Group's controversy. However they already have a low tendency to shop via these retailers, as they prefer comfortable and classic clothing over the latest trends.

16-24s expect the least impact to their future purchases, as they are most accustomed to frequently buying low-cost trend pieces. Still, over half said they will reconsider their usage of fast fashion players following the allegations, as these young shoppers are the most passionate about ethical issues, with 65.3%* rating this factor as being of high importance to them when purchasing clothing. Therefore, it is vital for fast fashion retailers to clearly communicate their stance on the recent issues to ensure ongoing appeal among these consumers.

Of course, what shoppers say they will do, and what they actually do can differ.

Despite consumers reacting negatively to the Boohoo Group's actions, there has not yet been a notable impact on its sales, having reported strong revenue growth of 44.5% for H1 FY2020/21. This shows that the retailer's core customers are resistant to altering their shopping habits, with its value proposition and superior online capabilities remaining highly desirable during Covid-19 due to economic uncertainty and ongoing concerns about visiting physical retail locations.

Furthermore, many of its shoppers are also extremely loyal to the brand due to its fashion-forward products, high-profile celebrity campaigns and strong social media engagement, so will not be easily deterred by any negative press that the Boohoo Group receives.

Other fast fashion retailers, however, may lack some of the redeeming qualities of the Boohoo Group's proposition, and may struggle to maintain shopper appeal as easily amidst the controversy. Therefore, they must act fast in becoming more transparent with consumers in order to rebuild their trust, as they will feel more comfortable purchasing items if they know where and how they were produced.

While some retailers like H&M and Asos have already made considerable advancements in this area, others such New Look and Topshop have a lot more progress to make before consumers gain confidence in their working practices. Providing in-depth details of their suppliers and manufacturers on each product page on their websites will make this information easier for shoppers to find online, while highlighting new initiatives for improving ethical standards via social media will enable retailers to make their actions visible to a wider audience.

Fast fashion players must also communicate measures via email marketing or in-store signage, as this will help to drive greater awareness among older shoppers too.

* Data is derived from GlobalData's How Britain Shops survey of 10,000 respondents conducted in April 2020.

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