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Can Shein and Zara’s Fast-Fashion Engine Work for Regular Retailers?

It’s hard to ignore how fast fashion brands have changed the way many consumers shop for clothing over the past two decades. Delivering trends at lightening-fast speed at a fraction of the cost of designer goods, companies like H&M, Zara, and more recently Shein, have captured significant apparel marketshare, particularly with younger customers.

And the growth of these brands has amplified with the advent of social media, as digital channels deliver instant access to the latest trends and accelerate the demand for fresh product from consumers. That’s the finding of global professional services firm Alvarez & Marsal Consumer Retail Group’s “The New Evolution of Fast Fashion” report.

“With the impact of social media and the fragmentation that we’ve seen out there, we see trends being set every single day, whether it’s through brands, influencers, or just individuals,” said Michael Prendergast, managing director, Alvarez & Marsal. “There’s this broad spectrum of trend procurement or trend push that’s happening. And that’s a big change that we have seen.”

The report, which includes data from a survey of approximately 500 U.S. consumers conducted in June 2022, found that 50 percent of respondents want to buy fashion trends within the same week they discover them. And 40 percent of respondents aged 18-44 said they were willing to compromise brand loyalty to get immediate gratification when shopping for trend items.

Additionally, nearly half of respondents said they will go to another retailer if the trend they seek isn’t available. And only 30 percent said they would check back with the first retailer for the trend when shopping in the future.

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So what does that mean for traditional apparel retailers? According to Pendergast, shifting the business model to a more fast fashion-like approach can help them tap into that trend-focused marketshare.

One of the first steps in doing that is shrinking the calendar to compete with fast fashion brands’ accelerated production schedule. Streamlining the production process, reducing redundancies and nimble decision-making can help shorten the timeline.

“The calendar is really broken up into two major parts—you’ve got what I’ll call pre-tech, pack-handoff, design-development stage, and then you’ve got the post-tech, pack-handoff manufacturing stage,” Prendergast said. “And there are many operational enhancements that should be taking place on either side of that development process.”

Some of those operational enhancements must happen on the technology front, incorporating digital tools such as 3D renderings to reduce or replace time-consuming physical versions and fit software to provide accurate and repeatable standards. But while higher-tech tools are important, Prendergast said optimizing simpler technology can streamline processes, as well.

Can Shein and Zara's Fast-Fashion Engine
The opening of New Zealand’s first Zara store at Sylvia Park on October 6, 2016 in Auckland, New Zealand. Phil Walter/Getty

“We challenge companies to do this all the time, making things like Excel smarter,” he said. “So instead of having eight to 10 people enter information into spreadsheets that took weeks of time out of the calendar from an informational standpoint, they build a model where you can have a data download and then the model basically puts all the information out into Excel.”

Another key strategy for competing with fast fashion brands is ensuring retailers don’t miss those trend-focused shoppers by having the product they want, when they want it. That means closely following trends as they emerge on platforms like TikTok and Instagram—nearly a third of respondents to Alvarez & Marsal’s survey said they get their trend inspiration from social media. And managing inventory and assortment to meet the evolving demands of the customer is critical, as well.

“The answer is really right in front of them—they have to be exceptionally diligent in reading and reacting to the business,” Prendergast said. “So it’s truly an old-school approach of on a Monday morning looking at the product that’s sold and the product that didn’t, and then making reactive and proactive decisions off of that data.”

Prendergast said that while most retailers monitor sales numbers, they don’t act aggressively enough on that data to truly make a difference in their business. For instance, Shein adds 6,000 styles on its site every day, updating what sells well and quickly abandoning what doesn’t.

“If a style is not hitting the sell-through expectation that’s been delivered after two weeks, mark it down—don’t wait 13 weeks,” he said. “Or if a style is selling aggressively after a two-to-three-week period, immediately reorder it and have the pipeline filled with your faster providers to get more of that product in.”

Prendergast said that to make all of these strategies work to compete in a fast fashion-driven marketplace, retailers must align all internal and external stakeholders to support a nimble, shortened production timeline. Internally, all departments—including design, merchandising, marketing and even senior management—must collaborate to streamline production from concept design to launch. And forging strong external partnerships within the supply chain that offer the transparency to identify and quickly remedy disruptions while increasing the speed of delivery can mean the difference between delivering an on-trend item to consumers and missing their business because you don’t have the latest style in stock.

“One of the biggest pieces is this operational commitment across supply chain to be quicker,” he said. “You need to convert your entire supply chain into a speed model. Does that mean you need to be as fast as Zara? No, but does it mean you can’t be 62 weeks from design to delivery. And I think that’s a really important piece that brands and retailers need to challenge themselves on.”