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| 1. Any research on labour employment participation stats in retail/fashion industry?
| 2. Expand the impact of Government measures/policies on retail/fashion industry

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| 1. Good analysis on retail/fashion price inflation and causes
| 2. Good analysis on IT trends and implications on retail/fashion
| 3. Good analysis on labour employment of retail/fashion impacted by Covid and relevant Government measures to mitigate impact
| 4. Good analysis on overall GDP situation in SG as well as retail/fashion industry

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https://towardsdatascience.com/artificial-intelligence-is-restyling-the-fashion-industry-c2ce29acae0d

Fast Fashion consumer profile in Singapore:
https://janio.asia/articles/singapore-fashion-industry-ecommerce-trends-2021-learnings-2020-consumer-profile/

https://www.prnewswire.com/news-releases/global-fast-fashion-market-report-2021---market-is-expected-to-grow-at-a-cagr-of-5-3-from-2025-and-reach-211-909-7-million-in-2030--301414180.html

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Artificial Intelligence is Restyling the Fashion Industry

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How is AI being used to vamp up one of the biggest and competitive industries in the market?

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Fashion - Singapore | Statista Market Forecast

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Singapore: Revenue in the Fashion segment is projected to reach US$1,904m in 2022. The eCommerce market segment Fashion encompasses the commercial (B2C) sale of apparel (for men, women, and children), footwear (e.g., leather shoes, sneakers, luxury footwear, as well as textile and other footwear), luggage and bags (e.g., suitcases, purses, and briefcases), as well as accessories (e.g., hats and caps, watches and jewelery) via a digital channel.

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MayBank Kim Eng expects that the Jobs Support Scheme (JSS) payout will likely be maintained at 50 per cent for aviation, aerospace and tourism-related sectors, but be cut to about 20 per cent, from 30 per cent, for sectors like food services, retail and marine & offshore. JSS support for other less-affected industries will likely cease, the economists said.

There could be greater focus on the Jobs Growth Initiative (JGI), particularly for older workers, said OCBC's Ms Ling.

JGI supports firms that create new jobs by co-paying a portion of the salaries of new local hires for one year. The subsidy is up to 25 per cent of salaries and is raised to 50 per cent for older workers from age 40, as well as for those with disabilities or ex-offenders.

The labour market cycle has bottomed, but employment prospects are expected to remain soft in the immediate term, said Mr Seah.

There should also be more help for lower-income groups that bore the brunt of the COVID-19 crisis, he said. A DBS report from last August showed that about half of the 320K customers that experienced income decline in May earned less than S$3,000 per month.

"This provides added impetus for more fiscal support to prevent any widening of the income gap," he said, adding that more efforts could be channeled towards helping Singaporeans transit to new industries and picking up new skills.

Ms Ling said that the foreign worker policy is unlikely to be loosened, thus training and upskilling the local workforce would remain the mainstay.

Besides calibrated help for those that need it, the focus for Budget 2021 is likely to be about rebuilding and repositioning for growth in the post-COVID environment, she added.

Minister in the Prime Minister's Office and Second Minister for Finance and National Development Indranee Rajah said at an interview on Feb 6 that Budget 2021 will be about targeted assistance, as well as preparing for the future.

"One of the things about COVID 19 is that it has forced us to rethink how we've been
doing things. It has also provided an opportunity to reshape the future and this Budget will be looking exactly at that. Not just tackling existing problems, (but) how to position for the future and how to grow," she said.

"On the social side, some people don't need as much support as others. The strategy here is to look to see who are the ones who really need help and make sure that the resources that we have are channeled to those in need."

PREPARING FOR A POST-COVID WORLD
For measures targeted at businesses, the focus will shift from mitigating the economic fallout to helping companies take advantage of the opportunities that may arise from the recovery, said Mr Seah.

There will be continued emphasis on capability development, digitalisation, investing into new technologies such as artificial intelligence, helping companies to scale up, and internationalisation.

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Support measures set to taper, but Budget 2021 to remain expansionary: Analysts

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MayBank Kim Eng expects that the Jobs Support Scheme (JSS) payout will likely be maintained at 50 per cent for aviation, aerospace and tourism-related sectors, but be cut to about 20 per cent, from 30 per cent, for sectors like food services, retail and marine & offshore.

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Additional References that support our points: 

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Additional References that support our points: 

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Additional Source to support Point 2:
https://www.forbes.com/sites/pamdanziger/2021/08/05/fashion-retailers-welcome-the-rise-in-clothing-prices-but-the-industrys-recovery-remains-tenuous/?sh=39f781434a91

Additional Source to support 4 - SingStat Singapore Economy Infographics:
https://www.singstat.gov.sg/find-data/search-by-theme/industry/services/visualising-data

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Check price. Elegant fashionable businesswoman shopping on weekend checking the price of dress
getty

Dressing the kids to go back-to-school, not to mention yourself to get back-to-work, will cost more this year.

Overall, the consumer price index for apparel rose 4.9% from June 2020 through June 2021. Children's clothing prices rose even higher, up 5.5% for boys and 5.6% for girls. And new kid's shoes will cost 5.7% more.

While men's apparel prices have risen only 1.5% compared to women's 5.3% increase, prices for the most in-demand fashion items - men's pants, women's dresses and outerwear - have experienced the greatest bump. Men will pay 11.1% more for a new pair of pants and women will see a 15.8% jump in dress prices and 8.4% for a winter coat, according to government data.

The retail intelligence company Edited recently did a deeper dive into the cost for dressing fashionably.

The prices for fashion that fit the casualization and athleisurewear trend have increased the most. That includes men's hoodies, sweaters, sweatshirts, sweatpants and t-shirts and for women, loungewear like cardigans, sweaters and sweatpants cost more. In footwear, both men's and women's boots are also more pricey.

But prices for formal and office attire are going in the opposite direction, reports Edited's market analyst Kayla Marci. She says it "reflects the continued importance of comfort and casualwear post-lockdown. In the U.S., dress trousers and suit jackets are at their lowest average price point in two years."

With consumer demand strong so far - fashion retailer sales rose 7.4% from January through June 2021 compared with 2019 to reach $130.9 billion -and the second half of the year historically strongest for apparel sales, retailers anticipate the good times will keep on rolling.

Esteemed industry insider Terry Lundgren, former executive chairman of Macy's, expressed a widely held view in a recent CNBC interview. Following years of virtually "nonexistent" price increases, he believes the current "modest" rise in prices isn't a worry.

"This is not a big concern for apparel retailers," Lundgren said. "You're talking about a few dollars going up in price. It's not going to change the consumer's mind in terms of purchasing."

But just like fashion brands can't control consumer demand, only encourage it through marketing and promotion, they are not in control of the many factors that are causing their products to cost more.

Supply-side issues

Steve Lamar, president and CEO of the American Apparel and Footwear Association, sees a double-whammy in "the current shipping crisis on top of oppressive tariffs on apparel, footwear and fashion." His association is calling on the Biden administration to remove tariffs and provide more oversight to the maritime industry to "help now and avert the next shipping crisis," which is sure to come.

Besides higher shipping costs, retailers' supply chains have been stressed almost to the breaking point. BDO's retail and consumer products national practice leader, Natalie Kotlyar notes the fashion industry has struggled with supply chain issues for quite a while.

"This isn't a short term problem, but one that is going to be with us for some time," she says, adding that retailers need a reliable and resilient supply chain to ensure they get the right product in the right places to meet demand.

On the demand side, Kotlyar foresees it will remain strong this fall and holiday season. "Remember everyone was at home last year, and no one invested into new clothes," she shares. "So our clothes are theoretically two-years old at this point. The styles have changed and more importantly, sizing for many consumers has changed too."

The employment costs to move products around, get them on the shelves and rung up at the cash register are going up too. Forbes.com contributor Richard Kestenbaum puts it succinctly in his article, " Retail wages are a growing problem that will only get worse."

This year fashion retailers are facing another survival test, after the painful one they endured last year: How much of their rising costs will consumers absorb? How strong and resilient are their supply chains? Have they got the styles that consumers want where they want to buy them?

Consumers will decide

Fashion retailers may end up with the short end of the stick, if consumers decide they will wait to get the items they really want and won't pay up to purchase a second-best substitute. Consumers also are unlikely to get reprieve from higher prices by waiting for sales and promotions

"The original asking price is going to be higher because of the supply chain issues. And then, because of these issues, supply won't be available to meet demand, so there will be fewer markdowns," Kotlyar shares.

Fashion retailers also have to factor in the effect their price increases will have on consumers already facing escalating costs across the board. In the past year, the CPI for all items tracked by the Bureau of Labor Statistics is up 5.4%.

"If the wallet is fixed and other prices are going up, consumers are going to be forced to make big tradeoffs. Food is more important than fashion," Kotlyar says. "And even those able to purchase luxury in the past may have to go for more affordable lines of products in the future."

Luxury brands, in particular, have been quick to adjust coming out of the pandemic. Ralph Lauren and Michael Kos have recently raised prices, while Louis Vuitton and Chanel are pushing prices up for some of their most coveted items.

Edited's data also reveals a reduction in the number of luxury goods products priced in the most affordable $500 and under range with an uptick in those carrying a price tag above $500 from 2019 to 2021.

Discount and fast fashion retailers that start with a lower price-point on which to base an increase should benefit if consumers are forced to tighten up. Secondary fashion retailers selling gently-used goods also stand to benefit, particularly from luxury-leaning consumers who can't absorb the pinch.

But a past favorite destination for bargain-hungry shoppers - off-price retailers, like Marshalls and T.J. Maxx - may feel the supply chain challenges even more forcibly because so much of their stock comes from department store's obsolete inventory which will be in short supply.

Higher prices won't mean higher margins

In a final word, BDO's Kotlyar warns that retailers can't expect the price increases to translate into higher margins as in normal times.

"Typically when you have high demand and low supply you can raise your prices and margins are going to be higher too. But I don't think that will be the case this year, given that the cost of the products are going to be higher as a result of increased trade and other costs," she concludes. "So, therefore, you're not going to see the significant margins to be expected with fewer markdowns. The current environment for fashion will remain challenged."

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Fashion Retailers Welcome The Rise In Clothing Prices But The Industry's Recovery Remains Tenuous

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Fashion retailers have enjoyed 7.4% growth this year compared to 2019. But despite strong demand, the industry faces another testing year as costs go up across the board and consumers may be wary of paying steeper prices, especially if what they really want isn't in stock.

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Covid-19 will hit wages more than jobs; retail, F&B, recreation sector workers most at risk of layoffs: MAS

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Some companies could ask employees to take pay cuts and bonuses could also be reduced in some sectors.
. Read more at straitstimes.com.

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As lofty inflation forces Canadians to pay more for groceries and used cars, one area of consumption is proving resistant to widespread price increases: clothing.

The price of clothing and footwear - as measured by the Consumer Price Index - rose just 0.7 per cent in November from a year earlier, lagging the overall inflation rate of 4.7 per cent, according to Statistics Canada. Compared with two years ago, clothing and footwear prices were down 1.6 per cent.

By contrast, the U.S. is seeing a pop. Apparel prices there have jumped 5 per cent over the last year. But that figure is exaggerated by comparisons to weak prices in 2020, when retailersdiscounted their merchandise as people hunkered down at home. U.S. apparel prices are still down from two years ago.

The stagnation fits within a decades-old trend. U.S. apparel prices are down 7.9 per cent from 30 years ago. In Canada, clothing (excluding footwear) has tumbled 11 per cent over the same span.There's no mathematical trickery here, no complex statistical adjustments. The items that make up our wardrobes - such as jeans and T-shirts - actually, on average, cost less money now than they did decades ago.

To some extent, this reflects a ruthlessly competitive industry that discounts heavily to move inventory. But what's good for family budgets is a clear negative in other respects.

The period of declining prices has coincided with an offshoring of production to the world'slowest-wage countries, along with the rise of fast-fashion brands that quickly churn out trendy items at meagre prices, making it easy for consumers to overhaul their wardrobes at minimal cost. Even with prices so low, millions of garments go unsold every year - a disastrous outcome for the environment.

"It's not normal that a shirt should cost $10 or a dress should cost $20 or a bikini should cost $1," said Dana Thomas, a Paris-based journalist and the author of Fashionopolis: The Price of Fast Fashion and the Future of Clothes, published in 2019. "Who is not getting paid in that equation?"
Bank of Canada's monetary policy direction in 2022 could depend on the public's inflation expectations Canadian retailers have 'turned over every stone' for talent to cope with seasonal rush amid labour shortage
In her book, Ms. Thomas notes that, as of the late 1970s, the U.S. produced at least 70 per cent of the clothing Americans bought. The ensuing years of globalization saw major brands chase labour where it was cheapest: first China, then Cambodia, Bangladesh and El Salvador. By 2012, only 2.5 per cent of clothes purchased in the U.S. were American-made.

Companies "were cutting costs so much that they didn't have to raise their prices, and these cheap clothes flooded the market," Ms. Thomas said.

The price level of U.S. apparel began a steady decline in the mid-1990s. In Canada, clothing and footwear started to slip in the early 2000s as fast-fashion retailers, such as Sweden's Hennes & Mauritz AB (more popularly known as H&M), entered the country and spread quickly.

The knock-on effects were plenty. Domestic manufacturing got trounced, eliminating solid middle-class jobs - a trend mirrored in other industries. Overseas garment workers - often young women - worked for relatively little money in squalid conditions. And the fashion industry became an even bigger polluter of air and waterways.

Helped by bargain prices, American shoppers are buying five times more clothing than they did in 1980, Ms. Thomas writes in Fashionopolis. And that means more is being thrown away.

The apparel industry's "whole profit machine - the whole business model - is based on moving volume," Ms. Thomas said. "And the more they sell, the more money they make."

The pandemic threw the industry into a tailspin. In 2020, sales at clothing retailers plummeted as people stayed home and events were cancelled, leading to price cuts. This year has been better for sellers. In Canada, clothing and accessories stores notched about $3-billion in sales in September, according to Statscan - roughly the same as in an average prepandemic month.

Like other industries, apparel is contending with various supply issues. Factory shutdowns in Vietnam because of COVID-19 outbreaks forced the likes of Nike Inc. and Lululemon Athletica Inc. to shift production elsewhere. Cotton prices have surged. And shipping goods by ocean is both costlier than it used to be and riddled with pandemic-related delays, forcing companies to use air freight, which is even more expensive.

Many apparel companies say they're raising prices to offset those costs, including Levi Strauss & Co. and Urban Outfitters Inc. But price hikes tend to run in the low single-digit percentages, hardly enough to reverse decades of deflation.

Montreal's Gildan Activewear Inc. is raising prices after cutting them last year to drive up market share. "Our current pricing levels remain only modestly above 2019 prepandemic levels," Rhodri Harries, Gildan's chief financial officer, told analysts in November.

For women's socks, the average selling price in Canada has jumped 27 per cent over the past two years, according to data from NPD Group. Although that seems like a substantial rise, socks were inexpensive enough to begin with that the effect on consumers has been minimal.

Canadian consumption has shifted in recent years, according to NPD. Starting in 2016, the volume of clothing sales drifted lower and the average selling price trended up - signs that fast fashion hit a peak.

"The consumer was saying, 'Okay, this is enough. ... I'm going to start buying fewer and better pieces,' " said Tamara Szames, industry adviser for Canadian retail at NPD.

But major clothing brands are breaking into new countries. A rapidly expanding middle class in emerging markets is discovering how cheap and disposable apparel can be, threatening to maintain the status quo.

We're "not thinking the long game in the way we shop," Ms. Thomas said. "We can afford to pay more for clothes than we do, but we've been conditioned to think we can't."
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Clothing has defied inflation for decades. The environment and workers are paying the price

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As lofty inflation forces Canadians to pay more for groceries and used cars, one area of consumption is proving resistant to widespread price increases: clothing. The price of clothing and footwear - as measured by the Consumer Price Index - rose just 0.7 per cent in November from a year earlier, lagging the overall inflation rate of 4.7 per cent, according to Statistics Canada.

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Macroeconomics Prelim Analysis [Based on key sources]

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Macroeconomics Prelim Analysis [Based on key sources]

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1. General price trends of fast fashion [Jie Ying]
-Compound annual growth rate (CAGR) of the market has decreased at a negative rate of -3% since 2015.
-The decrease in demand of fast fashion is due to the impact of Covid-19, local consumers have less disposable income hence the decline in consumer spending on clothing.
-More people are also raising awareness on the negative impact of fast fashion and shifting towards sustainability.
-However, revenue in the Fashion segment is projected to increase and reach $1,904m in 2022.
-Revenue is expected to show an annual growth rate (CAGR 2022-2025) of 17.53%, resulting in a projected market volume of $3,091m by 2025.

-New strategies or trends such as Artificial Intelligence (AI) In Clothing Design and Virtual Reality will play a part in the increase of the market value.
- Artificial Intelligence (AI) are gaining the ability of design and create more clothing designs that could cater to people of all ages or genders.
-Artificial intelligent digital assistants are also used to recommend clothes to customers based on their height, weight, shape, and current size or preferences.
-Many e-commerce apps such as Shopee or Lazada also incorporate such AI digital assistants to recommend new products or clothing items to consumers.
-Virtual Reality is an added function in many online stores where consumers can try on clothing virtually by uploading a photo of themselves.
-All these tools are credited to technological advancements and are being easily assessed by many consumers in Singapore, who are open to trying out these new functions.

2. Inflation of fast fashion [jiaxuan]

Support from key sources:
- There has been a rise of prices for apparel, including in-demand items. Since June of 2020, the consumer price index for apparel rose 4.9%. The cost of men’s apparel increased by 1.5%, while women’s apparel prices saw a 5.3% boost
- Most factors influencing the recent price inflation are by-products of the pandemic like restrained and decreased consumer demand since staying home due to the pandemic, government stimulus checks and increasing employment costs
- Price of supply increasing from tariffs increasing shipping costs and stressed supply chains due to lack of manpower of overseas factories and shortage of materials around the world
- Fast fashion may benefit as they are based on a lower-price point, even if consumers tighten their spending
- In Singapore, retail goods inflation declined at a slower pace of 0.4% in November of 2021 compared with the 1 per cent fall in September, due to a smaller decline in the prices of clothing, footwear and telecommunications equipment
- Singapore consumer price index of 2021 with 2019 as the base year, saw a decrease of 4.9% from Jan-May 2021/2020

3. Employment in the industry accounting for the recent Covid-19 Pandemic [Gerald]
- When the pandemic had initially come to Singapore and had started to spread more commonly through the masses, many had expected that Singapore would experience a large number of layoffs and retrenchment in the working population as the government enforced a nationwide lockdown.
- Although store jobs in the fashion/retail industries have been listed by the Monetary Authority of Singapore (MAS) as one of the more vulnerable jobs at risk of layoffs and retrenchment, the MAS have also said that what is more likely to happen to workers is a hit on their current wages
- As companies start to face the impact of the pandemic, they would start to have more pay cuts among employees, a halt of bonuses distributed as well as reducing employees' work hours
- In the fashion/retail industry this would mean that some full-time workers would be asked to be moved to be part-time workers so that the companies would pay them lesser as well as decreasing the number of hours the employees would work.
-Moreover, the Singapore government is also subsidising around 75 per cent of the first $4,600 of gross monthly wages for 1.9 million local workers to lessen the number of companies that are laying off or retrenching their workers
- The Ministry of Manpower has also offered 2,500 job opportunities and more than 1,000 training or attachment opportunities in the fashion/retail industry to help boost the employment rate and help struggling businesses find employees

4. The effects of Covid-19 on the Economic Situation of Singapore [Fariel]
- According to Singstat's performance of Singapore's GDP growth, as of 24th November 2021, The Ministry of Trade and Industry (MTI) announced that Singapore’s GDP growth is expected to come in at “around 7.0 per cent” in 2021  whereas the Singapore economy is expected to grow by “3.0 to 5.0 per cent” in 2022.
-  In the third quarter of 2021, the Singapore economy grew by 7.1 per cent on a year on-year basis, slower than the 15.2 per cent expansion recorded in the previous quarter 1. This brought GDP growth in the first three quarters of 2021 to 7.7 per cent.
- In the retail sector, which fast fashion is categorized into, it expanded by 0.7 per cent year-on-year, slower than the 51.1 per cent growth in the previous quarter.
- Travel and domestic restrictions have continued to weigh on the recovery of consumer-facing sectors such as retail trade. For instance, consumer-facing sectors such as the retail trade services are projected to return to prepandemic levels by end-2022, as domestic restrictions are progressively eased, and consumer sentiments improve.
- The COVID-19 pandemic had a significant impact on the retail and F&B services sectors in Singapore. Retail sales fell 15 per cent compared to the same period a year ago.

5. Expansionary Fiscal Policy [Huda]
-  Budget measures will be targeted at those who still lag in the recovery
-  The Jobs Support Scheme (JSS) was enhanced to provide further support to affected firms and help them retain workers
- Employers have the flexibility to allocate the subsidies for their businesses as necessary to keep the business running and to help them continue to retain their employees.
- JSS payout will likely be 30 per cent, for sectors like food services, retail and marine & offshore.

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MACROECONOMICS PRELIMINARY ANAYLSIS

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Place any local extra (relevant) articles here:

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| 1. To include news articles or local examples of fast fashion
| 2. Discuss price elasticity of DD using determinants (no need to discuss cross-price elasticity)

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| 1. Good use of DD and SS determinants (e.g. taste & preference, no. of sellers, technology)
| 2. Good analysis on market structure of fast fashion and its characteristics
| 3. Good discussion on product differentiation

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MICROECONOMICS PRELIMINARY ANALYSIS

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i think our team does well in terms of our camaraderie and overall teamwork :) our discussions are very healthy and everyone participates equally and substantially

in terms of improvement, we could sometimes be more confident with our opinions or more decisive

i think it’s interesting to learn about how in-depth the impact of something so normalised in our society has on the economy. to pick one for fashion, would be how the price elasticity defers for the branches of types of fashions such as luxury, fast fashion, slow fashion and even category types like woman’s and men’s and the reasons for such

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I'd like to thank my group for being really open minded and kind when everyone is discussing their ideas. It allows all of us to dish out all our ideas we have without being brushed off

I think we all could improve on all of us giving more opinions on whatever topic we're discussing about to improve on the project

An interesting fact when researching for the prelim analysis is the how much firms in monopolistic structure try to differentiate themselves from one another to try and gain a higher degree of product differentiation in the market.

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One compliment for my group is how well everyone communicates and conveys ideas to each other. We are able to discuss different ideas without feeling judged or having our ideas dismissed.

One area of improvement would be trying to arrange a timing to discuss our project. This was an issue as we had different schedules and might be busy/free at different times. Luckily, we managed to overcome this setback and work well as a group.

One thing that really interests me is that although fast fashion is unethical and not very sustainable for the environment. Some people do not have the privilege of being in the financial position to purchase from sustainable stores as it is not affordable. Hence they would have to turn to buying fast fashion clothing. Sustainable stores should focus on making their clothing more affordable for everyone of different financial status.

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I would like to thank my groupmates for contributing and attending meeting calls despite their busy schedules!! :)

I feel like we could improve on sharing opinions whether its good or bad. I feel like having healthy disagreements will  improve the quality of our work but other than that everything is fine! <3

One interesting fact is although the clothes are cheap, some companies are unethical. For example, workers are employed for long hours in unsafe conditions in order to produce more clothes for consumers.

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I want to thank the team for putting in the effort for stage 1 of our group project! I admire how well our team works together and contributes ideas during our meeting calls :)

It's a small matter but I think as a whole we could improve on voicing out more of what we really think during our discussion instead of agreeing with what has been said.

To me, the most interesting fact I discovered is that the fashion industry releases tonnes more carbon emissions (greenhouse gases) than the airline and shipping industries combined. It just shows how unsustainable and anti-environmental the fast fashion industry truly is.

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Number of sellers (Supply Determinants)

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It's a term we, as passionate believers in all things sustainable and ethical, love to hate - but what exactly is 'Fast Fashion' and why is it so bad for the environment and the fashion industry's reputation?

The apparel industry is booming. Every year, 62 million tonnes of clothing are consumed globally and this is only set to rise to over 100 tons by 2030. In the UK alone, 350,000 tonnes of clothing are being sent to landfill annually.

These towering figures summarise the vastly wasteful nature of today's fashion industry, fuelled by large, high-street retailers such as Primark and H&M, selling copycat designs of the latest runway looks at rock bottom prices. To add insult to injury, a new wave of online fashion retailers are swooping in to clean up the market, with Boohoo (who last year made headlines with £5 dresses), reporting profits that were up 53% on last year's.

Google 'Fast Fashion' and you won't receive a favourable impression: "Why I'm giving up fast fashion', or "How to break up with fast fashion" are a couple of recent headlines. Films like The True Cost (2015) or Stacey Dooley Investigates, Fashion's Dirty Secrets (BBC3), that expose the sinister reality of cheap clothing are widely available to watch. However, the statistics paint a different picture: the Fast Fashion market is booming, which begs the question - why is this kind of clothing still so popular among consumers despite high-profile negative press?

In the first of a three-part blog series, I'm going to explore what exactly is Fast Fashion, how it has developed since its 'birth' in the 1990s and what paradox makes it so popular among consumers despite the damaging truths that have been exposed about it.

Key facts about Fast Fashion:

62 million tonnes of clothing are consumed globally each year [Traid]

This figure is expected to rise by 63% by 2030 to 102 million tonnes [Traid]

In the UK alone, 350,000 tonnes of clothing was sent to landfill in 2018, 30% of all unwanted clothing [Clothes aid]

The term 'fast fashion' was coined by the New York Times when Zara first opened in New York in the early 1990s [The Well Essentials]

52% of UK and US shoppers want to see more sustainable practices in fashion, but only 29% want to pay more for it [Forbes]

What is 'Fast Fashion' and why is it so bad?

We hear this term a lot, but what does 'Fast Fashion' actually mean?

Let's start with a definition. The Cambridge Dictionary defines 'Fast Fashion' as:

"clothes that are made and sold cheaply, so that people can buy new clothes often".

This definition suggests Fast Fashion is an enabler, it's a system that allows people to achieve something. In this case, it's 'buy new clothes often', which is a claim that some may argue is a positive. Democratising fashion, making it more widely available to people who cannot afford to spend vast sums on clothing is probably the strongest (and perhaps only) argument on Fast Fashion's pro side. However, those who argue for this side are not likely to fully appreciate the extensive negative side effects of making clothing available on such an extensive scale, nor at such a low cost.

So how does it actually work?

Fast Fashion is a term specifically applied to the production model that allows retailers to manufacture and sell clothes at lightning speed, capitalising on humans' need to be fashionable and acquire stuff for social status reasons. The system takes advantage of the traditional fashion calendar, which drives forward new trends in clothing, and takes it to extremes, with more than 52 "seasons" now being turned over every year. The production model compresses every process involved in making clothes with the sole aim of getting products in front of customers as quickly as possible. At every stage of the supply chain, corners are cut, and although the system is now highly evolved, it remains fractured and is heavily reliant on low-tech human input to make it work.

What really is terrible about this model, which could arguably be said to have started as simple supply-and-demand, is that it produces excessive quantities of garments that no human could possibly consume sensibly. And in turn, the constant availability of fashion at prices as low as a cup of coffee in some cases is instilling a convenience mentality about how the fashion system should work for us - i.e. if it's not available immediately, then it's almost not worth the bother!

In addition to this, the high volume of clothes produced by the industry, paired with the poor quality manufacturing and cheap materials used to make them, lead to short lifespans and very little circularity in the system. People discard clothing almost as much as they consume it - and this is not the only source of fashion's big waste problem. Manufacturers are also guilty of dumping huge quantities of unsold stock or batches that have mistakes.

Where did Fast Fashion come from?

The growth in the ability to manufacture clothing on such vast scales has correlated with human's decline in understanding of how clothing is made, where clothing fabrics come from and how they are manufactured, and how to repair and maintain garments for longer lifetimes.

Cheap manufacturing

The abundance of cheap, mass-manufactured, ready-to-wear clothing in the 1960s democratised the previously stuffy and elitist fashion industry. No longer did one have their clothes tailored or made up by a seamstress or a home sewing machine, but instead younger consumers flooded into stores on the high street packed with cheap and cheerful dresses in every colour. The quality was notoriously abysmal. Clothing from the famed BIBA, for instance, today revered for its vintage glamour, was known for falling apart after just a couple of wears.

The 1960s was when shopping really took off as a hobby among young people too and the notion of buying new became associated with status, no matter the price tag of the garment.

Purchasing habits

Fast Fashion today plays on human weakness for new shiny objects in much the same way. The phenomenon can be traced back to Zara's first opening in New York in the early 1990s and was coined by the New York Times to describe the drastically sped-up production model that allows a look from Fashion Week to quickly be available in high street stores.

Over the years, we have seen companies push copycat fashion culture to the extremes. The trend today seems to be a constant release of new styles, intended to keep up with the influx of images offered up to the world by celebrities, influencers and everyday fashionistas on social media and blogs. It's now part and parcel for companies to track trends on a granular level. [See our Masterclass on Trend Forecasting for in-depth insight into how this system works.]

Fast Fashion retailers are using the immediacy of the online world in new and clever ways, often following up on ideas so quickly that they admit to throwing out strategy in their business decisions. Within 24 hours, some brands are copying styles seen on influencers' social media accounts and turning them into design samples, with marketable collections following within the next two weeks. Others are working with influencers in paid promotional gigs to launch collections that are available to purchase from the moment the look goes live on a blogger's Instagram feed.

>> Register, and upgrade as a Professional Member of The Sustainable Fashion Collection for full access to our archive of Masterclasses on ethical fabrics and sustainable fibres. <<

The popularity of Fast Fashion - despite the negative press

With environmental concerns increasingly making the headlines each year, it's not unreasonable to think that practising more eco-friendly lifestyles is going hand-in-hand with this heightened awareness. However, last year, a report into UK and US online shopping habits exposed the harsh reality of 52% of consumers wanting more sustainable practices in fashion, but with only 29% saying they would be willing to pay more for it.

That shortfall between the groups is the best explanation for why Fast Fashion is not losing its momentum just yet. Cost is a crucial factor for consumers, particularly those in the younger age brackets. The high cost of living today makes quick and small purchases more attractive to young consumers when the perception is generally that homeownership and even starting a family are off the cards for them. The likes of Boohoo and Misguided are succeeding in attracting young shoppers through influencer partnerships and heavily targeted social media advertising. Owning items from their latest collections also succeeds in creating a sense of community. People are able to share their own styles, tagging their favourite brands and celebrity idols - making them feel a part of something simply by purchasing a £5 dress.

Beyond cost reasons, accessibility is also a big influencer on Fast Fashion's popularity. With increasingly busier lifestyles, the ability to have a dress delivered at the drop of a hat after finding it a mere 15 minutes earlier is a very appealing prospect for most people. Fast Fashion retailers, with their vast array of products - and often their ability to pay for high search rankings - make them highly visible in the eCommerce space.

Psychology of "stuff"

Furthermore, people will always like the process of acquiring stuff. Possessions are how we distinguish ourselves from our neighbours; fashion is inherently a method of demonstrating to the world who we are through an accessory or colour choice. It will be a long time before anyone is able to stamp out this instinct in human nature.

I would go so far as to call Fast Fashion an addiction - it is an inherent problem in our society and shapes the way most people in the Western world shop. Despite people knowing the negative consequences of buying cheap garments, they will continue to do so as long as they are widely available. What we can do, is to continue to spread awareness of the issues the Fast Fashion industry cause.
Stay tuned for my next blog post, where I'll be addressing the negative impacts Fast Fashion has on the environment and the choices we can encourage consumers to make to reduce them. To join in the conversation about sustainable fashion with like-minded, creative entrepreneurs, follow us on Facebook and Instagram or sign up to become a Member of The Sustainable Fashion Collective.
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The Sustainable Fashion Collective brings you Masterclasses on specific fibre types. Each Masterclass contains lessons from guest experts, from brands to material innovators.
The Environmental Impacts Of Washing And Laundry Extending The Life Of Clothing And Textiles

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What is Fast Fashion and Why Is It Still So Popular?

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What does fast fashion mean, where did it come from and why is it still so popular despite its harmful impact on the environment?

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Technology and shifting consumer needs have made just-in-time or on-demand production a trend to watch.

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Differentiation Strategies in the Fashion Industry

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Microeconomics Prelim Analysis [Based on 5 key sources of information] 

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Microeconomics Prelim Analysis [Based on 5 key sources of information] 

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1.  Elasticity of fast fashion [jiaxuan]

Support from key sources:
- The price elasticity of fast fashion clothing is elastic as it is an industry that runs on trends and consumers are more willing to spend more on something in trend than on something which is not. As compared to slow fashion which is less elastic as their products are generally seen as more of a core product due to their nature of sustainability and their consumers’ buying preference are less likely to be changed due to pricing variations.
- the cross-price elasticity in the concept of demand is something to note for the increases of popularity of fast fashion clothing, as assuming consumers are indifferent to the brand’s, they would be more likely to choose the cheaper option for clothing which is fast fashion.
- Individual price elasticity of fast fashion clothing would be hard to calculate due to the fact they usually follow trends and when those trends die, the cycle of run for such pieces dies as well, creating lesser points of data. The quality of such mass produced products is generally less well made, creating a shorter life span of the product.

2. Change in taste and preference, increased the demand for clothes. [Huda]

Support from key sources:
- Fashion is a growing industry and fast fashion is the major contributor to its growth.
- Customers want affordable and new trendy clothing inspired by runway shows.
- Customers tend to purchase new cheaply-made and fashionable clothing in high-street stores.
- The excessive production of trendy and cheap garments at lightning speed is only the result of consumers' need for affordable and fashionable clothing.

3.  Market Structure of the Fast Fashion Industry [Gerald}

Market Structure: Monopolistic Competition
Support from key sources:
- There is some product differentiation in a majority of the industry such as price differences as well as product quality
- For Example: Zara aims to create higher quality products while trying for a lower price. However to maintain the image of a higher quality brand, they artificially make it seem as if the stocks for their product are low by showcasing a limited number of clothes in their stores
- Even though fast fashion companies are able to differentiate some aspects of the product, the product itself is not unique nor are they heavily differentiated as they are still clothes and all still serve the same function

4. Number of sellers in the fast fashion industry [Fariel]

Support from key resources:
- The high cost of living today makes quick and small purchases more attractive to youths.
- Fast fashion can be traced back to the 90's when Zara first opened stores in New York. Since then, companies have pushed copycat fashion to extremes.
- As soon as 24 hours, some brands are copying styles seen on influencers social media pages and turning them into design samples, with the collection coming out as soon as 2 weeks.
- Brands know that people will always like the process of acquiring stuff with the association of status as well as it being a method of expressing ourselves to the world through fashion.
- Despite the consequences of buying cheap garments, sellers profit from the buyers shopping addiction as long as it is widely available to them, thus the increase in the supply of fast fashion retailers in recent years.
- It was in the 1960's when shopping became a hobby for young people, no matter the price tag.
- With the rising increase of manufacturing cheap garments, it has blinded people's perspectives where the materials are sourced from, how they are manufactured and how to retain clothing for longer lifetimes.

5. Technology has increased the popularity of fast fashion [ Jei ying ]

Support from key sources:
- Clothing trends which usually last for a short period of time are easily created and circulated on social media which causes people to buy it when it is popular but discard it once it is no longer in trend
-It is very easy and convenient to purchase a lot of clothing all at once consumers are bored of what they have. This will lead to a cycle of buying and discarding clothing.
-More and more clothing stores can be set up online so that consumers can easily purchase items with a click of a button. This makes fast fashion more accessible.
- With technology, more clothing can be easily replicated and sold to consumers at a lower price. Higher-end clothing stores might design a new piece of clothing. Some consumers might not be willing to pay a high price hence causing lower-end stores to copy the design and produce them in bulk and sell the same design of clothing at a lower price.

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Top 10 Reasons Why Fast Fashion Is So Popular

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Do you still buy fast fashion currently? I know it’s difficult to resist. It’s fun, practical and convenient. Maybe learning about the reasons why it’s so popular will help you make better purchasing decisions. Fast fashion represents the culture of instant gratification is our modern societies.

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Elasticity of fast fashion

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credit to Artem Beliaikin in Unsplash

Pricing is one of the most challenging areas for fashion apparel retailers due to high SKU complexit, limited item comparability, and frequent flow of new collections. Price elasticity, by definition, requires two data metric, unit quantity sold in a product, and the price at which it is sold. But these two metric need to be available across multiple data points. In Figure 1 shown below, there is only one price (Rs.1000) at which the product is sold. The average sale units at that price happens to be 100. Since the price doesn't change, there is no way that we can attempt to find price elasticity for this product. In Figure 2, the price does change over time and we get a chance to plot multiple data points across price and sale units. If we join these data points, we will get a line that will give us some idea of the price elasticity of the product.

Few things that can help us get to a situation like in Figure 2 are changes in prices and periodic replenishment. If the product is sold off at a certain price and not replenished, that is the end of the matter with this product. If the product is replenished, it gets a longer cycle of run, where there are more chances of price changes to happen, leading us to more data points. However, a fashion product (a single SKU) may not be replenished once all the stock is sold out. This is the reason, we often have very few data points in individual fashion products to calculate price elasticity. Sale units at SKU level will not follow any significant pattern. The most prevalent reason for this is that data points are very low as product life span is very less. There are two different types of products in fashion business. They are, seasonal products and year over products (also known as 'core' products). Seasonal products will have sale units in their respective seasons only. And year over products also will not have same sales pattern across the year. Due to these reasons, there will not be consistent pattern in the data. If one consider data from store and SKU level, then there won't be any specific pattern in the data and it won't have significant sale units. So, data at lower level is insufficient, inconsistent and not reliable to build a price elasticity model. Even advanced statistical models are also not able to provide better elasticity estimates on this type of data.

Typical sale trend of a single SKU in a store (trend may be insufficient and not follow a pattern)

Products grouped together, form a category. For example, a hundred different designs of men's formal shirts can be grouped together to form a category of men's formal shirt. This higher level category will have more data points of price and sale units, for a longer time period. We can definitely find the price elasticity for this category. However, at a higher category level the impact of individual SKUs will be missed.

For these reasons, pricing has been more art than science in case of fashion retailers. However, the ability to apply statistical approaches to even highly seasonal products such as fashion shorts, or high-priced goods such as luxury handbags, can drive substantial improvement in sales and margins. Although technical pricing solutions have existed for more than a decade, most retailers are skeptical of their effectiveness. Instead, retailers prefer to rely on an intuitive sense of what the consumer would be willing to pay, competitive bench marking, and margin contribution. Fashion retailers tend to follow the cost plus model, targeting a certain gross margin, allowing a leeway for competitive pressures and need for life cycle management. This reliance on subjective pricing prevails in the marketplace, even in the era of big data and online price transparency.

New products in Fashion contribute to significantly higher part of sale. How do you price a new product? The perceived value of individual product attributes, such as color, wash, or embellishment is one factor for pricing. Most retailers price items with embellishments higher than ones without these extra features, although it is very difficult to know how much of a premium the embellishments should command. Only by breaking down all possible attributes and understanding their perceived value, the pricing can be tailored in a better manner.

Retailers also find similar challenges in deciding the pricing of a new product in other than fashion categories. However, once it starts selling, pricing could be modified as more data points emerge on the product and elasticity can be determined. But this too is difficult in fashion products, given the nature of the business.

Retailers will need stronger analytics capabilities for fashion pricing and might need to rethink how they collect and structure the relevant data for each indicator. Determining how much weight to give each indicator is an iterative process to which retailers must bring a strong understanding of their business and their strategic objectives in pricing. In basic apparel categories, for example, some merchants will choose to prioritize certain indicators related to competitive positioning. In more trend-driven styles, they may opt to give more weight to indicators that reflect consumer demand. By tailoring their approach in this way, it is possible to achieve greater influence in optimizing prices. Studying sale for various retailers across the fashion industry, we do have few insights on price elasticity in fashion. It depends on the below mentioned factors.

Customer Segment

The most important factor for elasticity has to be the customer segment that a particular fashion retailer is catering to. Unlike in food business, we see different fashion retailers catering to different clientele. The figure below gives a summarized pyramid structure of the six segments and the Indian fashion retailers targeting each of the segments. Starting from an unorganized sector that cater to the mass segment, there are actually six different customer segments that a retailer can choose to cater to. It is extremely rare for any fashion retailer across the world to cater to more than two segments at most. Different retailers have built their brands keeping any one of these segments in mind. Just like the pyramid structure shown below, as one goes higher up the pyramid the quantum of customers reduce, but the average price for a product category increase. For example, a shirt can be sold at less than Rs.300 in the unorganized sector catering to mass clientele, and it can also command a price of Rs.5000+ in a high-end retail store catering to a super-premium clientele.

Six different customer segments and their relevant retail brands in India

Price elasticity is lower in the two ends of the pyramid. The highest elasticity is usually seen in the mid-market and premium segments. That is why 'end of season sale' for the retailers catering to these segments is a popular event. Elasticity is significantly lesser in mass and economy segments.

Fashion trends

The apparel industry is one that runs on trends. Apparel items that are in trend are likely to have a more elastic demand because consumers would be willing to spend more on them rather than spending more on something which is out of trend in case of price fluctuations. A core product, like a starting price point polo t-shirt is less elastic and it doesn't make sense for the retailer to reduce it's price.

Brands

With Indian society leaning more towards westernization, there are cases when the consumer trusts a brand to an extent that their willingness to spend is driven more by the brand of the apparel item, rather than their preference for it. So, in this case, the consumers' demand will be elastic for specific brands but not for apparel in general. A popular brand, like Zara, offering price discounts in a product category would get more customers interested than some less popular brand offering similar discounts. In this case, Zara, the brand has become more elastic.

plethora of fashion brands, targeting different clientele

Competition

There exists a phenomenon called cross-price elasticity in the concept of demand where the price of the competitors' product which is a substitute, affects the demand for the product in question. In such a case if a consumer wants to buy a particular item of clothing that is available in two different retail stores and assuming the consumer is indifferent to the brands, then she is likely to prefer the cheaper one. So, in this, the demand will be elastic if the substitutes to the product are competitively priced.

Price Ladder

Higher priced products have more elasticity. A drop in price of a pair of more expensive denims will lead to higher elasticity. As in case of the above pyramid example, a shirt worth Rs.2000 is more elastic than a Rs.500 shirt. Let us say a shirt worth Rs.2000 is being offered at Rs.1000 after discount. Another shirt worth Rs.500 is also being offered at similar discount percentage. In such cases, very often the first shirt will sell more at the discounted rate because of it's higher elasticity.

Necessity vs. Luxury

If the product is a necessity for consumers, like in case of an under wear or a sports t-shirt it will be less elastic. The relevant consumer will not alter her buying based on price variations. This is assuming all other factors are constant. If however, the sports t-shirt of similar quality is available at a lesser price in a competitor's store, the consumer might switch to that store for good. Similarly, a sweater during peak winter will become a necessity product and inelastic.

Season

Seasons like winter and summer play their part in determining price elasticity. Seasonal products, in general, become less elastic during their relevant season. A wedding suit will be less elastic during the wedding season, as against off-season.

Elasticity trends in fashion

Ladies wear is less elastic. Women wear is seeing lower elasticity and represents opportunities for retailers to maintain or increase prices, particularly in sportswear where shoppers are becoming less concerned with price. The millennial shoppers are contributing more towards this factor as they become part of the work force. Western clothes are seeing more of the effect.

Men's wear is more elastic. Significant shifts in sub categories are happening, as elasticity in underwear is falling, creating an opportunity for retailers to increase price. Bottom wear, in contrast, continue to become more elastic as pricing increases and retailers need to take note to avoid overstocks due to decrease in sales. Outer wear is comparatively less elastic, compared to comfort clothing worn at home.

Kids' wear is also more price elastic. Children footwear is a price elastic category. But kids' outer wear clothing, particularly top wear is becoming less elastic now. Sleep/lounge wear in particular has shown declining elasticity as well as falling prices, which makes it primed for price increases. However, not every subcategory represents opportunity. In the bottoms category, for example, where elasticity and pricing are both increasing, retailers need to be wary of buyers' diminishing appetite for higher prices.

The below matrix points out the current trends in elasticity and pricing.

source: Richard Carufel in Agility

The above matrix points out that ladies wear with decreasing elasticity accompanied by price increases by various retailers will lead to higher growth opportunity. Value per piece can increase without a significant impact on quantity sold, because of the lower elasticity.

Kids wear is showing trends of reduction in elasticity. At this point, if retailers reduce prices (happening across many retail stores), they would be letting go of growth opportunities.

Men's wear is seeing higher elasticity in recent times and retailers have also responded with price drops. This is in the right path to maintain price competitiveness and hold on to customers.

Conclusion

Fashion remains a more complex category when it comes to the science of price elasticity. However, analytics is evolving in this space and various pricing models are being developed to add more relevance to this category. It is important for fashion experts to contribute towards making this field of analytics more robust. When price elasticity data is available in short supply, experts' opinions on which factor plays a greater role in determining pricing holds significant importance. More insights will keep emerging, giving retailers more confidence on their pricing decisions. Yes, fashion is a high margin category. That is one of the reasons that retailers have been satisfied with a lesser than optimum pricing strategy. But with increase in competition, it is time to push the envelope further and get more profit out of this business through better pricing strategies.

PS: In case you would want to know about the elasticity in another category, like in FMCG business, you can refer my other blog in the below mentioned link.
https://subrata-mukherjee.medium.com/how-price-elastic-is-your-brand-376919a30842?source=your_stories_page-------------------------------------

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Pricing is one of the most challenging areas for fashion apparel retailers due to high SKU complexit, limited item comparability, and frequent flow of new collections. Price elasticity, by definition, requires two data metric, unit quantity sold in a product, and the price at which it is sold.