Profit

Whilst satisfying the needs of customers is important, the underlying goal for brands is profit and success. Profit enables a brand to move forward and is often a motivation for many however, with the cost-of-living crisis and inflation increasing, profit is declining, and brands are struggling to stay afloat.

Although the fashion industry is massive and could be seen as the most lucrative industry in the world, there is generally a lack of growth compared to previous years. The four sectors are performing negatively, and one could argue that this is due to several factors including the war in Ukraine, Brexit, and lockdown. According to a report by McKinsey (2023), high street brands will struggle more so than before, and brands are anticipating that inflation will spike their costs. For instance, cotton and cashmere prices have increased 45 percent and 30 percent year on year (Guyot, 2022). Consequently, the fashion industry is suffering, and many brands have been forced to reduce employee sizes or even close altogether.

During times of economic uncertainty, many brands are increasing their online presence and taking advantage of technology. Younger generations can relate to brands through social media marketing and draw in new customers through their clever, innovative approaches. Brands also target mass audiences due to the international reach, thus further allowing brands to gain more loyal customers. Moreover, a brand can remain competitive by being adaptable and open to change. For example, some brands thrived during lockdown due to their approach online however, failed to survive and maintain this success once normality returned. Adaptability is key in an industry that is constantly evolving and brands remain competitive in doing so.

References:

The State of Fashion 2023: Holding onto growth as global clouds gather (2023) McKinsey & Company. Available at: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion (Accessed 21/10/2023)